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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES

Investment Company Act file number 811-07452

AIM Variable Insurance Funds

(Exact name of registrant as specified in charter)

11 Greenway Plaza, Suite 100 Houston, Texas 77046

(Address of principal executive offices) (Zip code)

Philip A. Taylor 11 Greenway Plaza, Suite 100 Houston, Texas 77046

(Name and address of agent for service)

Registrant’s telephone number, including area code: (713) 626-1919

Date of fiscal year end: 12/31

Date of reporting period: 12/31/09

Item 1. Reports to Stockholders.

AIM V.I. Basic Balanced Fund

Annual Report to Shareholders § December 31, 2009

The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter-ends. For the second and fourth quarters, the lists appear in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The Fund’s Form N-Q filings are available on the SEC website, sec.gov. Copies of the Fund’s Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers for the Fund are 811-07452 and 033-57340. The Fund’s most recent portfolio holdings, as filed on Form N-Q, have also been made available to insurance companies issuing variable annuity contracts and variable life insurance policies (“variable products”) that invest in the Fund.

A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, from our Client Services department at 800 410 4246 or on the Invesco Aim website, invescoaim.com. On the home page, scroll down and click on Proxy Policy. The information is also available on the SEC website, sec.gov.

Information regarding how the Fund voted proxies related to its portfolio securities during the 12 months ended June 30, 2009, is available at our website, invescoaim.com. Click the About Us tab at the top of the home page; click Legal Information; and then click Proxy Voting Search. The information is also available on the SEC website, sec.gov.

Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Aim Distributors, Inc. is the U.S. distributor for Invesco Ltd.’s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd.

This report must be accompanied or preceded by a currently effective Fund prospectus and variable product prospectus, which contain more complete information, including sales charges and expenses. Investors should read each carefully before investing.

Invesco Aim Distributors, Inc.

NOT FDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEE

Management’s Discussion of Fund Performance

Performance summary

For the year ended December 31, 2009, AIM V.I. Basic Balanced Fund, excluding variable product issuer charges, outperformed its broad market, style-specific and peer group indexes.

     Drivers of equity performance were largely stock specific. We attribute the Fund’s outperformance versus its indexes mainly to above-market returns from several of our investments in the financials and information technology (IT) sectors. Select investments in financials were also among the largest detractors from Fund performance. The Fund’s fixed income holdings also posted gains and outperformed the Barclays Capital U.S. Aggregate Index during the year.⁶

     Your Fund’s long-term performance appears later in this report.

Fund vs. Indexes

Total returns, 12/31/08 to 12/31/09, excluding variable product issuer charges.

If variable product issuer charges were included, returns would be lower.

Series I Shares	33.84	%
Series II Shares	33.54
S&P 500 Index6 (Broad Market Index)	26.47
Custom Basic Balanced Indexn (Style-Specific Index)	14.81
Lipper VUF Mixed-Asset Target Allocation Moderate Funds Index6 (Peer Group Index)	23.13

⁶ Lipper Inc.; § Invesco, Lipper Inc.

How we invest

We seek to create wealth by maintaining a long-term investment horizon and investing in companies that are selling at a significant discount to their estimated intrinsic value. We believe intrinsic value represents the inherent business value of portfolio holdings based on our estimates of future company cash flow. Intrinsic value calculations are estimates and, as a result, market price may never reflect intrinsic value estimates, especially for an entire portfolio. Conversely, we consider selling a stock for any of the following reasons — a stock is trading significantly above our estimate of intrinsic value; a permanent, fundamental deterioration results in a reduction in estimated intrinsic value with inadequate upside potential or unexpected deterioration in financial strength; or to capitalize on a more attractive investment opportunity. The Fund’s philosophy is based on key elements that we believe have extensive empirical evidence:

§	Company intrinsic values can be reasonably estimated. Importantly, this estimated fair business value is independent of the company’s stock price.
§	Market prices are more volatile than business values, partly because investors regularly overreact to negative news.
§	Long-term investment results are a function of the level and growth of business value in the portfolio.

     Since our application of this strategy is highly disciplined and relatively unique, it is important to understand the benefits and limitations of our process. First, the investment strategy is intended to preserve your capital while growing it at above-market rates over the long term. Second, our investments have little in common with popular stock market indexes and most of our peers. And third, the Fund’s short-term relative performance will naturally be different than the stock market and peers and have little information value since we simply don’t own the same stocks.

     Our fixed income portfolio investment process is accomplished through the use of top-down strategies involving duration management, yield-curve positioning and sector allocation.

Market conditions and your Fund

The year 2009 was truly a tale of two markets. During the first few months of the year, equity markets declined steeply as severe problems in credit markets and a deteriorating outlook for corporate earnings led to a global recession. However, the U.S. economy began to show signs that the contraction was subsiding, and equity markets rapidly reversed direction beginning in March 2009 and rallied strongly for the rest of the year. Bond yields also moved higher as economic uncertainties appeared to be stabilizing. The expanded risk appetites shifted demand from Treasuries to non-government securities during the year.

     In this environment, sectors with the highest returns in the broad market as represented by the S&P 500 Index included more economically sensitive sectors such as information technology and consumer discretionary.¹ Conversely, sectors with the lowest returns included less economically sensitive sectors such as consumer staples and health care.¹

     While financial-market stress has eased significantly, we believe overall equity market valuations remain attractive. Our investment results can be lumpy during periods like this, but historically these types of markets have yielded attractive opportunities for future capital growth.

     ASML, the world’s leading provider of lithography systems for the semiconductor industry, was among the Fund’s top contributors during the year. Despite a difficult business environment, a recent sales rebound and improved cost trends returned the company to profitability and improved its outlook for 2010.

     The financials sector outperformed during much of 2009 as investors contemplated an eventual end, or at least an abatement, to the global credit crisis. Our investments in Morgan Stanley and XL Capital posted double-and triple-digit gains, respectively, and made significant contributions to Fund performance. Morgan Stanley’s stock rose by over 90% during the year. Investors reacted favorably to the announcement of a joint venture between the company and Citigroup in which Morgan Stanley bought Citi’s Smith Barney unit and combined it with its own global wealth management group. The new joint venture, called Morgan Stanley Smith Barney, is the industry’s leading wealth management business.

Portfolio Composition

By security type, based on total investments

Common Stocks & Other Equity Interests		72.8	%
Bonds & Notes		10.2
U.S. Government Sponsored
Mortgage-Backed Securities		8.1
Asset-Backed Securities		4.7
U.S. Treasury Securities		2.1
U.S. Government Sponsored
Agency Securities		0.4
Money Market Funds		1.7
Total Net Assets	$	34.4million
Total Number of Holdings*		196
Top 10 Equity Holdings*
1. ASML Holding N.V.		3.9	%
2. UnitedHealth Group Inc.		3.1
3. Moody’s Corp.		2.7
4. XL Capital Ltd.-Class A		2.5
5. Robert Half International, Inc.		2.5
6. Bank of America Corp.		2.4
7. American Express Co.		2.4
8. Omnicom Group Inc.		2.3
9. Dell Inc.		2.2
10 Illinois Tool Works Inc.		2.1

The Fund’s holdings are subject to change, and there is no assurance that the Fund will continue to hold any particular security.

* Excluding money market fund holdings.

AIM V.I. Basic Balanced Fund

     After declining significantly in 2008 due to credit-related issues, specialty insurance provider XL Capital’s stock rebounded from its early-2009 lows, gaining over 400% during the year as investor concerns abated. We continue to believe the company is undervalued despite its significant rebound.

     In addition to these investments, a legal settlement the Fund received from the Tyco International class action lawsuit was a meaningful contributor to 2009 results. The legal settlement was in addition to the stock’s 65% gain during 2009.

     While many financial stocks performed well, Citigroup’s stock fell by more than 45% during the year. In February, Citigroup took the dramatic step of recapitalizing the company via a preferred-for-common exchange. The result bolstered Citigroup’s capital position to among the strongest in the world, but diluted our estimate of per-share intrinsic value severely.

     The Fund’s fixed income holdings also posted gains during the year and outperformed the Barclays Capital U.S. Aggregate Index.¹ The outperformance was mainly due to our overweight positions in investment grade corporate bonds and structured securities. An underweight position in U.S. government securities also aided relative performance as investor preference for credit risk dampened demand for U.S. government bonds.

     Our valuation analysis suggested the recent market stress produced some of the most compelling valuation opportunities in recent history. As a consequence, our turnover was higher than normal during the year as we tried to exploit those opportunities.

Context for results

The crisis environment that characterized 2008 and part of 2009 has abated since the market’s March low. This process was favorable to the Fund and shifted investor attention to the valuation opportunities created by the crisis and exploited by our investment process. We continue to believe the valuation opportunity captured by the Fund remains very attractive despite record appreciation since March 2009. But a self-sustaining economic recovery is a necessary precondition to further normalization of equity values.

     Since the market low in March, valuation spreads have tightened from record-wide levels and, consequently, the difference between price and our estimate of portfolio value also has declined. However, despite the sharp market increase, the Fund’s price-to-value ratio remains very attractive versus history, but substantially less than at the recent market low. Shareholders should not expect the magnitude of recent outperformance to be repeated in the next 12 months. While we think portfolio values remain compelling, the next phase of any market recovery could prove more muted.

Portfolio assessment

We believe the single most important indicator of the way the Fund is positioned for potential future success is not our historical investment results or popular statistical measures, but rather the difference between current market prices and the Fund’s estimated intrinsic value — the aggregate business value of the portfolio based on our estimate of intrinsic value for each individual holding.

     At the close of the quarter, the difference between the market price and the estimated intrinsic value of the Fund remained high versus history, according to our estimation. While there is no assurance that market value will ever reflect our estimate of the Fund’s intrinsic value, we believe the large gap between price and estimated intrinsic value may cause above-average capital appreciation as capital markets normalize.

In closing

Markets experienced a strong recovery during 2009, and the Fund significantly outperformed its indexes. While we do not expect a repeat of 2009’s results in 2010, we do believe the Fund’s price-to-value ratio remains very attractive versus history.

     We continue to work hard to protect and grow the Fund’s estimated intrinsic value. We thank you for your investment and for sharing our long-term investment perspective.

1 Lipper Inc.

The views and opinions expressed in management’s discussion of Fund performance are those of Invesco Advisers, Inc. These views and opinions are subject to change at any time based on factors such as market and economic conditions. These views and opinions may not be relied upon as investment advice or recommendations, or as 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 Invesco Advisers, Inc. 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.

See important Fund and index disclosures later in this report.

Bret Stanley

Chartered Financial Analyst, senior portfolio manager, is lead manager of AIM V.I. Basic Balanced Fund. He began his investment career in 1988. Mr. Stanley earned a B.B.A. in finance from The University of Texas at Austin and an M.S. in finance from the University of Houston.

Cynthia Brien

Chartered Financial Analyst, portfolio manager, is manager of AIM V.I. Basic Balanced Fund. She joined Invesco Aim in 1996. Ms. Brien earned a B.B.A. from The University of Texas at Austin.

Chuck Burge

Senior portfolio manager, is manager of AIM V.I. Basic Balanced Fund. He joined Invesco in 2002. Mr. Burge earned a B.S. in economics from Texas A&M University and an M.B.A. in finance and accounting from Rice University.

R. Canon Coleman II

Chartered Financial Analyst, portfolio manager, is manager of AIM V.I. Basic Balanced Fund. He began his investment career in 1996 and joined Invesco Aim in 2000. Mr. Coleman earned a B.S. and an M.S. in accounting from the University of Florida. He also earned an M.B.A. from the Wharton School at the University of Pennsylvania.

Matthew Seinsheimer

Chartered Financial Analyst, senior portfolio manager, is manager of AIM V.I. Basic Balanced Fund. He began his investment career in 1992 and joined Invesco Aim in 1998. He earned a B.B.A. in finance from Southern Methodist University and an M.B.A. from The University of Texas at Austin.

Michael Simon

Chartered Financial Analyst, senior portfolio manager, is manager of AIM V.I. Basic Balanced Fund. He began his investment career in 1989 and joined Invesco Aim in 2001. Mr. Simon earned a B.B.A. in finance from Texas Christian University and an M.B.A. from the University of Chicago.

Assisted by the Basic Value Team

AIM V.I. Basic Balanced Fund

Your Fund’s Long-Term Performance

Results of a $10,000 Investment — Oldest Share Class since Inception

Index data from 4/30/98, Fund data from 5/1/98

1. Lipper Inc.

2. Invesco, Lipper Inc.

Past performance cannot guarantee comparable future results.

     This chart, which is a logarithmic chart, presents the fluctuations in the value of the Fund and its indexes. We believe that a logarithmic chart is more effective than other types of charts in illustrating changes in value during the early years shown in the chart. The vertical axis, the one that indicates the dollar value of an investment, is constructed with each segment representing a percent change in the value of the investment. In this chart, each segment represents a doubling, or 100% change, in the value of the investment. In other words, the space between $5,000 and $10,000 is the same size as the space between $10,000 and $20,000.

Average Annual Total Returns
As of 12/31/09

Series I Shares
Inception (5/1/98)	1.32	%
10 Years	–1.45
5 Years	-0.36
1 Year	33.84
Series II Shares
10 Years	-1.68	%
5 Years	-0.61
1 Year	33.54

Series II shares’ inception date is January 24, 2002. Returns since that date are historical. All other returns are the blended returns of the historical performance of Series II shares since their inception and the restated historical performance of Series I shares (for periods prior to inception of Series II shares) adjusted to reflect the Rule 12b-1 fees applicable to Series II shares. The inception date of Series I shares is May 1, 1998. The performance of the Fund’s Series I and Series II share classes will differ primarily due to different class expenses.

     The performance data quoted represent past performance and cannot guarantee comparable future results; current performance may be lower or higher. Please contact your variable product issuer or financial adviser for the most recent month-end variable product performance. Performance figures reflect Fund expenses, reinvested distributions and changes in net asset value. Investment return and principal value will fluctuate so that you may have a gain or loss when you sell shares.

     The net annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 0.91% and 1.16%, respectively.¹ The total annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 1.35% and 1.60%, respectively. The expense ratios presented above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

     AIM V.I. Basic Balanced Fund, a series portfolio of AIM Variable Insurance Funds, is currently offered through insurance companies issuing variable products. You cannot purchase shares of the Fund directly. Performance figures given represent the Fund and are not intended to reflect actual variable product values. They do not reflect sales charges, expenses and fees assessed in connection with a variable product. Sales charges, expenses and fees, which are determined by the variable product issuers, will vary and will lower the total return.

     The most recent month-end performance data at the Fund level, excluding variable product charges, is available on the Invesco Aim automated information line, 866 702 4402. As mentioned above, for the most recent month-end performance including variable product charges, please contact your variable product issuer or financial adviser.

     Had the adviser not waived fees and/or reimbursed expenses, performance would have been lower.

1 Total annual operating expenses less any contractual fee waivers and/or expense reimbursements by the adviser in effect through at least April 30, 2011. See current prospectus for more information.

AIM V.I. Basic Balanced Fund

AIM V.I. Basic Balanced Fund’s investment objective is long-term growth of capital and current income.

§	Unless otherwise stated, information presented in this report is as of December 31, 2009, and is based on total net assets.
§	Unless otherwise noted, all data provided by Invesco.

Principal risks of investing in the Fund

The values of convertible securities in which the Fund invests may be affected by market interest rates, the risk that the issuer may default on interest or principal payments, and the value of the underlying common stock into which these securities may be converted.

     Prices of equity securities change in response to many factors, including the historical and prospective earnings of the issuer, the value of its assets, general economic conditions, interest rates, investor perceptions and market liquidity.

     Foreign securities have additional risks, including exchange rate changes, political and economic upheaval, relative lack of information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.

     Interest rate risk refers to the risk that bond prices generally fall as interest rates rise and vice versa.

     There is no guarantee that the investment techniques and risk analysis used by the Fund’s portfolio managers will produce the desired results.

     The prices of securities held by the Fund may decline in response to market risks.

About indexes used in this report

The S&P 500^® Index is an unmanaged index considered representative of the U.S. stock market.

     The Custom Basic Balanced Index, created by Invesco Aim to serve as a benchmark for AIM Basic Balanced Fund, is composed of the following indexes: Russell 1000^® Value (60%) and Barclays Capital U.S. Aggregate (40%). The Russell 1000 Value Index is a trademark/service mark of the Frank Russell Co. Russell^® is a trademark of the Frank Russell Co. An investment cannot be made directly in an index.

     The Lipper VUF Mixed-Asset Target Allocation Moderate Funds Index is an unmanaged index considered representative of mixed-asset target allocation moderate variable insurance underlying funds tracked by Lipper.

     The Barclays Capital U.S. Aggregate Index is an unmanaged index considered representative of the U.S. investment-grade, fixed-rate bond market.

     The Fund is not managed to track the performance of any particular index, including the indexes defined here, and consequently, the performance of the Fund may deviate significantly from the performance of the indexes.

     A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group reflects fund expenses; performance of a market index does not.

Other information

The Chartered Financial Analyst^® (CFA^®) designation is globally recognized and attests to a charterholder’s success in a rigorous and comprehensive study program in the field of investment management and research analysis.

     The returns shown in management’s discussion of Fund performance are based on net asset values calculated for shareholder transactions. Generally accepted accounting principles require adjustments to be made to the net assets of the Fund at period end for financial reporting purposes, and as such, the net asset values for shareholder transactions and the returns based on those net asset values may differ from the net asset values and returns reported in the Financial Highlights. Additionally, the returns and net asset values shown throughout this report are at the Fund level only and do not include variable product issuer charges. If such charges were included, the total returns would be lower.

     Industry classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s.

AIM V.I. Basic Balanced Fund

Schedule of Investments^(a)

December 31, 2009

	Shares		Value
Common Stocks & Other Equity Interests–72.77%
Advertising–4.06%
Interpublic Group of Cos., Inc. (The)(b)		82,907	$	611,854
Omnicom Group Inc.		20,117		787,580
				1,399,434
Asset Management & Custody Banks–1.38%
State Street Corp.		10,887		474,020
Brewers–1.13%
Molson Coors Brewing Co.–Class B		8,631		389,776
Casinos & Gaming–1.50%
International Game Technology		27,607		518,183
Communications Equipment–1.83%
Nokia Corp.–ADR (Finland)		49,054		630,344
Computer Hardware–2.15%
Dell Inc.(b)		51,596		740,919
Construction Materials–1.33%
Cemex S.A.B. de C.V.–ADR (Mexico)(b)		38,777		458,344
Consumer Finance–3.44%
American Express Co.		20,111		814,898
SLM Corp.(b)		32,833		370,028
				1,184,926
Data Processing & Outsourced Services–2.89%
Alliance Data Systems Corp.(b)		9,652		623,423
Western Union Co. (The)		19,656		370,515
				993,938
Diversified Capital Markets–1.10%
UBS AG (Switzerland)(b)		24,428		378,878
Education Services–0.30%
Apollo Group, Inc.–Class A(b)		1,684		102,017
Electronic Manufacturing Services–3.40%
Flextronics International Ltd. (Singapore)(b)		71,563		523,125
Tyco Electronics Ltd. (Switzerland)		26,341		646,672
				1,169,797
General Merchandise Stores–1.79%
Target Corp.		12,764		617,395
Health Care Equipment–1.00%
Baxter International Inc.		5,870		344,452
Home Improvement Retail–1.48%
Home Depot, Inc. (The)		17,607		509,371
Hotels, Resorts & Cruise Lines–0.86%
Marriott International, Inc.–Class A		10,809		294,545
Household Appliances–1.07%
Whirlpool Corp.		4,581		369,503
Human Resource & Employment Services–2.48%
Robert Half International, Inc.		31,959		854,264
Industrial Conglomerates–1.37%
Tyco International Ltd.		13,220		471,690
Industrial Machinery–3.64%
Illinois Tool Works Inc.		15,066		723,017
Ingersoll-Rand PLC (Ireland)		14,850		530,739
				1,253,756
Investment Banking & Brokerage–1.61%
Morgan Stanley		18,681		552,958
Managed Health Care–5.04%
Aetna Inc.		20,861		661,294
UnitedHealth Group Inc.		35,298		1,075,883
				1,737,177
Movies & Entertainment–0.89%
Walt Disney Co. (The)		9,540		307,665
Oil & Gas Drilling–0.42%
Transocean Ltd.(b)		1,759		145,645
Oil & Gas Equipment & Services–2.69%
Halliburton Co.		15,128		455,202
Weatherford International Ltd.(b)		26,207		469,367
				924,569
Other Diversified Financial Services–5.18%
Bank of America Corp.		55,670		838,390
Citigroup Inc.		73,749		244,109
JPMorgan Chase & Co.		16,795		699,848
				1,782,347
Packaged Foods & Meats–0.95%
Unilever N.V. (Netherlands)		10,069		327,935
Property & Casualty Insurance–2.52%
XL Capital Ltd.–Class A		47,359		868,090

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

AIM V.I. Basic Balanced Fund

	Shares		Value
Regional Banks–1.20%
Fifth Third Bancorp		42,480	$	414,180
Research & Consulting Services–1.01%
Dun & Bradstreet Corp.		4,118		347,436
Semiconductor Equipment–5.96%
ASML Holding N.V. (Netherlands)		39,881		1,354,622
KLA-Tencor Corp.		19,277		697,056
				2,051,678
Specialized Finance–2.73%
Moody’s Corp.		35,039		939,045
Specialty Stores–1.50%
Staples, Inc.		20,983		515,972
Systems Software–2.87%
CA, Inc.		14,638		328,770
Microsoft Corp.		21,668		660,657
				989,427
Total Common Stocks & Other Equity Interests (Cost $23,469,178)				25,059,676
	Principal
	Amount
Bonds & Notes–10.24%
Aerospace & Defense–0.15%
BAE Systems Holdings Inc., Sr. Unsec. Gtd. Notes, 4.95%, 06/01/14(c)	$	20,000		20,566
6.38%, 06/01/19(c)		30,000		31,943
				52,509
Airlines–0.06%
Delta Air Lines, Inc., Series A, Pass Through Ctfs., 7.75%, 12/17/19		20,000		20,687
Asset Management & Custody Banks–0.05%
Bank of New York Mellon Corp. (The), Sr. Unsec. Notes, 4.30%, 05/15/14		15,000		15,804
Automotive Retail–0.19%
AutoZone Inc., Sr. Unsec. Unsub. Notes, 5.88%, 10/15/12		60,000		65,003
Brewers–0.15%
Anheuser-Busch InBev Worldwide Inc., Sr. Unsec. Gtd. Unsub. Notes, 5.38%, 01/15/20(c)		50,000		51,032
Broadcasting–0.27%
COX Communications Inc., Sr. Unsec. Bonds, 8.38%, 03/01/39(c)		30,000		36,838
Sr. Unsec. Global Notes, 5.45%, 12/15/14		20,000		21,479
COX Enterprises Inc., Sr. Unsec. Notes, 7.88%, 09/15/10(c)		35,000		36,415
				94,732
Cable & Satellite–0.03%
Time Warner Cable Inc., Sr. Unsec. Gtd. Unsub. Notes, 5.00%, 02/01/20		10,000		9,764
Consumer Finance–0.06%
Capital One Bank USA N.A., Sr. Unsec. Global Notes, 5.75%, 09/15/10		20,000		20,602
Diversified Banks–0.73%
Barclays Bank PLC (United Kingdom), Sr. Unsec. Unsub. Global Notes, 6.75%, 05/22/19		55,000		61,974
Lloyds TSB Bank PLC (United Kingdom), Sr. Unsec. Unsub. Floating Rate Medium-Term Euro Notes, 3.78%, 04/17/14(d)		58,500		61,094
Standard Chartered PLC (United Kingdom), Sr. Notes, 5.50%, 11/18/14(c)		100,000		105,473
Wachovia Corp.–Series G, Sr. Unsec. Medium-Term Notes, 5.50%, 05/01/13		20,000		21,414
				249,955
Electric Utilities–0.65%
Carolina Power & Light Co., Sec. First Mortgage Bonds, 5.30%, 01/15/19		15,000		15,675
DCP Midstream LLC, Sr. Unsec. Notes, 7.88%, 08/16/10		85,000		88,625
Ohio Power Co., Series 1, Sr. Unsec. Notes, 5.38%, 10/01/21		50,000		50,831
PPL Electric Utilities Corp., Sec. First Mortgage Bonds, 6.25%, 05/15/39		50,000		52,780
Virginia Electric & Power Co., Sr. Unsec. Unsub. Notes, 5.00%, 06/30/19		15,000		15,188
				223,099
Gold–0.29%
Barrick Australian Finance Pty Ltd. (Australia), Unsec. Gtd. Unsub. Global Notes, 4.95%, 01/15/20		50,000		49,478
Newmont Mining Corp., Sr. Unsec. Gtd. Notes, 5.13%, 10/01/19		50,000		50,342
				99,820
Health Care Distributors–0.08%
CareFusion Corp., Sr. Unsec. Notes, 6.38%, 08/01/19(c)		25,000		27,123
Health Care Equipment–0.09%
Boston Scientific Corp., Sr. Unsec. Unsub. Notes, 6.00%, 01/15/20		30,000		30,828

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

AIM V.I. Basic Balanced Fund

	Principal
	Amount		Value
Health Care Services–0.22%
Express Scripts Inc., Sr. Unsec. Gtd. Global Notes, 6.25%, 06/15/14	$	70,000	$	76,827
Hotels, Resorts & Cruise Lines–0.21%
Hyatt Hotels Corp., Sr. Unsec. Unsub. Notes, 5.75%, 08/15/15(c)		70,000		72,205
Housewares & Specialties–0.06%
Newell Rubbermaid Inc., Sr. Unsec. Unsub. Notes, 4.00%, 05/01/10		20,000		20,170
Integrated Telecommunication Services–1.01%
AT&T Inc., Sr. Unsec. Unsub. Global Notes, 6.55%, 02/15/39		25,000		26,522
British Telecommunications PLC (United Kingdom), Sr. Unsec. Unsub. Global Notes, 9.13%, 12/15/10		50,000		53,582
Cellco Partnership/Verizon Wireless Capital LLC, Sr. Unsec. Unsub. Global Notes, 3.75%, 05/20/11		60,000		61,924
DirecTV Holdings LLC/DirecTV Financing Co. Inc., Sr. Unsec. Gtd. Unsub. Global Notes, 7.63%, 05/15/16		40,000		43,800
Koninklijke KPN N.V. (Netherlands), Sr. Unsec. Unsub. Global Bonds, 8.00%, 10/01/10		40,000		41,936
Telecom Italia Capital S.A. (Italy), Sr. Unsec. Gtd. Unsub. Global Notes, 4.88%, 10/01/10		40,000		40,950
Windstream Georgia Communications Corp., Sr. Unsec. Deb., 6.50%, 11/15/13		79,000		78,161
				346,875
Investment Banking & Brokerage–0.49%
Morgan Stanley, Sr. Unsec. Medium-Term Global Notes, 6.00%, 05/13/14		40,000		43,018
Series F, Sr. Unsec. Medium-Term Global Notes, 5.95%, 12/28/17		100,000		104,414
TD Ameritrade Holding Corp., Sr. Unsec. Gtd. Unsub. Notes, 4.15%, 12/01/14		20,000		19,797
				167,229
Life & Health Insurance–0.58%
MetLife Inc., Sr. Unsec. Global Notes, 7.72%, 02/15/19		75,000		88,103
Monumental Global Funding II, Sr. Sec. Unsub. Notes, 5.65%, 07/14/11(c)		25,000		25,994
Protective Life Corp., Sr. Unsec. Notes, 7.38%, 10/15/19		50,000		50,358
Prudential Financial Inc., Series D, Sr. Unsec. Unsub. Medium-Term Notes, 7.38%, 06/15/19		30,000		33,921
				198,376
Managed Health Care–0.14%
UnitedHealth Group Inc., Sr. Unsec. Unsub. Notes, 5.25%, 03/15/11		45,000		46,850
Mortgage Backed Securities–0.37%
U.S. Bank N.A., Sr. Unsec. Unsub. Medium-Term Global Notes, 5.92%, 05/25/12		119,237		126,658
Movies & Entertainment–0.10%
Time Warner Cable Inc., Sr. Unsec. Gtd. Unsub. Global Notes, 6.75%, 07/01/18		30,000		33,180
Multi-Line Insurance–0.13%
Liberty Mutual Group Inc., Sr. Unsec. Notes, 5.75%, 03/15/14(c)		45,000		44,352
Multi-Utilities–0.23%
Dominion Resources Inc., Sr. Unsec. Unsub. Notes, 5.20%, 08/15/19		30,000		30,489
Massachusetts Electric Co., Sr. Unsec. Notes, 5.90%, 11/15/39(c)		50,000		49,656
				80,145
Oil & Gas Exploration & Production–0.39%
Anadarko Petroleum Corp., Sr. Unsec. Notes, 7.63%, 03/15/14		70,000		80,458
EOG Resources Inc., Sr. Unsec. Unsub. Notes, 5.63%, 06/01/19		35,000		37,614
Petrobras International Finance Co. (Cayman Islands), Sr. Unsec. Gtd. Unsub. Global Notes, 6.88%, 01/20/40		15,000		15,344
				133,416
Oil & Gas Storage & Transportation–0.29%
Spectra Energy Capital LLC, Sr. Unsec. Gtd. Notes, 5.65%, 03/01/20		50,000		50,827
Transcontinental Gas Pipe Line Co. LLC, Series B, Sr. Unsec. Unsub. Global Notes, 7.00%, 08/15/11		45,000		48,552
				99,379
Other Diversified Financial Services–1.52%
Bank of America Corp., Sr. Unsec. Unsub. Global Notes, 6.50%, 08/01/16		20,000		21,609
Bear Stearns Cos. LLC (The), Sr. Unsec. Unsub. Floating Rate Notes, 0.68%, 07/19/10(d)		180,000		180,415
Citigroup Inc., Sr. Unsec. Medium-Term Notes, 5.50%, 10/15/14		40,000		40,649
Countrywide Home Loans Inc., Series L, Sr. Unsec. Gtd. Unsub. Medium-Term Global Notes, 4.00%, 03/22/11		15,000		15,470
General Electric Capital Corp., Sr. Unsec. Unsub. Global Notes, 5.90%, 05/13/14		75,000		81,859
JPMorgan Chase & Co., Sr. Unsec. Unsub. Global Notes, 4.75%, 05/01/13		65,000		68,702
6.30%, 04/23/19		20,000		22,202
Merrill Lynch & Co. Inc., Sr. Unsec. Medium-Term Notes, 6.88%, 04/25/18		85,000		92,006
Twin Reefs Pass-Through Trust, Floating Rate Pass Through Ctfs., 1.39%, (Acquired 12/07/04; Cost $90,000)(c)(d)(e)(f)		90,000		293
				523,205

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

AIM V.I. Basic Balanced Fund

	Principal
	Amount		Value
Packaged Foods & Meats–0.09%
Kraft Foods Inc., Sr. Unsec. Unsub. Global Notes, 5.63%, 11/01/11	$	30,000	$	31,941
Paper Packaging–0.12%
Bemis Co. Inc., Sr. Unsec. Unsub. Notes, 5.65%, 08/01/14		40,000		42,747
Paper Products–0.08%
International Paper Co., Sr. Unsec. Unsub. Global Bonds, 7.50%, 08/15/21		25,000		28,026
Pharmaceuticals–0.11%
Mead Johnson Nutrition Co., Sr. Unsec. Gtd. Unsub. Notes, 4.90%, 11/01/19(c)		40,000		39,345
Property & Casualty Insurance–0.07%
CNA Financial Corp., Sr. Unsec. Unsub. Notes, 7.35%, 11/15/19		25,000		25,224
Publishing–0.12%
Reed Elsevier Capital Inc., Sr. Unsec. Gtd. Unsub. Global Notes, 6.75%, 08/01/11		40,000		42,866
Regional Banks–0.18%
PNC Capital Trust C, Jr. Unsec. Gtd. Sub. Floating Rate Trust Pfd. Capital Securities, 0.83%, 06/01/28(d)		100,000		61,293
Research & Consulting Services–0.39%
ERAC USA Finance Co., Unsec. Gtd. Notes, 5.80%, 10/15/12(c)		130,000		136,182
Retail REIT’s–0.09%
WT Finance Aust Pty Ltd./ Westfield Capital/WEA Finance LLC, Sr. Unsec. Gtd. Notes, 4.38%, 11/15/10(c)		30,000		30,588
Soft Drinks–0.07%
Coca-Cola Amatil Ltd. (Australia), Sr. Gtd. Notes, 3.25%, 11/02/14(c)		25,000		24,767
Steel–0.17%
ArcelorMittal (Luxembourg), Sr. Unsec. Unsub. Global Notes, 9.00%, 02/15/15		15,000		17,494
7.00%, 10/15/39		40,000		42,401
				59,895
Trading Companies & Distributors–0.06%
GATX Corp., Sr. Unsec. Notes, 4.75%, 10/01/12		20,000		20,551
Wireless Telecommunication Services–0.15%
American Tower Corp., Sr. Unsec. Notes, 4.63%, 04/01/15(c)		30,000		30,320
Vodafone Group PLC (United Kingdom), Sr. Unsec. Unsub. Global Notes, 5.50%, 06/15/11		20,000		21,114
				51,434
Total Bonds & Notes (Cost $3,503,743)				3,524,684
U.S. Government Sponsored Mortgage-Backed Securities–8.08%
Federal Home Loan Mortgage Corp. (FHLMC)–2.03%
Pass Through Ctfs., 7.00%, 06/01/15 to 06/01/32		77,417		85,909
7.50%, 11/01/30 to 05/01/31		14,788		16,623
6.50%, 08/01/32		3,980		4,299
5.50%, 01/01/35 to 02/01/37		410,456		431,695
Pass Through Ctfs., TBA, 4.50%, 01/01/40(g)		160,000		159,650
				698,176
Federal National Mortgage Association (FNMA)–5.09%
Pass Through Ctfs., 7.50%, 11/01/15 to 03/01/31		71,628		82,203
7.00%, 02/01/16 to 09/01/32		21,237		23,284
6.50%, 07/01/16 to 10/01/35		65,433		71,424
6.00%, 01/01/17 to 03/01/37		254,318		270,198
5.50%, 03/01/21		972		1,031
8.00%, 08/01/21 to 12/01/23		12,542		14,238
Pass Through Ctfs., TBA, 4.00%, 01/01/25(g)		50,000		50,305
4.50%, 01/01/25 to 01/01/40(g)		250,000		254,156
5.00%, 01/01/25 to 01/01/40(g)		600,000		617,641
5.50%, 01/01/40(g)		200,000		209,375
6.00%, 01/01/40(g)		150,000		158,883
				1,752,738
Government National Mortgage Association (GNMA)–0.96%
Pass Through Ctfs., 7.50%, 06/15/23 to 10/15/31		28,354		31,990
8.50%, 11/15/24		28,750		33,168
8.00%, 08/15/25		7,578		8,705
6.50%, 03/15/29 to 01/15/37		238,820		257,915
				331,778
Total U.S. Government Sponsored Mortgage-Backed Securities (Cost $2,726,499)				2,782,692
Asset-Backed Securities–4.74%
Bear Stearns Adjustable Rate Mortgage Trust, Series 2003-6, Class 1A3, Variable Rate Pass Through Ctfs., 4.52%, 08/25/33(d)		43,430		39,963
Bear Stearns Commercial Mortgage Securities, Series 2004-PWR6, Class A6, Pass Through Ctfs., 4.83%, 11/11/41		80,000		78,136
Series 2005-PWR8, Class A4, Pass Through Ctfs., 4.67%, 06/11/41		45,000		43,116
Series 2006-PW11, Class A4, Variable Rate Pass Through Ctfs., 5.46%, 03/11/39(d)		100,000		97,918
Series 2006-T24, Class A4, Pass Through Ctfs., 5.54%, 10/12/41		50,000		49,800

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

AIM V.I. Basic Balanced Fund

	Principal
	Amount		Value
Chase Issuance Trust, Series 2007-A17, Class A, Pass Through Ctfs., 5.12%, 10/15/14	$	80,000	$	86,236
Series 2009-A3, Class A3, Pass Through Ctfs., 2.40%, 06/17/13		50,000		50,772
Citibank Credit Card Issuance Trust, Series 2009-A5, Class A5, Pass Through Ctfs., 2.25%, 12/23/14		50,000		49,760
Citigroup Mortgage Loan Trust Inc., Series 2004-UST1, Class A4, Variable Rate Pass Through Ctfs., 3.11%, 08/25/34(d)		102,366		97,587
Countrywide Asset-Backed Ctfs., Series 2007-4, Class A1B, Pass Through Ctfs., 5.81%, 09/25/37		53,842		53,141
GS Mortgage Securities Corp. II, Series 2005-GG4, Class A4A, Pass Through Ctfs., 4.75%, 07/10/39		125,000		121,205
Honda Auto Receivables Owner Trust, Series 2009-2, Class A3, Pass Through Ctfs., 2.79%, 01/15/13		45,000		45,845
LB-UBS Commercial Mortgage Trust, Series 2001-WM, Class A2, Pass Through Ctfs., 6.53%, 07/14/16(c)		80,000		84,273
Morgan Stanley Capital I, Series 2005-HQ7, Class A4, Variable Rate Pass Through Ctfs., 5.21%, 11/14/42(d)		60,000		59,249
Series 2005-T19, Class A4A, Pass Through Ctfs., 4.89%, 06/12/47		80,000		78,156
Series 2008-T29, Class A1, Pass Through Ctfs., 6.23%, 01/11/43		50,151		51,372
Nissan Auto Receivables Owner Trust, Series 2006-B, Class A4, Pass Through Ctfs., 5.22%, 11/15/11		24,632		24,834
Option One Mortgage Securities Corp., Series 2007-4A, Floating Rate Notes, 0.33%, 04/25/12 (Acquired 05/11/07; Cost $47,228)(c)(d)		47,228		18,891
Structured Asset Securities Corp., Series 2007-OSI, Class A2, Floating Rate Pass Through Ctfs., 0.32%, 06/25/37(d)		82,154		74,803
USAA Auto Owner Trust, Series 2006-2, Class A4, Pass Through Ctfs., 5.37%, 02/15/12		28,293		28,620
Series 2009-1, Class A3, Pass Through Ctfs., 3.02%, 06/17/13		80,000		81,772
Wachovia Bank Commercial Mortgage Trust, Series 2005-C18, Class A4, Pass Through Ctfs., 4.94%, 04/15/42		100,000		97,367
Series 2005-C21, Class A4, Variable Rate Pass Through Ctfs., 5.21%, 10/15/44(d)		40,000		39,868
WaMu Mortgage Pass Through Ctfs., Series 2003-AR8, Class A, Floating Rate Pass Through Ctfs., 2.85%, 08/25/33(d)		80,415		74,656
Wells Fargo Mortgage Backed Securities Trust, Series 2004-K, Class 1A2, Floating Rate Pass Through Ctfs., 4.46%, 07/25/34(d)		28,229		27,057
Series 2004-Z, Class 2A1, Floating Rate Pass Through Ctfs., 3.24%, 12/25/34(d)		84,508		79,423
Total Asset-Backed Securities (Cost $1,584,384)				1,633,820
U.S. Treasury Securities–2.05%
U.S. Treasury Notes–1.31%
1.50%, 12/31/13(h)		260,000		253,216
3.63%, 08/15/19		200,000		196,781
				449,997
U.S. Treasury Bonds–0.74%
5.38%, 02/15/31		195,000		215,688
4.50%, 08/15/39		40,000		39,138
				254,826
Total U.S. Treasury Securities (Cost $731,802)				704,823
U.S. Government Sponsored Agency Securities–0.37%
Federal National Mortgage Association (FNMA)–0.37%
Unsec. Global Notes, 2.63%, 11/20/14 (Cost $129,316)		130,000		128,944
	Shares
Money Market Funds–4.75%
Liquid Assets Portfolio–Institutional Class(i)		817,852		817,852
Premier Portfolio–Institutional Class(i)		817,852		817,852
Total Money Market Funds (Cost $1,635,704)				1,635,704
TOTAL INVESTMENTS–103.00% (Cost $33,780,626)				35,470,343
OTHER ASSETS LESS LIABILITIES–(3.00)%				(1,034,375	)
NET ASSETS–100.00%			$	34,435,968

Investment Abbreviations:

ADR	– American Depositary Receipt
Ctfs.	– Certificates
Deb.	– Debentures
Gtd.	– Guaranteed
Jr.	– Junior
REIT	– Real Estate Investment Trust
Sec.	– Secured
Sr.	– Senior
Sub.	– Subordinated
TBA	– To Be Announced
Unsec.	– Unsecured
Unsub.	– Unsubordinated

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

AIM V.I. Basic Balanced Fund

Notes to Schedule of Investments:

(a)	Industry and/or sector classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s.
(b)	Non-income producing security.
(c)	Security purchased or received in a transaction exempt from registration under the Securities Act of 1933, as amended. The security may be resold pursuant to an exemption from registration under the 1933 Act, typically to qualified institutional buyers. The aggregate value of these securities at December 31, 2009 was $866,256, which represented 2.52% of the Fund’s Net Assets.
(d)	Interest or dividend rate is redetermined periodically. Rate shown is the rate in effect on December 31, 2009.
(e)	Defaulted security. Currently, the issuer is partially or fully in default with respect to interest payments. The value of this security at December 31, 2009 represented 0.00% of the Fund’s Net Assets.
(f)	Perpetual bond with no specified maturity date.
(g)	Security purchased on forward commitment basis. This security is subject to dollar roll transactions. See Note 1I.
(h)	All or a portion of the value was pledged as collateral to cover margin requirements for open futures contracts. See Note 1L and Note 4.
(i)	The money market fund and the Fund are affiliated by having the same investment adviser.

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

AIM V.I. Basic Balanced Fund

Statement of Assets and Liabilities

December 31, 2009

Assets:
Investments, at value (Cost $32,144,922)	$	33,834,639
Investments in affiliated money market funds, at value and cost		1,635,704
Total investments, at value (Cost $33,780,626)		35,470,343
Cash		11,478
Foreign currencies, at value (Cost $29)		29
Receivables for:
Investments sold		553,559
Variation margin		1,003
Dividends and interest		81,793
Investment for trustee deferred compensation and retirement plans		26,095
Total assets		36,144,300
Liabilities:
Payables for:
Investments purchased		1,591,383
Fund shares reacquired		9,213
Accrued fees to affiliates		28,665
Accrued other operating expenses		44,446
Trustee deferred compensation and retirement plans		34,625
Total liabilities		1,708,332
Net assets applicable to shares outstanding	$	34,435,968
Net assets consist of:
Shares of beneficial interest	$	52,439,410
Undistributed net investment income		565,392
Undistributed net realized gain (loss)		(20,265,546	)
Unrealized appreciation		1,696,712
	$	34,435,968
Net Assets:
Series I	$	31,252,709
Series II	$	3,183,259
Shares outstanding, $0.001 par value per share, unlimited number of shares authorized:
Series I		3,594,958
Series II		367,609
Series I:
Net asset value per share	$	8.69
Series II:
Net asset value per share	$	8.66

Statement of Operations

For the year ended December 31, 2009

Investment income:
Interest	$	512,882
Dividends (net of foreign withholding taxes of $9,942)		398,023
Dividends from affiliated money market funds		9,649
Total investment income		920,554
Expenses:
Advisory fees		233,130
Administrative services fees		112,052
Custodian fees		15,133
Distribution fees — Series II		7,142
Transfer agent fees		9,399
Trustees’ and officers’ fees and benefits		20,730
Professional services fees		52,765
Other		23,578
Total expenses		473,929
Less: Fees waived		(186,272	)
Net expenses		287,657
Net investment income		632,897
Realized and unrealized gain (loss) from:
Net realized gain (loss) from:
Investment securities (includes net gains (losses) from securities sold to affiliates of $(36,057))		(4,973,379	)
Foreign currencies		1,704
Futures contracts		(25,539	)
Swap agreements		(67,891	)
		(5,065,105	)
Change in net unrealized appreciation (depreciation) of:
Investment securities		13,443,957
Foreign currencies		(66	)
Futures contracts		(10,023	)
Swap agreements		60,365
		13,494,233
Net realized and unrealized gain		8,429,128
Net increase in net assets resulting from operations	$	9,062,025

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

AIM V.I. Basic Balanced Fund

Statement of Changes in Net Assets

For the years ended December 31, 2009 and 2008

	2009			2008
Operations:
Net investment income	$	632,897		$	1,486,455
Net realized gain (loss)		(5,065,105	)		(4,422,833	)
Change in net unrealized appreciation (depreciation)		13,494,233			(18,183,564	)
Net increase (decrease) in net assets resulting from operations		9,062,025			(21,119,942	)
Distributions to shareholders from net investment income:
Series I		(1,432,717	)		(1,806,595	)
Series II		(137,986	)		(174,919	)
Total distributions from net investment income		(1,570,703	)		(1,981,514	)
Share transactions-net:
Series I		(3,151,421	)		(10,390,808	)
Series II		(329,105	)		(377,217	)
Net increase (decrease) in net assets resulting from share transactions		(3,480,526	)		(10,768,025	)
Net increase (decrease) in net assets		4,010,796			(33,869,481	)
Net assets:
Beginning of year		30,425,172			64,294,653
End of year (includes undistributed net investment income of $565,392 and $1,524,533, respectively)	$	34,435,968		$	30,425,172

Notes to Financial Statements

December 31, 2009

NOTE 1—Significant Accounting Policies

AIM V.I. Basic Balanced Fund (the “Fund”) is a series portfolio of AIM Variable Insurance Funds (the “Trust”). The Trust is a Delaware statutory trust registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end series management investment company consisting of twenty-one separate portfolios, (each constituting a “Fund”). The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Matters affecting each Fund or class will be voted on exclusively by the shareholders of such Fund or class. Current Securities and Exchange Commission (“SEC”) guidance, however, requires participating insurance companies offering separate accounts to vote shares proportionally in accordance with the instructions of the contract owners whose investments are funded by shares of each Fund or class.

  The Fund’s investment objective is long-term growth of capital and current income.

  The Fund currently offers two classes of shares, Series I and Series II, both of which are offered to insurance company separate accounts funding variable annuity contracts and variable life insurance policies (“variable products”).

  The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements.

A.	Security Valuations — Securities, including restricted securities, are valued according to the following policy.
	Debt obligations (including convertible bonds) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution-size trading in similar groups of securities, developments related to specific securities, dividend rate, yield, quality, type of issue, coupon rate, maturity, individual trading characteristics and other market data. Short-term obligations, including commercial paper, having 60 days or less to maturity are recorded at amortized cost which approximates value. Debt securities are subject to interest rate and credit risks. In addition, all debt securities involve some risk of default with respect to interest and/or principal payments.
	A security listed or traded on an exchange (except convertible bonds) is valued at its last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales or official closing price on a particular day, the security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based on prices furnished by independent pricing services or market makers. When such securities are valued by an independent pricing service they may be considered fair valued. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean between the last bid and ask prices from the exchange on which they are principally traded. Options not listed on an exchange are valued by an independent source at the mean between the last bid and ask prices. For purposes of determining net asset value per share, futures and option contracts generally are valued 15 minutes after the close of the customary trading session of the New York Stock Exchange (“NYSE”).

AIM V.I. Basic Balanced Fund

	Investments in open-end and closed-end registered investment companies that do not trade on an exchange are valued at the end of day net asset value per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded.
	Swap agreements are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service are valued based on a model which may include end of day net present values, spreads, ratings, industry, and company performance.
	Foreign securities (including foreign exchange contracts) are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the NYSE. If market quotations are available and reliable for foreign exchange traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that are significant and make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economical upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
	Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities and Corporate Loans. The mean between the last bid and asked prices may be used to value debt obligations other than Corporate Loans.
	Securities for which market quotations are not readily available or are unreliable are valued at fair value as determined in good faith by or under the supervision of the Trust’s officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a security’s fair value.
	Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
B.	Securities Transactions and Investment Income — Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income is recorded on the accrual basis from settlement date. Paydown gains and losses on mortgage and asset-backed securities are recorded as adjustments to interest income. Dividend income is recorded on the ex-dividend date. Bond premiums and discounts are amortized and/or accreted for financial reporting purposes.
	The Fund may periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain/loss for investments no longer held and as unrealized gain/loss for investments still held.
	Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the realized and unrealized net gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the Fund’s net asset value and, accordingly, they reduce the Fund’s total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in the Statement of Operations and Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the adviser.
	The Fund allocates income and realized and unrealized capital gains and losses to a class based on the relative net assets of each class.
C.	Country Determination — For the purposes of making investment selection decisions and presentation in the Schedule of Investments, the investment adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuer’s securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted.
D.	Distributions — Distributions from income and net realized capital gain, if any, are generally paid to separate accounts of participating insurance companies annually and recorded on ex-dividend date.
E.	Federal Income Taxes — The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code necessary to qualify as a regulated investment company and to distribute substantially all of the Fund’s taxable earnings to shareholders. As such, the Fund will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements.
	The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.
F.	Expenses — Fees provided for under the Rule 12b-1 plan of a particular class of the Fund and which are directly attributable to that class are charged to the operations of such class. All other expenses are allocated among the classes based on relative net assets.

AIM V.I. Basic Balanced Fund

G.	Accounting Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print, which is generally 45 days from the period-end date.
H.	Indemnifications — Under the Trust’s organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Fund’s servicing agreements, that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote.
I.	Dollar Roll and Forward Commitment Transactions — The Fund may engage in dollar roll and forward commitment transactions with respect to mortgage-backed securities issued by GNMA, FNMA and FHLMC. These transactions are often conducted on a to be announced (“TBA”) basis. In a TBA mortgage-backed transaction, the seller does not specify the particular securities to be delivered. Rather, a Fund agrees to accept any security that meets specified terms, such as an agreed upon issuer, coupon rate and terms of the underlying mortgages. TBA mortgage-backed transactions generally settle once a month on a specific date.
	In a dollar roll transaction, the Fund sells a mortgage-backed security held in the Fund to a financial institution such as a bank or broker-dealer, and simultaneously agrees to purchase a substantially similar security (same type, coupon and maturity) from the institution at an agreed upon price and future date. The mortgage-backed securities to be purchased will bear the same coupon as those sold, but generally will be collateralized by different pools of mortgages with different prepayment histories. Based on the typical structure of dollar roll transactions by the Fund, the dollar roll transactions are accounted for as financing transactions in which the Fund receives compensation as either a “fee” or a “drop”. “Fee” income which is agreed upon amongst the parties at the commencement of the dollar roll and the “drop” which is the difference between the selling price and the repurchase price of the mortgage-backed securities are amortized to income. During the period between the sale and purchase settlement dates, the Fund will not be entitled to receive interest and principal payments on securities purchased and not yet settled. Proceeds of the sale may be invested in short-term instruments, and the income from these investments, together with any additional fee income received on the sale, could generate income for the Fund exceeding the yield on the security sold. Dollar roll transactions are considered borrowings under the 1940 Act.
	Forward commitment transactions involve commitments by the Fund to acquire or sell TBA mortgage-backed securities from/to a financial institution, such as a bank or broker-dealer at a specified future date and amount. The TBA mortgage-backed security is marked to market until settlement and the unrealized appreciation or depreciation is recorded in the statement of operations.
	At the time the Fund enters into the dollar roll or forward commitment transaction, mortgage-backed securities or other liquid assets held by the Fund having a dollar value equal to the purchase price or in an amount sufficient to honor the forward commitment will be segregated.
	Dollar roll transactions involve the risk that the market value of the securities retained by the Fund may decline below the price of the securities that the Fund has sold but is obligated to purchase under the agreement. In the event that the buyer of securities in a dollar roll transaction files for bankruptcy or becomes insolvent, the Fund’s use of the proceeds from the sale of the securities may be restricted pending a determination by the other party, or its trustee or receiver, whether to enforce the Fund’s obligation to purchase the securities. The return earned by the Fund with the proceeds of the dollar roll transaction may not exceed the return on the securities sold.
	Forward commitment transactions involve the risk that a counter-party to the transaction may fail to complete the transaction. If this occurs, the Fund may lose the opportunity to purchase or sell the security at the agreed upon price. Settlement dates of forward commitment transactions may be a month or more after entering into these transactions and as a result the market values of the securities may vary from the purchase or sale prices. Therefore, forward commitment transactions may increase the Fund’s overall interest rate exposure.
J.	Foreign Currency Translations — Foreign currency is valued at the close of the NYSE based on quotations posted by banks and major currency dealers. Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at date of valuation. Purchases and sales of portfolio securities (net of foreign taxes withheld on disposition) and income items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. The Fund does not separately account for the portion of the results of operations resulting from changes in foreign exchange rates on investments and the fluctuations arising from changes in market prices of securities held. The combined results of changes in foreign exchange rates and the fluctuation of market prices on investments (net of estimated foreign tax withholding) are included with the net realized and unrealized gain or loss from investments in the Statement of Operations. Reported net realized foreign currency gains or losses arise from (i) sales of foreign currencies, (ii) currency gains or losses realized between the trade and settlement dates on securities transactions, and (iii) the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign currency gains and losses arise from changes in the fair values of assets and liabilities, other than investments in securities at fiscal period end, resulting from changes in exchange rates.
	The Fund may invest in foreign securities which may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable.
K.	Foreign Currency Contracts — The Fund may enter into foreign currency contracts to manage or minimize currency or exchange rate risk. The Fund may also enter into foreign currency contracts for the purchase or sale of a security denominated in a foreign currency in order to “lock in” the U.S. dollar price of that security. A foreign currency contract is an obligation to purchase or sell a specific currency for an agreed-upon price at a future date. The use of foreign currency contracts does not eliminate fluctuations in the price of the underlying securities the Fund owns or intends to acquire but establishes a rate of exchange in advance. Fluctuations in the value of these contracts are measured by the difference in the contract date and reporting date exchange rates and are recorded as unrealized appreciation (depreciation) until the contracts are closed. When the contracts are closed,

AIM V.I. Basic Balanced Fund

	realized gains (losses) are recorded. Realized and unrealized gains (losses) on the contracts are included in the Statement of Operations. The primary risks associated with foreign currency contracts include failure of the counterparty to meet the terms of the contract and the value of the foreign currency changing unfavorably. These risks may be in excess of the amounts reflected in the Statement of Assets and Liabilities.
L.	Futures Contracts — The Fund may enter into futures contracts to manage exposure to interest rate, equity and market price movements and/or currency risks. A futures contract is an agreement between two parties to purchase or sell a specified underlying security, currency or commodity (or delivery of a cash settlement price, in the case of an index future) for a fixed price at a future date. The Fund currently invests only in exchange-traded futures and they are standardized as to maturity date and underlying financial instrument. Initial margin deposits required upon entering into futures contracts are satisfied by the segregation of specific securities or cash as collateral at the futures commission merchant (broker). During the period the futures contracts are open, changes in the value of the contracts are recognized as unrealized gains or losses by recalculating the value of the contracts on a daily basis. Subsequent or variation margin payments are received or made depending upon whether unrealized gains or losses are incurred. These amounts are reflected as receivables or payables on the Statement of Assets and Liabilities. When the contracts are closed or expire, the Fund recognizes a realized gain or loss equal to the difference between the proceeds from, or cost of, the closing transaction and the Fund’s basis in the contract. The net realized gain (loss) and the change in unrealized gain (loss) on futures contracts held during the period is included on the Statement of Operations. The primary risks associated with futures contracts are market risk and the absence of a liquid secondary market. If the Fund were unable to liquidate a futures contract and/or enter into an offsetting closing transaction, the Fund would continue to be subject to market risk with respect to the value of the contracts and continue to be required to maintain the margin deposits on the futures contracts. Futures contracts have minimal counterparty risk since the exchange’s clearinghouse, as counterparty to all exchange traded futures, guarantees the futures against default. Risks may exceed amounts recognized in the Statement of Assets and Liabilities.
M.	Swap Agreements — The Fund may enter into various swap transactions, including interest rate, total return, index, currency exchange rate and credit default swap contracts (“CDS”) for investment purposes or to manage interest rate, currency or credit risk.
	Interest rate, total return, index, and currency exchange rate swap agreements are two-party contracts entered into primarily to exchange the returns (or differentials in rates of returns) earned or realized on particular predetermined investments or instruments. The gross returns to be exchanged or “swapped” between the parties are calculated with respect to a notional amount, i.e., the return on or increase in value of a particular dollar amount invested at a particular interest rate or return of an underlying asset, in a particular foreign currency, or in a “basket” of securities representing a particular index.
	A CDS is an agreement between two parties (“Counterparties”) to exchange the credit risk of an issuer. A buyer of a CDS is said to buy protection by paying a fixed payment over the life of the agreement and in some situations an upfront payment to the seller of the CDS. If a defined credit event occurs (such as payment default or bankruptcy), the Fund as a protection buyer would cease paying its fixed payment, the Fund would deliver eligible bonds issued by the reference entity to the seller, and the seller would pay the full notional value, or the “par value”, of the referenced obligation to the Fund. A seller of a CDS is said to sell protection and thus would receive a fixed payment over the life of the agreement and an upfront payment, if applicable. If a credit event occurs, the Fund as a protection seller would cease to receive the fixed payment stream, the Fund would pay the buyer “par value” or the full notional value of the referenced obligation, and the Fund would receive the eligible bonds issued by the reference entity. In turn, these bonds may be sold in order to realize a recovery value. Alternatively, the seller of the CDS and its counterparty may agree to net the notional amount and the market value of the bonds and make a cash payment equal to the difference to the buyer of protection. If no credit event occurs, the Fund receives the fixed payment over the life of the agreement. As the seller, the Fund would effectively add leverage to its portfolio because, in addition to its total net assets, the Fund would be subject to investment exposure on the notional amount of the CDS. In connection with these agreements, cash and securities may be identified as collateral in accordance with the terms of the respective swap agreements to provide assets of value and recourse in the event of default under the swap agreement or bankruptcy/insolvency of a party to the swap agreement.
	Implied credit spreads represent the current level at which protection could be bought or sold given the terms of the existing CDS contract and serve as an indicator of the current status of the payment/performance risk of the CDS. An implied spread that has widened or increased since entry into the initial contract may indicate a deteriorating credit profile and increased risk of default for the reference entity. A declining or narrowing spread may indicate an improving credit profile or decreased risk of default for the reference entity. Alternatively, credit spreads may increase or decrease reflecting the general tolerance for risk in the credit markets.
	Changes in the value of swap agreements are recognized as unrealized gains (losses) in the Statement of Operations by “marking to market” on a daily basis to reflect the value of the swap agreement at the end of each trading day. Payments received or paid at the beginning of the agreement are reflected as such on the Statement of Assets and Liabilities and may be referred to as upfront payments. The Fund accrues for the fixed payment stream and amortizes upfront payments, if any, on swap agreements on a daily basis with the net amount, recorded as a component of realized gain (loss) on the Statement of Operations. A liquidation payment received or made at the termination of a swap agreement is recorded as realized gain (loss) on the Statement of Operations. The Fund segregates liquid securities having a value at least equal to the amount of the potential obligation of a Fund under any swap transaction. The Fund’s maximum risk of loss from counterparty risk, either as the protection seller or as the protection buyer, is the value of the contract. The risk may be mitigated by having a master netting arrangement between the Fund and the counterparty and by the posting of collateral by the counterparty to cover the Fund’s exposure to the counterparty. Entering into these agreements involves, to varying degrees, lack of liquidity and elements of credit, market, and counterparty risk in excess of amounts recognized on the Statement of Assets and Liabilities. Such risks involve the possibility that a swap is difficult to sell or liquidate; the counterparty does not honor its obligations under the agreement and unfavorable interest rates and market fluctuations.
N.	Collateral — To the extent the Fund has pledged or segregated a security as collateral and that security is subsequently sold, it is the Fund’s practice to replace such collateral no later than the next business day.

AIM V.I. Basic Balanced Fund

NOTE 2—Advisory Fees and Other Fees Paid to Affiliates

The Trust has entered into a master investment advisory agreement with Invesco Advisers, Inc. (the “Adviser” or “Invesco”). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Adviser based on the annual rate of the Fund’s average daily net assets as follows:

Average Net Assets	Rate
First $150 million		0	.75%
Over $150 million		0	.50%

  Through December 31, 2009, the Adviser had contractually agreed to waive advisory fees to the extent necessary so that the advisory fees payable by the Fund (based on the Fund’s average daily net assets) do not exceed the annual rate of:

Average Net Assets	Rate
First $150 million		0	.62%
Next $4.85 billion		0	.50%
Next $5 billion		0	.475%
Over $10 billion		0	.45%

  Effective January 1, 2010, through at least April 30, 2011, the Adviser has contractually agreed to waive advisory fees to the extent necessary so that the advisory fees payable by the Fund (based on the Fund’s average daily net assets) do not exceed the annual rate of:

Average Net Assets	Rate
First $250 million		0	.62%
Next $250 million		0	.605%
Next $500 million		0	.59%
Next $1.5 billion		0	.575%
Next $2.5 billion		0	.56%
Next $2.5 billion		0	.545%
Next $2.5 billion		0	.53%
Over $10 billion		0	.515%

  Under the terms of a master sub-advisory agreement approved by shareholders of the Funds between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Trimark Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Funds, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide discretionary investment management services to each Fund based on the percentage of assets allocated to such Sub-Adviser(s).

  On December 31, 2009, Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc., Invesco Private Asset Management, Inc. and Invesco Global Asset Management (N.A.), Inc. merged into Invesco Institutional (N.A.), Inc. and the consolidated adviser firm was renamed Invesco Advisers, Inc.

  The Adviser has contractually agreed to waive advisory fees and/or reimburse expenses of all shares to the extent necessary to limit total annual fund operating expenses after fee waiver (excluding certain items discussed below) of Series I shares to 0.91% and Series II shares to 1.16% of average daily net assets, through at least April 30, 2011. In determining the Adviser’s obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the total annual fund operating expenses after fee waiver to exceed the numbers reflected above: (1) interest; (2) taxes; (3) dividend expense on short sales; (4) extraordinary items or non-routine items; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. The Board of Trustees or Invesco may terminate the fee waiver arrangement at any time.

  Further, the Adviser has contractually agreed, through at least June 30, 2010, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash in such affiliated money market funds.

  For the year ended December 31, 2009, the Adviser waived advisory fees of $186,272.

  At the request of the Trustees of the Trust, Invesco Ltd. agreed to reimburse expenses incurred by the Fund in connection with market timing matters in the AIM Funds, which may include legal, audit, shareholder reporting, communications and trustee expenses. For the year ended December 31, 2009, Invesco Ltd. did not reimburse any expenses.

  The Trust has entered into a master administrative services agreement with Invesco pursuant to which the Fund has agreed to pay Invesco a fee for costs incurred in providing accounting services and fund administrative services to the Fund and to reimburse Invesco for administrative services fees paid to insurance companies that have agreed to provide services to the participants of separate accounts. These administrative services provided by the insurance companies may include, among other things: the printing of prospectuses, financial reports and proxy statements and the delivery of the same to existing participants; the maintenance of master accounts; the facilitation of purchases and redemptions requested by the participants; and the servicing of participants’ accounts. Pursuant to such agreement, for the year ended December 31, 2009, Invesco was paid $50,000 for accounting and fund administrative services and reimbursed $62,052 for services provided by insurance companies.

AIM V.I. Basic Balanced Fund

  The Trust has entered into a transfer agency and service agreement with Invesco Aim Investment Services, Inc. (“IAIS”) pursuant to which the Fund has agreed to pay IAIS a fee for providing transfer agency and shareholder services to the Fund and reimburse IAIS for certain expenses incurred by IAIS in the course of providing such services. For the year ended December 31, 2009, expenses incurred under the agreement are shown in the Statement of Operations as transfer agent fees.

  The Trust has entered into a master distribution agreement with Invesco Aim Distributors, Inc. (“IADI”) to serve as the distributor for the Fund. The Trust has adopted a plan pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund’s Series II shares (the “Plan”). The Fund, pursuant to the Plan, pays IADI compensation at the annual rate of 0.25% of the Fund’s average daily net assets of Series II shares. Of the Plan payments, up to 0.25% of the average daily net assets of the Series II shares may be paid to insurance companies who furnish continuing personal shareholder services to customers who purchase and own Series II shares of the Fund. For the year ended December 31, 2009, expenses incurred under the Plan are detailed in the Statement of Operations as distribution fees.

  Certain officers and trustees of the Trust are officers and directors of Invesco, IAIS and/or IADI.

NOTE 3—Additional Valuation Information

Generally Accepted Accounting Principles (“GAAP”) defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3) generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment’s assigned level:

Level 1 —	Prices are determined using quoted prices in an active market for identical assets.
Level 2 —	Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk and others.
Level 3 —	Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information.

  The following is a summary of the tiered valuation input levels, as of December 31, 2009. The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.

	Level 1		Level 2		Level 3		Total
Equity Securities	$	25,340,758	$	1,354,622	$	—	$	26,695,380
U.S. Treasury Debt Securities		—		704,823		—		704,823
U.S. Government Sponsored Agency Securities		—		2,911,636		—		2,911,636
Corporate Debt Securities		—		3,524,684		—		3,524,684
Asset-Backed Securities		—		1,633,820		—		1,633,820
		25,340,758		10,129,585		—		35,470,343
Other Investments*		7,061						7,061
Total Investments	$	25,347,819	$	10,129,585	$	—	$	35,477,404

*  Other Investments includes futures, which are included at unrealized appreciation.

NOTE 4—Derivative Investments

Effective with the beginning of the Fund’s fiscal year, the Fund has implemented new required disclosures about derivative instruments and hedging activities in accordance with GAAP. GAAP has intended to improve financial reporting about derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity’s financial position and financial performance. The enhanced disclosure has no impact on the results of operations reported in the financial statements.

Value of Derivative Instruments at Period-End

The Table below summarizes the value of the Fund’s derivative instruments, detailed by primary risk exposure, held as of December 31, 2009:

	Value
Risk Exposure/ Derivative Type	Assets		Liabilities
Interest rate risk
Futures contracts(a)	$	19,052	$	(11,991	)

^(a) Includes cumulative appreciation (depreciation) of futures contracts. Only current day’s variation margin receivable is reported within the Statement of Assets & Liabilities.

AIM V.I. Basic Balanced Fund

Effect of Derivative Instruments for the year ended December 31, 2009

The table below summarizes the gains (losses) on derivative instruments, detailed by primary risk exposure, recognized in earnings during the period:

	Location of Gain (Loss) on
	Statement of Operations
				Swap
	Futures*			Agreements*
Realized Gain (Loss)
Credit risk	$	—		$	(67,891	)
Interest rate risk		(25,539	)		—
Change in Unrealized Appreciation (Depreciation)
Credit risk	$	—		$	60,365
Interest rate risk		(10,023	)		—
Total	$	(35,562	)	$	(7,526	)

*  The average value of futures and swap agreements outstanding during the period was $623,643 and $1,291,667, respectively.

Open Futures Contracts
								Unrealized
	Number of		Month/					Appreciation
Contract	Contracts		Commitment		Value			(Depreciation)
U.S. Treasury 2 Year Notes		4		March-2010/Long	$	865,063		$	(3,884	)
U.S. Treasury 5 Year Notes		1		March-2010/Long		114,383			(1,824	)
U.S. Treasury Long Bonds		1		March-2010/Long		115,375			(6,283	)
Subtotal					$	1,094,821		$	(11,991	)
U.S. Treasury 10 Year Notes		5		March-2010/Short		(577,266	)		19,052
Total					$	517,555		$	7,061

NOTE 5—Security Transactions with Affiliated Funds

The Fund is permitted to purchase or sell securities from or to certain other AIM Funds under specified conditions outlined in procedures adopted by the Board of Trustees of the Trust. The procedures have been designed to ensure that any purchase or sale of securities by the Fund from or to another fund or portfolio that is or could be considered an affiliate by virtue of having a common investment adviser (or affiliated investment advisers), common Trustees and/or common officers complies with Rule 17a-7 of the 1940 Act. Further, as defined under the procedures, each transaction is effected at the current market price. Pursuant to these procedures, for the year ended December 31, 2009, the Fund engaged in securities purchases of $151,114 and securities sales of $162,669, which resulted in net realized gains (losses) of $(36,057).

NOTE 6—Trustees’ and Officers’ Fees and Benefits

“Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and “Trustees’ and Officers’ Fees and Benefits” also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various AIM Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees are eligible to participate in a retirement plan that provides for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former Trustees who also participate in a retirement plan and receive benefits under such plan. “Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund.

  During the year ended December 31, 2009, the Fund paid legal fees of $2,835 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A member of that firm is a Trustee of the Trust.

NOTE 7—Cash Balances

The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with The State Street Bank and Trust Company, the custodian bank. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (i) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (ii) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.

AIM V.I. Basic Balanced Fund

NOTE 8—Distributions to Shareholders and Tax Components of Net Assets

Tax Character of Distributions to Shareholders Paid During the Years Ended December 31, 2009 and 2008:

	2009		2008
Ordinary income	$	1,570,703	$	1,981,514

Tax Components of Net Assets at Period-End:

	2009
Undistributed ordinary income	$	604,144
Net unrealized appreciation — investments		920,447
Net unrealized appreciation (depreciation) — other investments		(65	)
Temporary book/tax differences		(36,627	)
Post-October deferrals		(42,950	)
Capital loss carryforward		(19,448,391	)
Shares of beneficial interest		52,439,410
Total net assets	$	34,435,968

  The difference between book-basis and tax-basis unrealized appreciation (depreciation) is due to differences in the timing of recognition of gains and losses on investments for tax and book purposes. The Fund’s net unrealized appreciation difference is attributable primarily to wash sales.

  The temporary book/tax differences are a result of timing differences between book and tax recognition of income and/or expenses. The Fund’s temporary book/tax differences are the result of the trustee deferral of compensation and retirement plan benefits.

  Capital loss carryforward is calculated and reported as of a specific date. Results of transactions and other activity after that date may affect the amount of capital loss carryforward actually available for the Fund to utilize. The ability to utilize capital loss carryforward in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.

  The Fund has a capital loss carryforward as of December 31, 2009 which expires as follows:

	Capital Loss
Expiration	Carryforward*
December 31, 2010	$	10,514,572
December 31, 2016		3,766,236
December 31, 2017		5,167,583
Total capital loss carryforward	$	19,448,391

*  Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code.

NOTE 9—Investment Securities

The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the year ended December 31, 2009 was $15,977,702 and $20,533,496, respectively. Cost of investments on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed Federal income tax reporting period-end.

Unrealized Appreciation (Depreciation) of Investment Securities on a Tax Basis
Aggregate unrealized appreciation of investment securities	$	3,637,796
Aggregate unrealized (depreciation) of investment securities		(2,717,349	)
Net unrealized appreciation of investment securities	$	920,447
Cost of investments for tax purposes is $34,549,896.

NOTE 10—Reclassification of Permanent Differences

Primarily as a result of differing book/tax treatment of foreign currency transactions, paydowns on mortgage-backed securities and swap agreements, on December 31, 2009, undistributed net investment income was decreased by $21,335, undistributed net realized gain (loss) was increased by $21,335. This reclassification had no effect on the net assets of the Fund.

AIM V.I. Basic Balanced Fund

NOTE 11—Share Information

	Summary of Share Activity
	Year ended December 31,
	2009(a)						2008
	Shares			Amount			Shares			Amount
Sold:
Series I		349,171		$	2,595,538			213,379		$	1,989,301
Series II		32,625			248,311			39,073			381,508
Issued as reinvestment of dividends:
Series I		168,555			1,432,717			265,676			1,806,595
Series II		16,291			137,986			25,837			174,919
Reacquired:
Series I		(972,587	)		(7,179,676	)		(1,426,183	)		(14,186,704	)
Series II		(98,463	)		(715,402	)		(99,172	)		(933,644	)
Net increase (decrease) in share activity		(504,408	)	$	(3,480,526	)		(981,390	)	$	(10,768,025	)

^(a) There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 82% of the outstanding shares of the Fund. The Fund and the Fund’s principal underwriter or advisor, are parties to participation agreements with these entities whereby these entities sell units of interest in separate accounts funding variable products that are invested in the Fund. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and or Invesco affiliates including but not limited to services such as, securities brokerage, third party record keeping and account servicing and administrative services. The Trust has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially.

NOTE 12—Financial Highlights

The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.

																					Ratio of			Ratio of
																					expenses			expenses
					Net gains																to average			to average net			Ratio of net
	Net asset				(losses) on						Dividends										net assets			assets without			investment
	value,		Net		securities (both			Total from			from net			Net asset					Net assets,		with fee waivers			fee waivers			income
	beginning		investment		realized and			investment			investment			value, end		Total			end of period		and/or expenses			and/or expenses			to average			Portfolio
	of period		income(a)		unrealized)			operations			income			of period		Return(b)			(000s omitted)		absorbed			absorbed			net assets			turnover(c)
Series I
Year ended 12/31/09	$	6.81	$	0.15	$	2.14		$	2.29		$	(0.41	)	$	8.69		33.84	%	$	31,253		0.90	%(d)		1.50	%(d)		2.06	%(d)		57	%
Year ended 12/31/08		11.81		0.31		(4.84	)		(4.53	)		(0.47	)		6.81		(38.32	)		27,596		0.91			1.35			3.11			50
Year ended 12/31/07		11.92		0.28		(0.01	)		0.27			(0.38	)		11.81		2.20			59,000		0.91			1.18			2.31			47
Year ended 12/31/06		10.99		0.25		0.91			1.16			(0.23	)		11.92		10.55			84,212		0.91			1.15			2.16			44
Year ended 12/31/05		10.59		0.18		0.38			0.56			(0.16	)		10.99		5.29			90,633		0.95			1.15			1.68			44
Series II
Year ended 12/31/09		6.78		0.13		2.13			2.26			(0.38	)		8.66		33.54			3,183		1.15	(d)		1.75	(d)		1.81	(d)		57
Year ended 12/31/08		11.73		0.28		(4.79	)		(4.51	)		(0.44	)		6.78		(38.46	)		2,829		1.16			1.60			2.86			50
Year ended 12/31/07		11.84		0.25		(0.01	)		0.24			(0.35	)		11.73		1.94			5,295		1.16			1.43			2.06			47
Year ended 12/31/06		10.91		0.22		0.91			1.13			(0.20	)		11.84		10.36			5,878		1.16			1.40			1.91			44
Year ended 12/31/05		10.53		0.15		0.37			0.52			(0.14	)		10.91		4.91			5,870		1.20			1.40			1.43			44

(a)	Calculated using average shares outstanding.
(b)	Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Total returns do not reflect charges assessed in connection with a variable product, which if included would reduce total returns.
(c)	Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable.
(d)	Ratios are based on average daily net assets (000’s omitted) of $28,227 and $2,857 for Series I and Series II shares, respectively.

AIM V.I. Basic Balanced Fund

Report of Independent Registered Public Accounting Firm

To the Board of Trustees of AIM Variable Insurance Funds

and Shareholders of AIM V.I. Basic Balanced Fund:

In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of AIM V.I. Basic Balanced Fund (one of the funds constituting AIM Variable Insurance Funds, hereafter referred to as the “Fund”) at December 31, 2009, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for the each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at December 31, 2009 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.

PRICEWATERHOUSECOOPERS LLP

February 10, 2010

Houston, Texas

AIM V.I. Basic Balanced Fund

Calculating your ongoing Fund expenses

Example

As a shareholder of the Fund, you incur ongoing costs, including management fees; distribution and/or service fees (12b-1); and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period July 1, 2009 through December 31, 2009.

  The actual and hypothetical expenses in the examples below do not represent the effect of any fees or other expenses assessed in connection with a variable product; if they did, the expenses shown would be higher while the ending account values shown would be lower.

Actual expenses

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

Hypothetical example for comparison purposes

The table below also provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return.

  The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

  Please note that the expenses shown in the table are meant to highlight your ongoing costs. Therefore, the hypothetical information is useful in comparing ongoing costs, and will not help you determine the relative total costs of owning different funds.

							HYPOTHETICAL
							(5% annual return before
			ACTUAL				expenses)
	Beginning		Ending		Expenses		Ending		Expenses		Annualized
	Account Value		Account Value		Paid During		Account Value		Paid During		Expense
Class	(07/01/09)		(12/31/09)1		Period2		(12/31/09)		Period2		Ratio
Series I	$	1,000.00	$	1,223.40	$	5.04	$	1,020.67	$	4.58		0.90	%
Series II		1,000.00		1,223.50		6.45		1,019.41		5.85		1.15

1	The actual ending account value is based on the actual total return of the Fund for the period July 1, 2009 through December 31, 2009, after actual expenses and will differ from the hypothetical ending account value which is based on the Fund’s expense ratio and a hypothetical annual return of 5% before expenses.
2	Expenses are equal to the Fund’s annualized expense ratio as indicated above multiplied by the average account value over the period, multiplied by 184/365 to reflect the most recent fiscal half year.

AIM V.I. Basic Balanced Fund

Tax Information

Form 1099-DIV, Form 1042-S and other year-end tax information provide shareholders with actual calendar year amounts that should be included in their tax returns. Shareholders should consult their tax advisors.

  The following distribution information is being provided as required by the Internal Revenue Code or to meet a specific state’s requirement.

  The Fund designates the following amounts or, if subsequently determined to be different, the maximum amount allowable for its fiscal year ended December 31, 2009:

Federal and State Income Tax
Corporate Dividends Received Deduction*	32.71%
U.S. Treasury Obligations*	1.09%

*  The above percentages are based on ordinary income dividends paid to shareholders during the Fund’s fiscal year.

AIM V.I. Basic Balanced Fund

Trustees and Officers

The address of each trustee and officer of AIM Variable Insurance Funds (the “Trust”), is 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173. Each trustee oversees 105 portfolios in the AIM Funds complex. The trustees serve for the life of the Trust, subject to their earlier death, incapacitation, resignation, retirement or removal as more specifically provided in the Trust’s organizational documents. Each officer serves for a one year term or until their successors are elected and qualified. Column two below includes length of time served with predecessor entities, if any.

	Trustee and/
Name, Year of Birth and	or Officer	Principal Occupation(s)	Other Directorship(s)
Position(s) Held with the Trust	Since	During Past 5 Years	Held by Trustee
Interested Persons
Martin L. Flanagan1 — 1960 Trustee	2007	Executive Director, Chief Executive Officer and President, Invesco Ltd. (ultimate parent of Invesco Aim and a global investment management firm); Adviser to the Board, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Trustee, The AIM Family of Funds®; Board of Governors, Investment Company Institute; and Member of Executive Board, SMU Cox School of Business	None
		Formerly: Chairman, Invesco Aim Advisors, Inc. (registered investment adviser); Director, Chairman, Chief Executive Officer and President, IVZ Inc. (holding company), INVESCO Group Services, Inc. (service provider) and Invesco North American Holdings, Inc. (holding company); Director, Chief Executive Officer and President, Invesco Holding Company Limited (parent of Invesco Aim and a global investment management firm); Director, Invesco Ltd.; Chairman and Vice Chairman, Investment Company Institute
Philip A. Taylor2 — 1954 Trustee, President and Principal Executive Officer	2006	Head of North American Retail and Senior Managing Director, Invesco Ltd.; Director, Co-Chairman, Co-President and Co- Chief Executive Officer, Invesco Advisers, inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Director, Chief Executive Officer and President, Invesco Aim Advisors, Inc. and 1371 Preferred Inc. (holding company); Director, Chairman, Chief Executive Officer and President, Invesco Aim Management Group, Inc. (financial services holding company); Director, Co-Chairman, Co-President and Co-Chief Executive Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Director and President, INVESCO Funds Group, Inc. (registered investment adviser and registered transfer agent) and AIM GP Canada Inc. (general partner for limited partnerships); Director, Invesco Aim Distributors, Inc. (registered broker dealer); Director and Chairman, Invesco Aim Investment Services, Inc. (registered transfer agent) and INVESCO Distributors, Inc. (registered broker dealer); Director, President and Chairman, INVESCO Inc. (holding company) and Invesco Canada Holdings Inc. (holding company); Chief Executive Officer, AIM Trimark Corporate Class Inc. (corporate mutual fund company) and AIM Trimark Canada Fund Inc. (corporate mutual fund company); Director and Chief Executive Officer, Invesco Trimark Ltd./Invesco Trimark Ltèe (registered investment adviser and registered transfer agent) and Invesco Trimark Dealer Inc. (registered broker dealer); Trustee, President and Principal Executive Officer, The AIM Family of Funds® (other than AIM Treasurer’s Series Trust and Short-Term Investments Trust); Trustee and Executive Vice President, The AIM Family of Funds® (AIM Treasurer’s Series Trust and Short-Term Investments Trust only); and Manager, Invesco PowerShares Capital Management LLC	None
		Formerly: Manager, Invesco PowerShares Capital Management LLC; Director, Chief Executive Officer and President, Invesco Aim Advisors, Inc.; Director, Chairman, Chief Executive Officer and President, Invesco Aim Capital Management, Inc.; President, Invesco Trimark Dealer Inc. and Invesco Trimark Ltd./Invesco Trimark Ltèe; Director and President, AIM Trimark Corporate Class Inc. and AIM Trimark Canada Fund Inc.; Senior Managing Director, Invesco Holding Company Limited; Trustee and Executive Vice President, Tax-Free Investments Trust; Director and Chairman, Fund Management Company (former registered broker dealer); President and Principal Executive Officer, The AIM Family of Funds® (AIM Treasurer’s Series Trust, Short-Term Investments Trust and Tax-Free Investments Trust only); President, AIM Trimark Global Fund Inc. and AIM Trimark Canada Fund Inc.
Independent Trustees
Bruce L. Crockett — 1944 Trustee and Chair	1993	Chairman, Crockett Technology Associates (technology consulting company)	ACE Limited (insurance company); Captaris, Inc. (unified messaging provider); and Investment Company Institute
Bob R. Baker — 1936 Trustee	2004	Retired	None
Frank S. Bayley — 1939 Trustee	2001	Retired	None
		Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios)
James T. Bunch — 1942 Trustee	2004	Founder, Green, Manning & Bunch Ltd., (investment banking firm)	Board of Governors, Western Golf Association/Evans Scholars Foundation and Executive Committee, United States Golf Association
Albert R. Dowden — 1941 Trustee	2000	Director of a number of public and private business corporations, including the Boss Group, Ltd. (private investment and management); Reich & Tang Funds (registered investment company); and Homeowners of America Holding Corporation/Homeowners of America Insurance Company (property casualty company)	Board of Nature’s Sunshine Products, Inc.
		Formerly: Director, Continental Energy Services, LLC (oil and gas pipeline service); Director, CompuDyne Corporation (provider of product and services to the public security market) and Director, Annuity and Life Re (Holdings), Ltd. (reinsurance company); Director, President and Chief Executive Officer, Volvo Group North America, Inc.; Senior Vice President, AB Volvo; Director of various public and private corporations
Jack M. Fields — 1952 Trustee	1997	Chief Executive Officer, Twenty First Century Group, Inc. (government affairs company); and Owner and Chief Executive Officer, Dos Angelos Ranch, L.P. (cattle, hunting, corporate entertainment), Discovery Global Education Fund (non-profit) and Cross Timbers Quail Research Ranch (non-profit)	Administaff
		Formerly: Chief Executive Officer, Texana Timber LP (sustainable forestry company)
Carl Frischling — 1937 Trustee	1993	Partner, law firm of Kramer Levin Naftalis and Frankel LLP	Director, Reich & Tang Funds (16 portfolios)
Prema Mathai-Davis — 1950 Trustee	1998	Retired	None
Lewis F. Pennock — 1942 Trustee	1993	Partner, law firm of Pennock & Cooper	None
Larry Soll — 1942 Trustee	2004	Retired	None
Raymond Stickel, Jr. — 1944 Trustee	2005	Retired	None
		Formerly: Director, Mainstay VP Series Funds, Inc. (25 portfolios)

1	Mr. Flanagan is considered an interested person of the Trust because he is an officer of the adviser to the Trust, and an officer and a director of Invesco Ltd., ultimate parent of the adviser to the Trust.
2	Mr. Taylor is considered an interested person of the Trust because he is an officer and a director of the adviser to, and a director of the principal underwriter of, the Trust.

T-1

Trustees and Officers — (continued)

	Trustee and/
Name, Year of Birth and	or Officer	Principal Occupation(s)	Other Directorship(s)
Position(s) Held with the Trust	Since	During Past 5 Years	Held by Trustee
Other Officers
Russell C. Burk — 1958 Senior Vice President and Senior Officer	2005	Senior Vice President and Senior Officer of The AIM Family of Funds®	N/A
John M. Zerr — 1962 Senior Vice President, Chief Legal Officer and Secretary	2006	Director, Senior Vice President, Secretary and General Counsel, Invesco Aim Management Group, Inc., Senior Vice President, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Director, Senior Vice President and Secretary, Invesco Aim Distributors, Inc.; Director, Vice President and Secretary, Invesco Aim Investment Services, Inc. and INVESCO Distributors, Inc.; Director and Vice President, INVESCO Funds Group, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The AIM Family of Funds®; and Manager, Invesco PowerShares Capital Management LLC	N/A
		Formerly: Director, Senior Vice President, General Counsel and Secretary, Invesco Aim Advisors, Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco Aim Capital Management, Inc.; Chief Operating Officer and General Counsel, Liberty Ridge Capital, Inc. (an investment adviser); Vice President and Secretary, PBHG Funds (an investment company) and PBHG Insurance Series Fund (an investment company); Chief Operating Officer, General Counsel and Secretary, Old Mutual Investment Partners (a broker-dealer); General Counsel and Secretary, Old Mutual Fund Services (an administrator) and Old Mutual Shareholder Services (a shareholder servicing center); Executive Vice President, General Counsel and Secretary, Old Mutual Capital, Inc. (an investment adviser); and Vice President and Secretary, Old Mutual Advisors Funds (an investment company)
Lisa O. Brinkley — 1959 Vice President	2004	Global Compliance Director, Invesco Ltd.; Chief Compliance Officer, Invesco Aim Distributors, Inc. and Invesco Aim Investment Services, Inc.; and Vice President, The AIM Family of Funds®	N/A
		Formerly: Senior Vice President, Invesco Aim Management Group, Inc.; Senior Vice President and Chief Compliance Officer, Invesco Aim Advisors, Inc. and The AIM Family of Funds®; Vice President and Chief Compliance Officer, Invesco Aim Capital Management, Inc. and Invesco Aim Distributors, Inc.; Vice President, Invesco Aim Investment Services, Inc. and Fund Management Company
Kevin M. Carome — 1956 Vice President	2003	General Counsel, Secretary and Senior Managing Director, Invesco Ltd.; Director, Invesco Holding Company Limited and INVESCO Funds Group, Inc.; Director and Executive Vice President, IVZ, Inc., Invesco Group Services, Inc., Invesco North American Holdings, Inc. and Invesco Investments (Bermuda) Ltd.; Director and Secretary, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); and Vice President, The AIM Family of Funds® Formerly: Senior Managing Director and Secretary, Invesco North American Holdings, Inc.; Vice President and Secretary, IVZ, Inc. and Invesco Group Services, Inc.; Senior Managing Director and Secretary, Invesco Holding Company Limited; Director, Senior Vice President, Secretary and General Counsel, Invesco Aim Management Group, Inc. and Invesco Aim Advisors, Inc.; Senior Vice President, Invesco Aim Distributors, Inc.; Director, General Counsel and Vice President, Fund Management Company; Vice President, Invesco Aim Capital Management, Inc. and Invesco Aim Investment Services, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The AIM Family of Funds®; Director and Vice President, INVESCO Distributors, Inc.; and Chief Executive Officer and President, INVESCO Funds Group, Inc.	N/A
Sheri Morris — 1964 Vice President, Treasurer and Principal Financial Officer	1999	Vice President, Treasurer and Principal Financial Officer, The AIM Family of Funds®; and Vice President, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.)	N/A
		Formerly: Vice President, Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.; Assistant Vice President and Assistant Treasurer, The AIM Family of Funds® and Assistant Vice President, Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.
Karen Dunn Kelley — 1960 Vice President	1993	Head of Invesco’s World Wide Fixed Income and Cash Management Group; Senior Vice President, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Executive Vice President, Invesco Aim Distributors, Inc.; Senior Vice President, Invesco Aim Management Group, Inc.; and Director, Invesco Mortgage Capital Inc.; Vice President, The AIM Family of Funds® (other than AIM Treasurer’s Series Trust and Short-Term Investments Trust); and President and Principal Executive Officer, The AIM Family of Funds® (AIM Treasurer’s Series Trust and Short-Term Investments Trust only)	N/A
		Formerly: Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Director of Cash Management and Senior Vice President, Invesco Aim Advisors, Inc. and Invesco Aim Capital Management, Inc.; President and Principal Executive Officer, Tax-Free Investments Trust; Director and President, Fund Management Company; Chief Cash Management Officer, Director of Cash Management, Senior Vice President, and Managing Director, Invesco Aim Capital Management, Inc.; Director of Cash Management, Senior Vice President, and Vice President, Invesco Aim Advisors, Inc. and The AIM Family of Funds® (AIM Treasurer’s Series Trust, Short-Term Investments Trust and Tax-Free Investments Trust only)
Lance A. Rejsek — 1967 Anti-Money Laundering Compliance Officer	2005	Anti-Money Laundering Compliance Officer, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Invesco Aim Distributors, Inc., Invesco Aim Investment Services, Inc., and The AIM Family of Funds®	N/A
		Formerly: Anti-Money Laundering Compliance Officer, Fund Management Company, Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.
Todd L. Spillane — 1958 Chief Compliance Officer	2006	Senior Vice President, Invesco Aim Management Group, Inc.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Chief Compliance Officer, The AIM Family of Funds®, INVESCO Private Capital Investments, Inc. (holding company), Invesco Private Capital, Inc. (registered investment adviser) and Invesco Senior Secured Management, Inc. (registered investment adviser); Vice President, Invesco Aim Distributors, Inc. and Invesco Aim Investment Services, Inc.	N/A
		Formerly: Senior Vice President and Chief Compliance Officer, Invesco Aim Advisors, Inc. and Invesco Aim Capital Management, Inc.; Chief Compliance Officer, Invesco Global Asset Management (N.A.), Inc.; Vice President, Invesco Aim Capital Management, Inc. and Fund Management Company

The Statement of Additional Information of the Trust includes additional information about the Fund’s Trustees and is available upon request, without charge, by calling 1.800.959.4246. Please refer to the Fund’s prospectus for information on the Fund’s sub-advisers.

Office of the Fund	Investment Adviser	Distributor	Auditors
11 Greenway Plaza, Suite 100	Invesco Advisers, Inc.	Invesco Aim Distributors, Inc.	PricewaterhouseCoopers LLP
Houston, TX 77046-1173	1555 Peachtree Street, N.E.	11 Greenway Plaza, Suite 100	1201 Louisiana Street, Suite 2900
	Atlanta, GA 30309	Houston, TX 77046-1173	Houston, TX 77002-5678
Counsel to the Fund	Counsel to the	Transfer Agent	Custodian
Stradley Ronon Stevens & Young, LLP	Independent Trustees	Invesco Aim Investment Services, Inc.	State Street Bank and Trust Company
2600 One Commerce Square	Kramer, Levin, Naftalis & Frankel LLP	P.O. Box 4739	225 Franklin
Philadelphia, PA 19103	1177 Avenue of the Americas	Houston, TX 77210-4739	Boston, MA 02110-2801
	New York, NY 10036-2714

T-2

AIM V.I. Basic Value Fund
Annual Report to Shareholders § December 31, 2009

The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter-ends. For the second and fourth quarters, the lists appear in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The Fund’s Form N-Q filings are available on the SEC website, sec.gov. Copies of the Fund’s Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers for the Fund are 811-07452 and 033-57340. The Fund’s most recent portfolio holdings, as filed on Form N-Q, have also been made available to insurance companies issuing variable annuity contracts and variable life insurance policies (“variable products”) that invest in the Fund.

A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, from our Client Services department at 800 410 4246 or on the Invesco Aim website, invescoaim.com. On the home page, scroll down and click on Proxy Policy. The information is also available on the SEC website, sec.gov.

Information regarding how the Fund voted proxies related to its portfolio securities during the 12 months ended June 30, 2009, is available at our website, invescoaim.com. Click the About Us tab at the top of the home page; click Legal Information; and then click Proxy Voting Search. The information is also available on the SEC website, sec.gov.

Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Aim Distributors, Inc. is the U.S. distributor for Invesco Ltd.’s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd.

This report must be accompanied or preceded by a currently effective Fund prospectus and variable product prospectus, which contain more complete information, including sales charges and expenses. Investors should read each carefully before investing.

Invesco Aim Distributors, Inc.

NOT FDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEE

Management’s Discussion of Fund Performance

Performance summary

For the year ended December 31, 2009, AIM V.I. Basic Value Fund, excluding variable product issuer charges, outperformed the S&P 500 Index, the Russell 1000 Value Index and the Lipper VUF Large-Cap Value Funds Index.

     Drivers of performance were largely stock specific. We attribute the Fund’s outperformance versus its indexes mainly to above-market returns from several of our investments in the financials and information technology sectors. Select investments in financials were also among the largest detractors from Fund performance during the year.

     Your Fund’s long-term performance appears later in this report.

Fund vs. Indexes

Total returns, 12/31/08 to 12/31/09, excluding variable product issuer charges.

If variable product issuer charges were included, returns would be lower.

Series I Shares	48.00	%
Series II Shares	47.74
S&P 500 Index6 (Broad Market Index)	26.47
Russell 1000 Value Index6 (Style-Specific Index)	19.69
Lipper VUF Large-Cap Value Funds Index6 (Peer Group Index)	23.53

6  Lipper Inc.

How we invest

We seek to create wealth by maintaining a long-term investment horizon and investing in companies that are selling at a significant discount to their estimated intrinsic value. We believe intrinsic value represents the inherent business value of portfolio holdings based on our estimates of future company cash flow. Intrinsic value calculations are estimates and, as a result, market price may never reflect intrinsic value estimates, especially for an entire portfolio. Conversely, we consider selling a stock for any of the following reasons — a stock is trading significantly above our estimate of intrinsic value; a permanent, fundamental deterioration results in a reduction in estimated intrinsic value with inadequate upside potential or unexpected deterioration in financial strength; or to capitalize on a more attractive investment opportunity. The Fund’s philosophy is based on key elements that we believe have extensive empirical evidence:

n	Company intrinsic values can be reasonably estimated. Importantly, this estimated fair business value is independent of the company’s stock price.
n	Market prices are more volatile than business values, partly because investors regularly overreact to negative news.
n	Long-term investment results are a function of the level and growth of business value in the portfolio.

     Since our application of this strategy is highly disciplined and relatively unique, it is important to understand the benefits and limitations of our process. First, the investment strategy is intended to preserve your capital while growing it at above-market rates over the long term. Second, our investments have little in common with popular stock market indexes and most of our peers. And third, the Fund’s short-term relative performance will naturally be different than the stock market and peers and have little information value since we simply don’t own the same stocks.

Market conditions and your Fund

The year 2009 was truly a tale of two markets. During the first few months of the year, equity markets declined steeply as severe problems in the credit markets and a deteriorating outlook for corporate earnings led to a global recession. However, the U.S. economy began to show signs that the contraction was subsiding, and equity markets rapidly reversed direction beginning in March 2009, and rallied strongly for the rest of the year.

     In this environment, sectors with the highest returns in the broad market as represented by the S&P 500 Index included more economically sensitive sectors such as information technology and consumer discretionary.¹ Conversely, sectors with the lowest returns included less economically sensitive sectors such as consumer staples and health care.¹

     While financial-market stress has eased significantly, we believe overall equity market valuations remain attractive. Our investment results can be lumpy during periods like this, but historically these types of markets have yielded attractive opportunities for future capital growth.

     ASML, the world’s leading provider of lithography systems for the semiconductor industry, was among the Fund’s top contributors during the year. Despite a difficult business environment, a recent sales rebound and improved cost trends have returned the company to profitability and improved its outlook for 2010.

     The financials sector outperformed during much of 2009 as investors contemplated an eventual end, or at least an abatement, to the global credit crisis. Our investments in Morgan Stanley and XL Capital posted double- and triple-digit gains, respectively, and made significant contributions to Fund performance. Morgan Stanley’s stock rose by over 90% during the year. Investors reacted

Portfolio Composition
By sector

Information Technology	25.7	%
Financials	25.5
Consumer Discretionary	17.7
Industrials	11.5
Health Care	8.7
Energy	4.0
Consumer Staples	2.7
Materials	1.6
Money Market Funds
Plus Other Assets Less Liabilities	2.6

Top 10 Equity Holdings*

1. ASML Holding N.V.		5.3	%
2. UnitedHealth Group Inc.		4.3
3. Moody’s Corp.		3.7
4. XL Capital Ltd.-Class A		3.5
5. Robert Half International, Inc.		3.4
6. Bank of America Corp.		3.2
7. American Express Co.		3.2
8. Omnicom Group Inc.		3.1
9. Dell Inc.		2.9
10. KLA-Tencor Corp.		2.7
Total Net Assets	$360.2 million
Total Number of Holdings*		45

The Fund’s holdings are subject to change, and there is no assurance that the Fund will continue to hold any particular security.

* Excluding money market fund holdings.

AIM V.I. Basic Value Fund

favorably to the announcement of a joint venture between the company and Citigroup in which Morgan Stanley bought Citi’s Smith Barney unit and combined it with its own global wealth management group. The new joint venture, called Morgan Stanley Smith Barney, is the industry’s leading wealth management business.

     After declining significantly in 2008 due to credit-related issues, specialty insurance provider XL Capital’s stock rebounded from its early-2009 lows, gaining over 400% during the year as investor concerns abated. We continue to believe the company is undervalued despite its significant rebound.

     In addition to these investments, a legal settlement the Fund received from the Tyco International class action lawsuit was a meaningful contributor to 2009 results. The legal settlement was in addition to the stock’s 65% gain during 2009.

     While many financial stocks performed well, Citigroup’s stock fell by more than 45% during the year. In February, Citigroup took the dramatic step of recapitalizing the company via a preferred-for-common exchange. The action bolstered Citigroup’s capital position to among the strongest in the world, but diluted our estimate of per-share intrinsic value severely.

     Our valuation analysis suggested the recent market stress produced some of the most compelling valuation opportunities in recent history. As a consequence, our turnover was higher than normal during the year as we tried to exploit those opportunities.

Context for results

The crisis environment that characterized 2008 and part of 2009 has abated since the market’s March 2009 low. This process was favorable to the Fund and shifted investor attention to the valuation opportunities created by the crisis and exploited by our investment process. We continue to believe the valuation opportunity captured by the Fund remains very attractive despite record appreciation since March 9, 2009. But a self-sustaining economic recovery is a necessary precondition to further normalization of equity values.

     Since the market low in March, valuation spreads have tightened from record-wide levels and, consequently, the difference between price and our estimate of portfolio value also has declined. However, despite the sharp market increase, the Fund’s price-to-value ratio remains very attractive versus history, but substantially less than at the recent market low. Shareholders should not expect the magnitude of recent outperformance to be repeated in the next 12 months. While we think portfolio values remain compelling, the next phase of any market recovery could prove more muted.

Portfolio assessment

We believe the single most important indicator of the way the Fund is positioned for potential future success is not our historical investment results or popular statistical measures, but rather the difference between current market prices and the Fund’s estimated intrinsic value — the aggregate business value of the portfolio based on our estimate of intrinsic value for each individual holding.

     At the close of the quarter, the difference between the market price and the estimated intrinsic value of the Fund remained high versus history, according to our estimation. While there is no assurance that market value will ever reflect our estimate of the Fund’s intrinsic value, we believe the large gap between price and estimated intrinsic value may cause above-average capital appreciation as capital markets normalize.

In closing

Markets experienced a strong recovery during 2009, and the Fund significantly outperformed its indexes. While we do not expect a repeat of 2009’s results in 2010, we do believe the Fund’s price-to-value ratio remains very attractive versus history.

     We continue to work hard to protect and grow the Fund’s estimated intrinsic value. We thank you for your investment and for sharing our long-term investment perspective.

1    Lipper Inc.

The views and opinions expressed in management’s discussion of Fund performance are those of Invesco Advisers, Inc. These views and opinions are subject to change at any time based on factors such as market and economic conditions. These views and opinions may not be relied upon as investment advice or recommendations, or as 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 Invesco Advisers, Inc. 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.

See important Fund and index disclosures later in this report.

Bret Stanley

Chartered Financial Analyst, senior portfolio manager, is lead manager of AIM V.I. Basic Value Fund. He began his investment career in 1988 and joined Invesco Aim in 1998. Mr. Stanley earned a B.B.A. in finance from The University of Texas at Austin and an M.S. in finance from the University of Houston.

R. Canon Coleman II

Chartered Financial Analyst, portfolio manager, is manager of AIM V.I. Basic Value Fund. He began his investment career in 1996 and joined Invesco Aim in 2000. Mr. Coleman earned a B.S. and an M.S. in accounting from the University of Florida. He also earned an M.B.A. from the Wharton School at the University of Pennsylvania.

Matthew Seinsheimer

Chartered Financial Analyst, senior portfolio manager, is manager of AIM V.I. Basic Value Fund. He began his investment career in 1992 and joined Invesco Aim in 1998. He earned a B.B.A. in finance from Southern Methodist University and an M.B.A. from The University of Texas at Austin.

Michael Simon

Chartered Financial Analyst, senior portfolio manager, is manager of AIM V.I. Basic Value Fund. He began his investment career in 1989 and joined Invesco Aim in 2001. Mr. Simon earned a B.B.A. in finance from Texas Christian University and an M.B.A. from the University of Chicago.

Assisted by the Basic Value Team

AIM V.I. Basic Value Fund

Your Fund’s Long-Term Performance

Results of a $10,000 Investment — Oldest Share Classes since Inception
Index data from 8/31/01, Fund data from 9/10/01

1 Lipper Inc.

Past performance cannot guarantee comparable future results.

     This chart, which is a logarithmic chart, presents the fluctuations in the value of the Fund and its indexes. We believe that a logarithmic chart is more effective than other types of charts in illustrating changes in value during the early years shown in the chart. The vertical axis, the one that indicates the dollar value of an investment, is constructed with each segment representing a percent change in the value of the investment. In this chart, each segment represents a doubling, or 100% change, in the value of the investment. In other words, the space between $5,000 and $10,000 is the same size as the space between $10,000 and $20,000.

Average Annual Total Returns

As of 12/31/09

Series I Shares
Inception (9/10/01)	0.34	%
5 Years	-2.80
1 Year	48.00
Series II Shares
Inception (9/10/01)	0.11	%
5 Years	-3.02
1 Year	47.74

The performance of the Fund’s Series I and Series II share classes will differ primarily due to different class expenses.

     The performance data quoted represent past performance and cannot guarantee comparable future results; current performance may be lower or higher. Please contact your variable product issuer or financial adviser for the most recent month-end variable product performance. Performance figures reflect Fund expenses, reinvested distributions and changes in net asset value. Investment return and principal value will fluctuate so that you may have a gain or loss when you sell shares.

     The total annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 1.03% and 1.28%, respectively. The expense ratios presented above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

     AIM V.I. Basic Value Fund, a series portfolio of AIM Variable Insurance Funds, is currently offered through insurance companies issuing variable products. You cannot purchase shares of the Fund directly. Performance figures given represent the Fund and are not intended to reflect actual variable product values. They do not reflect sales charges, expenses and fees assessed in connection with a variable product. Sales charges, expenses and fees, which are determined by the variable product issuers, will vary and will lower the total return.

     The most recent month-end performance data at the Fund level, excluding variable product charges, is available on the Invesco Aim automated information line, 866 702 4402. As mentioned above, for the most recent month-end performance including variable product charges, please contact your variable product issuer or financial adviser.

AIM V.I. Basic Value Fund

AIM V.I. Basic Value Fund’s investment objective is long-term growth of capital.

n  Unless otherwise stated, information presented in this report is as of December 31, 2009, and is based on total net assets.

n  Unless otherwise noted, all data provided by Invesco.

Principal risks of investing in the Fund

The Fund may use enhanced investment techniques such as derivatives. The principal risk of derivatives is that the fluctuations in their values may not correlate perfectly with the overall securities markets. Derivatives are subject to counterparty risk — the risk that the other party will not complete the transaction with the Fund.

     Prices of equity securities change in response to many factors, including the historical and prospective earnings of the issuer, the value of its assets, general economic conditions, interest rates, investor perceptions and market liquidity.

     Foreign securities have additional risks, including exchange rate changes, political and economic upheaval, relative lack of information, relatively low market liquidity, and the potential lack of strict financial and accounting controls and standards.

     Leveraging entails risks such as magnifying changes in the value of the portfolio’s securities.

     Since a large percentage of the Fund’s assets may be invested in securities of a limited number of companies, each investment has a greater effect on the Fund’s overall performance, and any change in the value of those securities could significantly affect the value of your investment in the Fund.

     There is no guarantee that the investment techniques and risk analysis used by the Fund’s portfolio managers will produce the desired results.

     The prices of securities held by the Fund may decline in response to market risks.

     The Fund invests in “value” stocks, which can continue to be inexpensive for long periods of time and may never realize their full value.

About indexes used in this report

The S&P 500^® Index is an unmanaged index considered representative of the U.S. stock market.

     The Russell 1000^® Value Index is an unmanaged index considered representative of large-cap value stocks. The Russell 1000 Value Index is a trademark/service mark of the Frank Russell Co. Russell^® is a trademark of the Frank Russell Co.

     The Lipper VUF Large-Cap Value Funds Index is an unmanaged index considered representative of large-cap value variable insurance underlying funds tracked by Lipper.

     The Fund is not managed to track the performance of any particular index, including the indexes defined here, and consequently, the performance of the Fund may deviate significantly from the performance of the indexes.

     A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group reflects fund expenses; performance of a market index does not.

Other information

The Chartered Financial Analyst^® (CFA^®) designation is globally recognized and attests to a charterholder’s success in a rigorous and comprehensive study program in the field of investment management and research analysis.

The returns shown in management’s discussion of Fund performance are based on net asset values calculated for shareholder transactions. Generally accepted accounting principles require adjustments to be made to the net assets of the Fund at period end for financial reporting purposes, and as such, the net asset values for shareholder transactions and the returns based on those net asset values may differ from the net asset values and returns reported in the Financial Highlights. Additionally, the returns and net asset values shown throughout this report are at the Fund level only and do not include variable product issuer charges. If such charges were included, the total returns would be lower.

     Industry classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s.

AIM V.I. Basic Value Fund

Schedule of Investments^(a)

December 31, 2009

	Shares		Value
Common Stocks & Other Equity Interests–97.42%
Advertising–5.38%
Interpublic Group of Cos., Inc. (The)(b)		1,136,842	$	8,389,894
Omnicom Group Inc.		280,235		10,971,200
				19,361,094
Asset Management & Custody Banks–1.74%
State Street Corp.		143,637		6,253,955
Brewers–1.53%
Molson Coors Brewing Co.–Class B		121,937		5,506,675
Casinos & Gaming–1.98%
International Game Technology		379,936		7,131,399
Communications Equipment–2.34%
Nokia Corp.–ADR (Finland)		654,878		8,415,182
Computer Hardware–2.94%
Dell Inc.(b)		737,963		10,597,149
Construction Materials–1.59%
Cemex S.A.B. de C.V.–ADR (Mexico)(b)		485,373		5,737,109
Consumer Finance–4.65%
American Express Co.		284,129		11,512,907
SLM Corp.(b)		463,847		5,227,556
				16,740,463
Data Processing & Outsourced Services–3.77%
Alliance Data Systems Corp.(b)		135,717		8,765,961
Western Union Co.		255,400		4,814,290
				13,580,251
Diversified Capital Markets–1.39%
UBS AG (Switzerland)(b)		323,414		5,016,151
Education Services–0.36%
Apollo Group, Inc.–Class A(b)		21,609		1,309,073
Electronic Manufacturing Services–4.59%
Flextronics International Ltd. (Singapore)(b)		1,004,957		7,346,236
Tyco Electronics Ltd. (Switzerland)		373,813		9,177,109
				16,523,345
General Merchandise Stores–2.52%
Target Corp.		187,832		9,085,434
Home Improvement Retail–1.90%
Home Depot, Inc. (The)		235,978		6,826,844
Hotels, Resorts & Cruise Lines–1.07%
Marriott International, Inc.–Class A		141,147		3,846,256
Household Appliances–1.45%
Whirlpool Corp.		64,729		5,221,041
Human Resource & Employment Services–3.35%
Robert Half International, Inc.		451,487		12,068,248
Industrial Conglomerates–1.94%
Tyco International Ltd.		196,285		7,003,449
Industrial Machinery–4.87%
Illinois Tool Works Inc.		200,439		9,619,068
Ingersoll-Rand PLC (Ireland)		221,225		7,906,581
				17,525,649
Investment Banking & Brokerage–2.14%
Morgan Stanley		259,965		7,694,964
Life Sciences Tools & Services–1.96%
Waters Corp.(b)		114,129		7,071,433
Managed Health Care–6.77%
Aetna Inc.		281,638		8,927,924
UnitedHealth Group Inc.		506,785		15,446,807
				24,374,731
Movies & Entertainment–1.15%
Walt Disney Co. (The)		127,964		4,126,839
Oil & Gas Drilling–0.58%
Transocean Ltd.(b)		25,119		2,079,853
Oil & Gas Equipment & Services–3.46%
Halliburton Co.		202,090		6,080,888
Weatherford International Ltd.(b)		355,410		6,365,393
				12,446,281
Other Diversified Financial Services–6.81%
Bank of America Corp.		766,156		11,538,310
Citigroup Inc.		1,013,903		3,356,019
JPMorgan Chase & Co.		231,199		9,634,062
				24,528,391
Packaged Foods & Meats–1.16%
Unilever N.V. (Netherlands)		128,827		4,195,739
Property & Casualty Insurance–3.48%
XL Capital Ltd.–Class A		683,750		12,533,137
Regional Banks–1.60%
Fifth Third Bancorp		592,404		5,775,939
Research & Consulting Services–1.30%
Dun & Bradstreet Corp. (The)		55,457		4,678,907

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

AIM V.I. Basic Value Fund

	Shares		Value
Semiconductor Equipment–8.01%
ASML Holding N.V. (Netherlands)		563,414	$	19,137,255
KLA-Tencor Corp.		269,072		9,729,644
				28,866,899
Specialized Finance–3.70%
Moody’s Corp.		497,878		13,343,130
Specialty Stores–1.92%
Staples, Inc.		280,750		6,903,642
Systems Software–4.02%
CA, Inc.		217,374		4,882,220
Microsoft Corp.		315,040		9,605,570
				14,487,790
Total Common Stocks & Other Equity Interests (Cost $319,608,514)				350,856,442
Money Market Funds–3.19%
Liquid Assets Portfolio–Institutional Class(c)		5,754,937		5,754,937
Premier Portfolio–Institutional Class(c)		5,754,937		5,754,937
Total Money Market Funds (Cost $11,509,874)				11,509,874
TOTAL INVESTMENTS–100.61% (Cost $331,118,388)				362,366,316
OTHER ASSETS LESS LIABILITIES–(0.61)%				(2,213,069	)
NET ASSETS–100.00%			$	360,153,247

Investment Abbreviations:

ADR – American Depositary Receipt

Notes to Schedule of Investments:

(a)	Industry and/or sector classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s.
(b)	Non-income producing security.
(c)	The money market fund and the Fund are affiliated by having the same investment adviser.

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

AIM V.I. Basic Value Fund

Statement of Assets and Liabilities

December 31, 2009

Assets:
Investments, at value (Cost $319,608,514)	$	350,856,442
Investments in affiliated money market funds, at value and cost		11,509,874
Total investments, at value (Cost $331,118,388)		362,366,316
Receivables for:
Fund shares sold		35,952
Dividends		202,956
Investment for trustee deferred compensation and retirement plans		18,830
Total assets		362,624,054
Liabilities:
Payables for:
Investments purchased		1,575,219
Fund shares reacquired		374,169
Amount due custodian		106,286
Accrued fees to affiliates		301,399
Accrued other operating expenses		38,146
Trustee deferred compensation and retirement plans		75,588
Total liabilities		2,470,807
Net assets applicable to shares outstanding	$	360,153,247
Net assets consist of:
Shares of beneficial interest	$	412,789,540
Undistributed net investment income		1,482,421
Undistributed net realized gain (loss)		(85,366,642	)
Unrealized appreciation		31,247,928
	$	360,153,247
Net Assets:
Series I	$	226,281,592
Series II	$	133,871,655
Shares outstanding, $0.001 par value per share, unlimited number of shares authorized:
Series I		37,811,853
Series II		22,505,992
Series I:
Net asset value per share	$	5.98
Series II:
Net asset value per share	$	5.95

Statement of Operations

For the year ended December 31, 2009

Investment income:
Dividends (net of foreign withholding taxes of $138,628)	$	4,753,103
Dividends from affiliated money market funds (includes securities lending income of $171,900)		227,978
Total investment income		4,981,081
Expenses:
Advisory fees		2,175,457
Administrative services fees		835,778
Custodian fees		15,058
Distribution fees — Series II		327,562
Transfer agent fees		32,761
Trustees’ and officers’ fees and benefits		29,148
Other		39,741
Total expenses		3,455,505
Less: Fees waived		(16,169	)
Net expenses		3,439,336
Net investment income		1,541,745
Realized and unrealized gain (loss) from:
Net realized gain (loss) from:
Investment securities (includes net gains (losses) from securities sold to affiliates of $(2,099))		(33,151,807	)
Foreign currencies		29,945
		(33,121,862	)
Change in net unrealized appreciation of investment securities		158,453,793
Net realized and unrealized gain		125,331,931
Net increase in net assets resulting from operations	$	126,873,676

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

AIM V.I. Basic Value Fund

Statement of Changes in Net Assets

For the years ended December 31, 2009 and 2008

	2009			2008
Operations:
Net investment income	$	1,541,745		$	4,405,070
Net realized gain (loss)		(33,121,862	)		(49,252,859	)
Change in net unrealized appreciation (depreciation)		158,453,793			(280,398,576	)
Net increase (decrease) in net assets resulting from operations		126,873,676			(325,246,365	)
Distributions to shareholders from net investment income:
Series I		(3,201,037	)		(2,317,576	)
Series II		(1,368,809	)		(1,044,721	)
Total distributions from net investment income		(4,569,846	)		(3,362,297	)
Distributions to shareholders from net realized gains:
Series I		—			(50,134,173	)
Series II		—			(40,634,468	)
Total distributions from net realized gains		—			(90,768,641	)
Share transactions-net:
Series I		(1,497,408	)		(7,248,339	)
Series II		(45,220,456	)		7,590,709
Net increase (decrease) in net assets resulting from share transactions		(46,717,864	)		342,370
Net increase (decrease) in net assets		75,585,966			(419,034,933	)
Net assets:
Beginning of year		284,567,281			703,602,214
End of year (includes undistributed net investment income of $1,482,421 and $4,480,578, respectively)	$	360,153,247		$	284,567,281

Notes to Financial Statements

December 31, 2009

NOTE 1—Significant Accounting Policies

AIM V.I. Basic Value Fund (the “Fund”) is a series portfolio of AIM Variable Insurance Funds (the “Trust”). The Trust is a Delaware statutory trust registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end series management investment company consisting of twenty-one separate portfolios, (each constituting a “Fund”). The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Matters affecting each Fund or class will be voted on exclusively by the shareholders of such Fund or class. Current Securities and Exchange Commission (“SEC”) guidance, however, requires participating insurance companies offering separate accounts to vote shares proportionally in accordance with the instructions of the contract owners whose investments are funded by shares of each Fund or class.

  The Fund’s investment objective is long-term growth of capital.

  The Fund currently offers two classes of shares, Series I and Series II, both of which are offered to insurance company separate accounts funding variable annuity contracts and variable life insurance policies (“variable products”).

  The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements.

A.

Security Valuations — Securities, including restricted securities, are valued according to the following policy.

A security listed or traded on an exchange (except convertible bonds) is valued at its last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales or official closing price on a particular day, the security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based on prices furnished by independent pricing services or market makers. When such securities are valued by an independent pricing service they may be considered fair valued. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean between the last bid and ask prices from the exchange on which they are principally traded. Options not listed on an exchange are valued by an independent source at the mean between the last bid and ask prices. For purposes of determining net asset value per share, futures and option contracts generally are valued 15 minutes after the close of the customary trading session of the New York Stock Exchange (“NYSE”).

AIM V.I. Basic Value Fund

	Investments in open-end and closed-end registered investment companies that do not trade on an exchange are valued at the end of day net asset value per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded.
	Debt obligations (including convertible bonds) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution-size trading in similar groups of securities, developments related to specific securities, dividend rate, yield, quality, type of issue, coupon rate, maturity, individual trading characteristics and other market data. Short-term obligations, including commercial paper, having 60 days or less to maturity are recorded at amortized cost which approximates value. Debt securities are subject to interest rate and credit risks. In addition, all debt securities involve some risk of default with respect to interest and/or principal payments.
	Foreign securities (including foreign exchange contracts) are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the NYSE. If market quotations are available and reliable for foreign exchange traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that are significant and make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economical upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
	Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities and Corporate Loans. The mean between the last bid and asked prices may be used to value debt obligations other than Corporate Loans.
	Securities for which market quotations are not readily available or are unreliable are valued at fair value as determined in good faith by or under the supervision of the Trust’s officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a security’s fair value.
	Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
B.	Securities Transactions and Investment Income — Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income is recorded on the accrual basis from settlement date. Dividend income is recorded on the ex-dividend date.
	The Fund may periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain/loss for investments no longer held and as unrealized gain/loss for investments still held.
	Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the realized and unrealized net gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the Fund’s net asset value and, accordingly, they reduce the Fund’s total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in the Statement of Operations and Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the adviser.
	The Fund allocates income and realized and unrealized capital gains and losses to a class based on the relative net assets of each class.
C.	Country Determination — For the purposes of making investment selection decisions and presentation in the Schedule of Investments, the investment adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuer’s securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted.
D.	Distributions — Distributions from income and net realized capital gain, if any, are generally paid to separate accounts of participating insurance companies annually and recorded on ex-dividend date.
E.	Federal Income Taxes — The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code necessary to qualify as a regulated investment company and to distribute substantially all of the Fund’s taxable earnings to shareholders. As such, the Fund will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements.

AIM V.I. Basic Value Fund

	The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.
F.	Expenses — Fees provided for under the Rule 12b-1 plan of a particular class of the Fund and which are directly attributable to that class are charged to the operations of such class. All other expenses are allocated among the classes based on relative net assets.
G.	Accounting Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print, which is generally 45 days from the period-end date.
H.	Indemnifications — Under the Trust’s organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Fund’s servicing agreements, that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote.
I.	Securities Lending — The Fund may lend portfolio securities having a market value up to one-third of the Fund’s total assets. Such loans are secured by collateral equal to no less than the market value of the loaned securities determined daily by the securities lending provider. Such collateral will be cash or debt securities issued or guaranteed by the U.S. Government or any of its sponsored agencies. Cash collateral received in connection with these loans is invested in short-term money market instruments or affiliated money market funds and is shown as such on the Schedule of Investments. It is the Fund’s policy to obtain additional collateral from or return excess collateral to the borrower by the end of the next business day, following the valuation date of the securities loaned. Therefore, the value of the collateral held may be temporarily less than the value of the securities on loan. Lending securities entails a risk of loss to the Fund if and to the extent that the market value of the securities loaned were to increase and the borrower did not increase the collateral accordingly, and the borrower fails to return the securities. Upon the failure of the borrower to return the securities, collateral may be liquidated and the securities may be purchased on the open market to replace the loaned securities. The Fund could experience delays and costs in gaining access to the collateral. The Fund bears the risk of any deficiency in the amount of the collateral available for return to the borrower due to any loss on the collateral invested. Dividends received on cash collateral investments for securities lending transactions, which are net of compensation to counterparties, is included in Dividends from affiliates on the Statement of Operations. The aggregate value of securities out on loan is shown as a footnote on the Statement of Assets and Liabilities, if any.
J.	Foreign Currency Translations — Foreign currency is valued at the close of the NYSE based on quotations posted by banks and major currency dealers. Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at date of valuation. Purchases and sales of portfolio securities (net of foreign taxes withheld on disposition) and income items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. The Fund does not separately account for the portion of the results of operations resulting from changes in foreign exchange rates on investments and the fluctuations arising from changes in market prices of securities held. The combined results of changes in foreign exchange rates and the fluctuation of market prices on investments (net of estimated foreign tax withholding) are included with the net realized and unrealized gain or loss from investments in the Statement of Operations. Reported net realized foreign currency gains or losses arise from (i) sales of foreign currencies, (ii) currency gains or losses realized between the trade and settlement dates on securities transactions, and (iii) the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign currency gains and losses arise from changes in the fair values of assets and liabilities, other than investments in securities at fiscal period end, resulting from changes in exchange rates.
	The Fund may invest in foreign securities which may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable.
K.	Foreign Currency Contracts — The Fund may enter into foreign currency contracts to manage or minimize currency or exchange rate risk. The Fund may also enter into foreign currency contracts for the purchase or sale of a security denominated in a foreign currency in order to “lock in” the U.S. dollar price of that security. A foreign currency contract is an obligation to purchase or sell a specific currency for an agreed-upon price at a future date. The use of foreign currency contracts does not eliminate fluctuations in the price of the underlying securities the Fund owns or intends to acquire but establishes a rate of exchange in advance. Fluctuations in the value of these contracts are measured by the difference in the contract date and reporting date exchange rates and are recorded as unrealized appreciation (depreciation) until the contracts are closed. When the contracts are closed, realized gains (losses) are recorded. Realized and unrealized gains (losses) on the contracts are included in the Statement of Operations. The primary risks associated with foreign currency contracts include failure of the counterparty to meet the terms of the contract and the value of the foreign currency changing unfavorably. These risks may be in excess of the amounts reflected in the Statement of Assets and Liabilities.

AIM V.I. Basic Value Fund

NOTE 2—Advisory Fees and Other Fees Paid to Affiliates

The Trust has entered into a master investment advisory agreement with Invesco Advisers, Inc. (the “Adviser” or “Invesco”). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Adviser based on the annual rate of the Fund’s average daily net assets as follows:

Average Net Assets	Rate
First $250 million		0	.695%
Next $250 million		0	.67%
Next $500 million		0	.645%
Next $1.5 billion		0	.62%
Next $2.5 billion		0	.595%
Next $2.5 billion		0	.57%
Next $2.5 billion		0	.545%
Over $10 billion		0	.52%

  Under the terms of a master sub-advisory agreement approved by shareholders of the Funds between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Trimark Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Funds, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide discretionary investment management services to each Fund based on the percentage of assets allocated to such Sub-Adviser(s).

  On December 31, 2009, Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc., Invesco Private Asset Management, Inc. and Invesco Global Asset Management (N.A.), Inc. merged into Invesco Institutional (N.A.), Inc. and the consolidated adviser firm was renamed Invesco Advisers, Inc.

  The Adviser has contractually agreed to waive advisory fees and/or reimburse expenses of all shares to the extent necessary to limit total annual fund operating expenses after fee waiver (excluding certain items discussed below) of Series I shares to 1.30% and Series II shares to 1.45% of average daily net assets, through at least April 30, 2011. In determining the Adviser’s obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the total annual fund operating expenses after fee waiver to exceed the numbers reflected above: (1) interest; (2) taxes; (3) dividend expense on short sales; (4) extraordinary items or non-routine items; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. The Board of Trustees or Invesco may terminate the fee waiver arrangement at any time. The Adviser did not waive fees and/or reimburse expenses during the period under this expense limitation.

  Further, the Adviser has contractually agreed, through at least June 30, 2010, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash (excluding investments of cash collateral from securities lending) in such affiliated money market funds.

  For the year ended December 31, 2009, the Adviser waived advisory fees of $16,169.

  At the request of the Trustees of the Trust, Invesco Ltd. Agreed to reimburse expenses incurred by the Fund in connection with market timing matters in the AIM Funds, which may include legal, audit, shareholder reporting, communications and trustee expenses. For the year ended December 31, 2009, Invesco Ltd. did not reimburse any expenses.

  The Trust has entered into a master administrative services agreement with Invesco pursuant to which the Fund has agreed to pay Invesco a fee for costs incurred in providing accounting services and fund administrative services to the Fund and to reimburse Invesco for administrative services fees paid to insurance companies that have agreed to provide services to the participants of separate accounts. These administrative services provided by the insurance companies may include, among other things: the printing of prospectuses, financial reports and proxy statements and the delivery of the same to existing participants; the maintenance of master accounts; the facilitation of purchases and redemptions requested by the participants; and the servicing of participants’ accounts. Pursuant to such agreement, for the year ended December 31, 2009, Invesco was paid $82,535 for accounting and fund administrative services and reimbursed $753,243 for services provided by insurance companies.

  The Trust has entered into a transfer agency and service agreement with Invesco Aim Investment Services, Inc. (“IAIS”) pursuant to which the Fund has agreed to pay IAIS a fee for providing transfer agency and shareholder services to the Fund and reimburse IAIS for certain expenses incurred by IAIS in the course of providing such services. For the year ended December 31, 2009, expenses incurred under the agreement are shown in the Statement of Operations as transfer agent fees.

  The Trust has entered into a master distribution agreement with Invesco Aim Distributors, Inc. (“IADI”) to serve as the distributor for the Fund. The Trust has adopted a plan pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund’s Series II shares (the “Plan”). The Fund, pursuant to the Plan, pays IADI compensation at the annual rate of 0.25% of the Fund’s average daily net assets of Series II shares. Of the Plan payments, up to 0.25% of the average daily net assets of the Series II shares may be paid to insurance companies who furnish continuing personal shareholder services to customers who purchase and own Series II shares of the Fund. For the year ended December 31, 2009, expenses incurred under the Plan are detailed in the Statement of Operations as distribution fees.

  Certain officers and trustees of the Trust are officers and directors of Invesco, IAIS and/or IADI.

AIM V.I. Basic Value Fund

NOTE 3—Additional Valuation Information

Generally Accepted Accounting Principles (“GAAP”) defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3) generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment’s assigned level:

Level 1 —	Prices are determined using quoted prices in an active market for identical assets.
Level 2 —	Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk and others.
Level 3 —	Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information.

  The following is a summary of the tiered valuation input levels, as of December 31, 2009. The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.

	Level 1		Level 2		Level 3		Total
Equity Securities	$	343,229,060	$	19,137,256	$	—	$	362,366,316

NOTE 4—Security Transactions with Affiliated Funds

The Fund is permitted to purchase or sell securities from or to certain other AIM Funds under specified conditions outlined in procedures adopted by the Board of Trustees of the Trust. The procedures have been designed to ensure that any purchase or sale of securities by the Fund from or to another fund or portfolio that is or could be considered an affiliate by virtue of having a common investment adviser (or affiliated investment advisers), common Trustees and/or common officers complies with Rule 17a-7 of the 1940 Act. Further, as defined under the procedures, each transaction is effected at the current market price. Pursuant to these procedures, for the year ended December 31, 2009, the Fund engaged in securities purchases of $194,147 and securities sales of $956,181, which resulted in net realized gains (losses) of $(2,099).

NOTE 5—Trustees’ and Officers’ Fees and Benefits

“Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and “Trustees’ and Officers’ Fees and Benefits” also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various AIM Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees are eligible to participate in a retirement plan that provides for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former Trustees who also participate in a retirement plan and receive benefits under such plan. “Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund.

  During the year ended December 31, 2009, the Fund paid legal fees of $3,472 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A member of that firm is a Trustee of the Trust.

NOTE 6—Cash Balances

The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with The State Street Bank and Trust Company, the custodian bank. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (i) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (ii) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.

NOTE 7—Distributions to Shareholders and Tax Components of Net Assets

Tax Character of Distributions to Shareholders Paid During the Years Ended December 31, 2009 and 2008:

	2009		2008
Ordinary income	$	4,569,846	$	12,265,002
Long-term capital gain		—		81,865,936
Total distributions	$	4,569,846	$	94,130,938

AIM V.I. Basic Value Fund

Tax Components of Net Assets at Period-End:

	2009
Undistributed ordinary income	$	1,565,754
Net unrealized appreciation — investments		20,464,257
Temporary book/tax differences		(77,030	)
Post-October deferrals		(1,635,168	)
Capital loss carryforward		(72,954,106	)
Shares of beneficial interest		412,789,540
Total net assets	$	360,153,247

  The difference between book-basis and tax-basis unrealized appreciation (depreciation) is due to differences in the timing of recognition of gains and losses on investments for tax and book purposes. The Fund’s net unrealized appreciation difference is attributable primarily to wash sales.

  The temporary book/tax differences are a result of timing differences between book and tax recognition of income and/or expenses. The Fund’s temporary book/tax differences are the result of the trustee deferral of compensation and retirement plan benefits.

  Capital loss carryforward is calculated and reported as of a specific date. Results of transactions and other activity after that date may affect the amount of capital loss carryforward actually available for the Fund to utilize. The ability to utilize capital loss carryforward in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.

  The Fund has a capital loss carryforward as of December 31, 2009 which expires as follows:

	Capital Loss
Expiration	Carryforward*
December 31, 2016	$	40,544,207
December 31, 2017		32,409,899
Total capital loss carryforward	$	72,954,106

*  Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code.

NOTE 8—Investment Securities

The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the year ended December 31, 2009 was $69,432,845 and $116,215,297, respectively. Cost of investments on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed Federal income tax reporting period-end.

Unrealized Appreciation (Depreciation) of Investment Securities on a Tax Basis
Aggregate unrealized appreciation of investment securities	$	57,919,028
Aggregate unrealized (depreciation) of investment securities		(37,454,771	)
Net unrealized appreciation of investment securities	$	20,464,257
Cost of investments for tax purposes is $341,902,059.

NOTE 9—Reclassification of Permanent Differences

Primarily as a result of differing book/tax treatment of foreign currency transactions, on December 31, 2009, undistributed net investment income was increased by $29,944 and undistributed net realized gain (loss) was decreased by $29,944. This reclassification had no effect on the net assets of the Fund.

AIM V.I. Basic Value Fund

NOTE 10—Share Information

	Summary of Share Activity
	Year ended						Year ended
	December 31, 2009(a)						December 31, 2008
	Shares			Amount			Shares			Amount
Sold:
Series I		7,249,578		$	36,341,584			1,778,569		$	13,914,876
Series II		6,780,957			32,543,999			2,620,573			20,597,994
Issued as reinvestment of dividends:
Series I		550,953			3,201,037			12,700,181			52,451,749
Series II		236,818			1,368,809			10,165,656			41,679,189
Reacquired:
Series I		(8,478,204	)		(41,040,029	)		(7,399,923	)		(73,614,964	)
Series II		(15,711,336	)		(79,133,264	)		(5,649,845	)		(54,686,474	)
Net increase (decrease) in share activity		(9,371,234	)	$	(46,717,864	)		14,215,211		$	342,370

^(a) There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 65% of the outstanding shares of the Fund. The Fund and the Fund’s principal underwriter or adviser, are parties to participation agreements with these entities whereby these entities sell units of interest in separate accounts funding variable products that are invested in the Fund. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as, securities brokerage, third party record keeping and account servicing and administrative services. The Trust has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially.

NOTE 11—Financial Highlights

The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.

																												Ratio of			Ratio of
																												expenses			expenses
						Net gains																						to average			to average net			Ratio of net
	Net asset					(losses) on						Dividends			Distributions													net assets			assets without			investment
	value,		Net			securities (both			Total from			from net			from net						Net asset					Net assets,		with fee waivers			fee waivers			income
	beginning		investment			realized and			investment			investment			realized			Total			value, end		Total			end of period		and/or expenses			and/or expenses			to average			Portfolio
	of period		income			unrealized)			operations			income			gains			Distributions			of period		Return(a)			(000s omitted)		absorbed			absorbed			net assets			turnover(b)
Series I
Year ended 12/31/09	$	4.10	$	0.03	(c)	$	1.94		$	1.97		$	(0.09	)	$	—		$	(0.09	)	$	5.98		48.00	%	$	226,282		0.98	%(d)		0.99	%(d)		0.59	%(d)		23	%
Year ended 12/31/08		12.73		0.10	(c)		(6.68	)		(6.58	)		(0.09	)		(1.96	)		(2.05	)		4.10		(51.77	)		157,693		1.03			1.03			0.99			58
Year ended 12/31/07		13.35		0.07	(c)		0.17			0.24			(0.08	)		(0.78	)		(0.86	)		12.73		1.62			399,974		0.96			0.99			0.52			25
Year ended 12/31/06		12.37		0.07	(c)		1.54			1.61			(0.05	)		(0.58	)		(0.63	)		13.35		13.12			489,352		0.97			1.02			0.54			15
Year ended 12/31/05		11.84		0.05			0.63			0.68			(0.01	)		(0.14	)		(0.15	)		12.37		5.74			487,332		0.97			1.02			0.38			16
Series II
Year ended 12/31/09		4.07		0.02	(c)		1.92			1.94			(0.06	)		—			(0.06	)		5.95		47.74			133,872		1.23	(d)		1.24	(d)		0.34	(d)		23
Year ended 12/31/08		12.62		0.07	(c)		(6.61	)		(6.54	)		(0.05	)		(1.96	)		(2.01	)		4.07		(51.90	)		126,874		1.28			1.28			0.74			58
Year ended 12/31/07		13.24		0.04	(c)		0.16			0.20			(0.04	)		(0.78	)		(0.82	)		12.62		1.36			303,628		1.21			1.24			0.27			25
Year ended 12/31/06		12.26		0.04	(c)		1.54			1.58			(0.02	)		(0.58	)		(0.60	)		13.24		12.94			339,457		1.22			1.27			0.29			15
Year ended 12/31/05		11.76		0.02			0.62			0.64			0.00			(0.14	)		(0.14	)		12.26		5.43			363,393		1.22			1.27			0.13			16

(a)	Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Total returns do not reflect charges assessed in connection with a variable product, which if included would reduce total returns.
(b)	Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable.
(c)	Calculated using average shares outstanding.
(d)	Ratios are based on average daily net assets (000’s omitted) of $184,342 and $131,025 for Series I and Series II shares, respectively.

AIM V.I. Basic Value Fund

Report of Independent Registered Public Accounting Firm

To the Board of Trustees of AIM Variable Insurance Funds

and Shareholders of AIM V.I. Basic Value Fund:

In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of AIM V.I. Basic Value Fund (one of the funds constituting AIM Variable Insurance Funds, hereafter referred to as the “Fund”) at December 31, 2009, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for the each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at December 31, 2009 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.

PRICEWATERHOUSECOOPERS LLP

February 10, 2010

Houston, Texas

AIM V.I. Basic Value Fund

Calculating your ongoing Fund expenses

Example

As a shareholder of the Fund, you incur ongoing costs, including management fees; distribution and/or service fees (12b-1); and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period July 1, 2009, through December 31, 2009.

  The actual and hypothetical expenses in the examples below do not represent the effect of any fees or other expenses assessed in connection with a variable product; if they did, the expenses shown would be higher while the ending account values shown would be lower.

Actual expenses

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

Hypothetical example for comparison purposes

The table below also provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return.

  The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

  Please note that the expenses shown in the table are meant to highlight your ongoing costs. Therefore, the hypothetical information is useful in comparing ongoing costs, and will not help you determine the relative total costs of owning different funds.

							HYPOTHETICAL
							(5% annual return before
			ACTUAL				expenses)
	Beginning		Ending		Expenses		Ending		Expenses		Annualized
	Account Value		Account Value		Paid During		Account Value		Paid During		Expense
Class	(07/01/09)		(12/31/09)1		Period2		(12/31/09)		Period2		Ratio
Series I	$	1,000.00	$	1,269.50	$	5.61	$	1,020.27	$	4.99		0.98	%
Series II		1,000.00		1,271.20		7.04		1,019.00		6.26		1.23

1	The actual ending account value is based on the actual total return of the Fund for the period July 1, 2009 through December 31, 2009, after actual expenses and will differ from the hypothetical ending account value which is based on the Fund’s expense ratio and a hypothetical annual return of 5% before expenses.
2	Expenses are equal to the Fund’s annualized expense ratio as indicated above multiplied by the average account value over the period, multiplied by 184/365 to reflect the most recent fiscal half year.

AIM V.I. Basic Value Fund

Tax Information

Form 1099-DIV, Form 1042-S and other year-end tax information provide shareholders with actual calendar year amounts that should be included in their tax returns. Shareholders should consult their tax advisors.

  The following distribution information is being provided as required by the Internal Revenue Code or to meet a specific state’s requirement.

  The Fund designates the following amounts or, if subsequently determined to be different, the maximum amount allowable for its fiscal year ended December 31, 2009:

Federal and State Income Tax
Corporate Dividends Received Deduction*	100.00%

*  The above percentage is based on ordinary income dividends paid to shareholders during the Fund’s fiscal year.

AIM V.I. Basic Value Fund

Trustees and Officers

The address of each trustee and officer of AIM Variable Insurance Funds (the “Trust”), is 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173. Each trustee oversees 105 portfolios in the AIM Funds complex. The trustees serve for the life of the Trust, subject to their earlier death, incapacitation, resignation, retirement or removal as more specifically provided in the Trust’s organizational documents. Each officer serves for a one year term or until their successors are elected and qualified. Column two below includes length of time served with predecessor entities, if any.

	Trustee and/
Name, Year of Birth and	or Officer		Principal Occupation(s)	Other Directorship(s)
Position(s) Held with the Trust	Since		During Past 5 Years	Held by Trustee
Interested Persons
Martin L. Flanagan1 — 1960 Trustee		2007	Executive Director, Chief Executive Officer and President, Invesco Ltd. (ultimate parent of Invesco Aim and a global investment management firm); Adviser to the Board, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Trustee, The AIM Family of Funds®; Board of Governors, Investment Company Institute; and Member of Executive Board, SMU Cox School of Business Formerly: Chairman, Invesco Aim Advisors, Inc. (registered investment adviser); Director, Chairman, Chief Executive Officer and President, IVZ Inc. (holding company), INVESCO Group Services, Inc. (service provider) and Invesco North American Holdings, Inc. (holding company); Director, Chief Executive Officer and President, Invesco Holding Company Limited (parent of Invesco Aim and a global investment management firm); Director, Invesco Ltd.; Chairman and Vice Chairman, Investment Company Institute	None
Philip A. Taylor2 — 1954 Trustee, President and Principal Executive Officer		2006	Head of North American Retail and Senior Managing Director, Invesco Ltd.; Director, Co-Chairman, Co-President and Co- Chief Executive Officer, Invesco Advisers, inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Director, Chief Executive Officer and President, Invesco Aim Advisors, Inc. and 1371 Preferred Inc. (holding company); Director, Chairman, Chief Executive Officer and President, Invesco Aim Management Group, Inc. (financial services holding company); Director, Co-Chairman, Co-President and Co-Chief Executive Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Director and President, INVESCO Funds Group, Inc. (registered investment adviser and registered transfer agent) and AIM GP Canada Inc. (general partner for limited partnerships); Director, Invesco Aim Distributors, Inc. (registered broker dealer); Director and Chairman, Invesco Aim Investment Services, Inc. (registered transfer agent) and INVESCO Distributors, Inc. (registered broker dealer); Director, President and Chairman, INVESCO Inc. (holding company) and Invesco Canada Holdings Inc. (holding company); Chief Executive Officer, AIM Trimark Corporate Class Inc. (corporate mutual fund company) and AIM Trimark Canada Fund Inc. (corporate mutual fund company); Director and Chief Executive Officer, Invesco Trimark Ltd./Invesco Trimark Ltèe (registered investment adviser and registered transfer agent) and Invesco Trimark Dealer Inc. (registered broker dealer); Trustee, President and Principal Executive Officer, The AIM Family of Funds® (other than AIM Treasurer’s Series Trust and Short-Term Investments Trust); Trustee and Executive Vice President, The AIM Family of Funds® (AIM Treasurer’s Series Trust and Short-Term Investments Trust only); and Manager, Invesco PowerShares Capital Management LLC Formerly: Manager, Invesco PowerShares Capital Management LLC; Director, Chief Executive Officer and President, Invesco Aim Advisors, Inc.; Director, Chairman, Chief Executive Officer and President, Invesco Aim Capital Management, Inc.; President, Invesco Trimark Dealer Inc. and Invesco Trimark Ltd./Invesco Trimark Ltèe; Director and President, AIM Trimark Corporate Class Inc. and AIM Trimark Canada Fund Inc.; Senior Managing Director, Invesco Holding Company Limited; Trustee and Executive Vice President, Tax-Free Investments Trust; Director and Chairman, Fund Management Company (former registered broker dealer); President and Principal Executive Officer, The AIM Family of Funds® (AIM Treasurer’s Series Trust, Short-Term Investments Trust and Tax-Free Investments Trust only); President, AIM Trimark Global Fund Inc. and AIM Trimark Canada Fund Inc.	None
Independent Trustees
Bruce L. Crockett — 1944 Trustee and Chair		1993	Chairman, Crockett Technology Associates (technology consulting company)	ACE Limited (insurance company); Captaris, Inc. (unified messaging provider); and Investment Company Institute
Bob R. Baker — 1936 Trustee		2004	Retired	None
Frank S. Bayley — 1939 Trustee		2001	Retired Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios)	None
James T. Bunch — 1942 Trustee		2004	Founder, Green, Manning & Bunch Ltd., (investment banking firm)	Board of Governors, Western Golf Association/Evans Scholars Foundation and Executive Committee, United States Golf Association
Albert R. Dowden — 1941 Trustee		2000	Director of a number of public and private business corporations, including the Boss Group, Ltd. (private investment and management); Reich & Tang Funds (registered investment company); and Homeowners of America Holding Corporation/Homeowners of America Insurance Company (property casualty company) Formerly: Director, Continental Energy Services, LLC (oil and gas pipeline service); Director, CompuDyne Corporation (provider of product and services to the public security market) and Director, Annuity and Life Re (Holdings), Ltd. (reinsurance company); Director, President and Chief Executive Officer, Volvo Group North America, Inc.; Senior Vice President, AB Volvo; Director of various public and private corporations	Board of Nature’s Sunshine Products, Inc.
Jack M. Fields — 1952 Trustee		1997	Chief Executive Officer, Twenty First Century Group, Inc. (government affairs company); and Owner and Chief Executive Officer, Dos Angelos Ranch, L.P. (cattle, hunting, corporate entertainment), Discovery Global Education Fund (non-profit) and Cross Timbers Quail Research Ranch (non-profit) Formerly: Chief Executive Officer, Texana Timber LP (sustainable forestry company)	Administaff
Carl Frischling — 1937 Trustee		1993	Partner, law firm of Kramer Levin Naftalis and Frankel LLP	Director, Reich & Tang Funds (16 portfolios)
Prema Mathai-Davis — 1950 Trustee		1998	Retired	None
Lewis F. Pennock — 1942 Trustee		1993	Partner, law firm of Pennock & Cooper	None
Larry Soll — 1942 Trustee		2004	Retired	None
Raymond Stickel, Jr. — 1944 Trustee		2005	Retired Formerly: Director, Mainstay VP Series Funds, Inc. (25 portfolios)	None

1	Mr. Flanagan is considered an interested person of the Trust because he is an officer of the adviser to the Trust, and an officer and a director of Invesco Ltd., ultimate parent of the adviser to the Trust.
2	Mr. Taylor is considered an interested person of the Trust because he is an officer and a director of the adviser to, and a director of the principal underwriter of, the Trust.

T-1

Trustees and Officers — (continued)

Name, Year of Birth and	Trustee and/
Position(s) Held with the	or Officer		Principal Occupation(s)	Other Directorship(s)
Trust	Since		During Past 5 Years	Held by Trustee
Other Officers
Russell C. Burk — 1958 Senior Vice President and Senior Officer		2005	Senior Vice President and Senior Officer of The AIM Family of Funds®	N/A
John M. Zerr — 1962 Senior Vice President, Chief Legal Officer and Secretary		2006	Director, Senior Vice President, Secretary and General Counsel, Invesco Aim Management Group, Inc., Senior Vice President, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Director, Senior Vice President and Secretary, Invesco Aim Distributors, Inc.; Director, Vice President and Secretary, Invesco Aim Investment Services, Inc. and INVESCO Distributors, Inc.; Director and Vice President, INVESCO Funds Group, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The AIM Family of Funds®; and Manager, Invesco PowerShares Capital Management LLC Formerly: Director, Senior Vice President, General Counsel and Secretary, Invesco Aim Advisors, Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco Aim Capital Management, Inc.; Chief Operating Officer and General Counsel, Liberty Ridge Capital, Inc. (an investment adviser); Vice President and Secretary, PBHG Funds (an investment company) and PBHG Insurance Series Fund (an investment company); Chief Operating Officer, General Counsel and Secretary, Old Mutual Investment Partners (a broker-dealer); General Counsel and Secretary, Old Mutual Fund Services (an administrator) and Old Mutual Shareholder Services (a shareholder servicing center); Executive Vice President, General Counsel and Secretary, Old Mutual Capital, Inc. (an investment adviser); and Vice President and Secretary, Old Mutual Advisors Funds (an investment company)	N/A
Lisa O. Brinkley — 1959 Vice President		2004	Global Compliance Director, Invesco Ltd.; Chief Compliance Officer, Invesco Aim Distributors, Inc. and Invesco Aim Investment Services, Inc.; and Vice President, The AIM Family of Funds® Formerly: Senior Vice President, Invesco Aim Management Group, Inc.; Senior Vice President and Chief Compliance Officer, Invesco Aim Advisors, Inc. and The AIM Family of Funds®; Vice President and Chief Compliance Officer, Invesco Aim Capital Management, Inc. and Invesco Aim Distributors, Inc.; Vice President, Invesco Aim Investment Services, Inc. and Fund Management Company	N/A
Kevin M. Carome — 1956 Vice President		2003	General Counsel, Secretary and Senior Managing Director, Invesco Ltd.; Director, Invesco Holding Company Limited and INVESCO Funds Group, Inc.; Director and Executive Vice President, IVZ, Inc., Invesco Group Services, Inc., Invesco North American Holdings, Inc. and Invesco Investments (Bermuda) Ltd.; Director and Secretary, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); and Vice President, The AIM Family of Funds® Formerly: Senior Managing Director and Secretary, Invesco North American Holdings, Inc.; Vice President and Secretary, IVZ, Inc. and Invesco Group Services, Inc.; Senior Managing Director and Secretary, Invesco Holding Company Limited; Director, Senior Vice President, Secretary and General Counsel, Invesco Aim Management Group, Inc. and Invesco Aim Advisors, Inc.; Senior Vice President, Invesco Aim Distributors, Inc.; Director, General Counsel and Vice President, Fund Management Company; Vice President, Invesco Aim Capital Management, Inc. and Invesco Aim Investment Services, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The AIM Family of Funds®; Director and Vice President, INVESCO Distributors, Inc.; and Chief Executive Officer and President, INVESCO Funds Group, Inc.	N/A
Sheri Morris — 1964 Vice President, Treasurer and Principal Financial Officer		1999	Vice President, Treasurer and Principal Financial Officer, The AIM Family of Funds®; and Vice President, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.) Formerly: Vice President, Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.; Assistant Vice President and Assistant Treasurer, The AIM Family of Funds® and Assistant Vice President, Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A
Karen Dunn Kelley — 1960 Vice President		1993	Head of Invesco’s World Wide Fixed Income and Cash Management Group; Senior Vice President, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Executive Vice President, Invesco Aim Distributors, Inc.; Senior Vice President, Invesco Aim Management Group, Inc.; and Director, Invesco Mortgage Capital Inc.; Vice President, The AIM Family of Funds® (other than AIM Treasurer’s Series Trust and Short-Term Investments Trust); and President and Principal Executive Officer, The AIM Family of Funds® (AIM Treasurer’s Series Trust and Short-Term Investments Trust only) Formerly: Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Director of Cash Management and Senior Vice President, Invesco Aim Advisors, Inc. and Invesco Aim Capital Management, Inc.; President and Principal Executive Officer, Tax-Free Investments Trust; Director and President, Fund Management Company; Chief Cash Management Officer, Director of Cash Management, Senior Vice President, and Managing Director, Invesco Aim Capital Management, Inc.; Director of Cash Management, Senior Vice President, and Vice President, Invesco Aim Advisors, Inc. and The AIM Family of Funds® (AIM Treasurer’s Series Trust, Short-Term Investments Trust and Tax-Free Investments Trust only)	N/A
Lance A. Rejsek — 1967 Anti-Money Laundering Compliance Officer		2005	Anti-Money Laundering Compliance Officer, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Invesco Aim Distributors, Inc., Invesco Aim Investment Services, Inc., and The AIM Family of Funds® Formerly: Anti-Money Laundering Compliance Officer, Fund Management Company, Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A
Todd L. Spillane — 1958 Chief Compliance Officer		2006	Senior Vice President, Invesco Aim Management Group, Inc.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Chief Compliance Officer, The AIM Family of Funds®, INVESCO Private Capital Investments, Inc. (holding company), Invesco Private Capital, Inc. (registered investment adviser) and Invesco Senior Secured Management, Inc. (registered investment adviser); Vice President, Invesco Aim Distributors, Inc. and Invesco Aim Investment Services, Inc. Formerly: Senior Vice President and Chief Compliance Officer, Invesco Aim Advisors, Inc. and Invesco Aim Capital Management, Inc.; Chief Compliance Officer, Invesco Global Asset Management (N.A.), Inc.; Vice President, Invesco Aim Capital Management, Inc. and Fund Management Company	N/A

The Statement of Additional Information of the Trust includes additional information about the Fund’s Trustees and is available upon request, without charge, by calling 1.800.959.4246. Please refer to the Fund’s prospectus for information on the Fund’s sub-advisers.

Office of the Fund	Investment Adviser	Distributor	Auditors
11 Greenway Plaza, Suite 100	Invesco Advisers, Inc.	Invesco Aim Distributors, Inc.	PricewaterhouseCoopers LLP
Houston, TX 77046-1173	1555 Peachtree Street, N.E.	11 Greenway Plaza, Suite 100	1201 Louisiana Street, Suite 2900
	Atlanta, GA 30309	Houston, TX 77046-1173	Houston, TX 77002-5678
Counsel to the Fund	Counsel to the	Transfer Agent	Custodian
Stradley Ronon Stevens & Young, LLP	Independent Trustees	Invesco Aim Investment Services, Inc.	State Street Bank and Trust Company
2600 One Commerce Square	Kramer, Levin, Naftalis & Frankel LLP	P.O. Box 4739	225 Franklin
Philadelphia, PA 19103	1177 Avenue of the Americas	Houston, TX 77210-4739	Boston, MA 02110-2801
	New York, NY 10036-2714

T-2

AIM V.I. Capital Appreciation Fund
Annual Report to Shareholders § December 31, 2009

The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter-ends. For the second and fourth quarters, the lists appear in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The Fund’s Form N-Q filings are available on the SEC website, sec.gov. Copies of the Fund’s Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers for the Fund are 811-07452 and 033-57340. The Fund’s most recent portfolio holdings, as filed on Form N-Q, have also been made available to insurance companies issuing variable annuity contracts and variable life insurance policies (“variable products”) that invest in the Fund.

A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, from our Client Services department at 800 410 4246 or on the Invesco Aim website, invescoaim.com. On the home page, scroll down and click on Proxy Policy. The information is also available on the SEC website, sec.gov.

Information regarding how the Fund voted proxies related to its portfolio securities during the 12 months ended June 30, 2009, is available at our website, invescoaim.com. Click the About Us tab at the top of the home page; click Legal Information; and then click Proxy Voting Search. The information is also available on the SEC website, sec.gov.

Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Aim Distributors, Inc. is the U.S. distributor for Invesco Ltd.’s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd.

This report must be accompanied or preceded by a currently effective Fund prospectus and variable product prospectus, which contain more complete information, including sales charges and expenses. Investors should read each carefully before investing.

Invesco Aim Distributors, Inc.

NOT FDIC INSURED  |  MAY LOSE VALUE  |  NO BANK GUARANTEE

Management’s Discussion of Fund Performance

Performance summary

For the year ended December 31, 2009, AIM V.I. Capital Appreciation Fund’s Series I shares produced double-digit positive returns but underperformed the Fund’s style-specific index, the Russell 1000 Growth Index. Much of the Fund’s underperformance was due its defensive posture as well as stock selection across sectors. The Fund’s Series I shares also underperformed the broad market, represented by the S&P 500 Index.

     Your Fund’s long-term performance appears later in this report.

Fund vs. Indexes

Total returns, 12/31/08 to 12/31/09, excluding variable product issuer charges.

If variable product issuer charges were included, returns would be lower.

Series I Shares	21.08	%
Series II Shares	20.72
S&P 500 Index6 (Broad Market Index)	26.47
Russell 1000 Growth Index6(Style-Specific Index)	37.21
Lipper VUF Multi-Cap Growth Funds Category Average6 (Peer Group)	40.72

⁶ Lipper Inc.

How we invest

We believe a growth investment strategy is an essential component of a diversified portfolio.

     Our investment process seeks to identify companies that generate sustainable revenue, earnings and cash flow growth that is not fully reflected in investor expectations or equity valuations.

     We begin with a quantitative model that ranks companies based on a set of growth, quality and valuation factors. This proprietary model provides an objective approach to identifying new investment opportunities.

     Our stock selection process is based on a rigorous three-step process that includes fundamental, valuation and timeliness analysis. Importantly, we search for compelling growth companies in all areas of the market, including many sectors that are not traditionally identified as growth sectors.

     Our fundamental analysis focuses on identifying industries and companies with strong fundamental drivers of high-quality growth in revenues, earnings and cash flow. Our valuation analysis focuses on identifying attractively valued stocks based on their growth potential over a two- to three-year time horizon. Our timeliness analysis employs moving average analysis and other selected factors to identify the timeliness of a stock transaction.

     We carefully construct the portfolio with a goal to minimize unnecessary risk. We seek to accomplish this goal by diversifying portfolio holdings across countries, sectors, industries and market capitalizations. Additionally, we avoid building concentrated position sizes and expect to hold numerous stocks in the portfolio. Our target holding period is two to three years for each stock.

     We consider selling a stock when it no longer meets our investment criteria, based on:

n	Deteriorating fundamental business prospects.
n	Declining quantitative rank.
n	Negative changes to the investment thesis.
n	Finding a more attractive opportunity.

Market conditions and your Fund

The year was truly a tale of two markets. During the second half of 2008 and the first two months of 2009, equity markets declined steeply as severe problems in the credit markets, a rapidly deteriorating housing market, rising energy and food prices and a deteriorating outlook for corporate earnings led to a global recession. However, the U.S. economy began to show signs that the contraction was moderating, and equity markets rapidly reversed direction beginning in March 2009, rallying strongly through most of the remaining months of the year.

     In this environment, indexes measuring the performance of large-, mid- and small-cap stocks all had positive returns, with mid-caps outperforming large- and small-cap stocks.¹ In terms of investment style, growth stocks generally outperformed value stocks.¹ Sectors with the highest returns in the broad market as represented by the S&P 500 Index included economically sensitive sectors such as information technology (IT), materials and consumer discretionary.¹

     While the Fund underperformed the Russell 1000 Growth Index for the year as a whole, it held up much better during the first two months of 2009. During those two months, the Fund benefited from a very defensive posture, with significant overweights in less economically sensitive sectors such as consumer staples and health care, and sizable underweights in economically sensitive sectors such as consumer discretionary and IT. Additionally, the Fund had a larger than normal cash position because we used cash as a defensive tool.

Portfolio Composition
By sector

Information Technology	34.5	%
Consumer Discretionary	15.2
Health Care	12.6
Industrials	11.9
Financials	6.8
Energy	6.5
Consumer Staples	4.8
Materials	2.4
Telecommunication Services	1.9
Utilities	0.4
Money Market Funds Plus Other Assets Less Liabilities	3.0

Top 10 Equity Holdings*

1. Google Inc.-Class A		2.8	%
2. Apple Inc.		2.4
3. Gilead Sciences, Inc.		2.3
4. Research In Motion Ltd.		2.2
5. QUALCOMM Inc.		2.0
6. United Technologies Corp.		2.0
7. KDDI Corp.		1.9
8. Microsoft Corp.		1.8
9. International Business Machines Corp.		1.8
10. Check Point Software Technologies Ltd.		1.7
Total Net Assets	$705.6 million
Total Number of Holdings*		124

The Fund’s holdings are subject to change, and there is no assurance that the Fund will continue to hold any particular security.
*	Excluding money market fund holdings.

AIM V.I. Capital Appreciation Fund

     However, the Fund began to underperform the Russell 1000 Growth Index when equity markets hit a bottom and began rallying in March. Fund underperformance was driven primarily by two factors. First, much of the Fund’s underperformance was driven by its defensive posture within and across sectors as economically sensitive stocks outperformed following the March low. Second, the Fund underperformed its style-specific index because it did not own many of the lower-quality, highly levered companies that outperformed during the market rebound. Our investment approach specifically avoids companies with these traits because over the long term they tend to perform poorly.

     Over the course of the year, the Fund underperformed its style-specific index by the widest margin in the IT sector, due to both stock selection and a significant underweight position. Within this sector, the Fund did not own many of the lower quality companies that performed strongly during the stock market rally. Despite underperforming in this sector, all five of the Fund’s top contributors were IT holdings: Microsoft, Google, Research in Motion, Cognizant Technology Solutions and Apple.

     Another area of weakness for the Fund during the year was the consumer staples sector. Within this sector, underperformance was driven by an overweight position and stock selection. Our overweight position detracted from Fund performance because many of these defensive stocks underperformed as investors rotated into economically sensitive stocks during the market rebound. Within this sector, consumer products maker Procter & Gamble and grocery store operator Kroger were two of the leading detractors from Fund performance. Both holdings were sold due to deteriorating fundamentals.

     The Fund underperformed in several other sectors, largely driven by stock selection. Sectors in which the Fund had the greatest underperformance included financials, health care, telecommunication services, consumer discretionary and industrials. The Fund’s larger than normal cash position also was a detractor from performance when equity markets improved.

     The Fund outperformed the Russell 1000 Growth Index in two sectors: utilities and materials. Outperformance in the utilities sector was due to an underweight position. Outperformance in the materials sector was driven primarily by strong stock selection.

     We began to reposition the portfolio in May, moving into economically sensitive holdings that we believed would perform well in a more stable economic environment. This repositioning included a significant reduction in the defensive health care and consumer staples sectors, as well as a reduction in the Fund’s cash position. We rotated into economically sensitive sectors including IT, consumer discretionary and energy.

     As we’ve discussed, the stock market experienced heavy volatility during the year covered by this report. We would like to caution investors against making investment decisions based on short-term performance. As always, we recommend that you consult a financial adviser to discuss your individual financial program.

     We thank you for your commitment to AIM V.I. Capital Appreciation Fund.

1    Lipper Inc.

The views and opinions expressed in management’s discussion of Fund performance are those of Invesco Advisers, Inc. These views and opinions are subject to change at any time based on factors such as market and economic conditions. These views and opinions may not be relied upon as investment advice or recommendations, or as 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 Invesco Advisers, Inc. 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.

See important Fund and index disclosures later in this report.

Robert Lloyd

Chartered Financial Analyst, senior portfolio manager, is lead manager of AIM V.I. Capital Appreciation Fund. He joined Invesco Aim in 2000 and was named a portfolio manager in 2001. Mr. Lloyd earned a B.B.A. from the University of Notre Dame and an M.B.A. from the University of Chicago.

Ryan Amerman

Chartered Financial Analyst, portfolio manager, is manager of AIM V.I. Capital Appreciation Fund. He joined Invesco Aim in 1996. Mr. Amerman earned a B.B.A. from Stephen F. Austin State University and an M.B.A. with an emphasis in finance from the University of St. Thomas.

Assisted by the Large/Multi-Cap Growth Team

AIM V.I. Capital Appreciation Fund

Your Fund’s Long-Term Performance

Results of a $10,000 Investment — Oldest Share Class since Inception
Index data from 4/30/93, Fund data from 5/5/93

1 Lipper Inc.

Past performance cannot guarantee comparable future results.

     This chart, which is a logarithmic chart, presents the fluctuations in the value of the Fund and its indexes. We believe that a logarithmic chart is more effective than other types of charts in illustrating changes in value during the early years shown in the chart. The vertical axis, the one that indicates the dollar value of an investment, is constructed with each segment representing a percent change in the value of the investment. In this chart, each segment represents a doubling, or 100% change, in the value of the investment. In other words, the space between $5,000 and $10,000 is the same size as the space between $10,000 and $20,000, and so on.

Average Annual Total Returns
As of 12/31/09

Series I Shares
Inception (5/5/93)	5.57	%
10 Years	-4.30
5 Years	-2.03
1 Year	21.08
Series II Shares
10 Years	-4.54	%
5 Years	-2.28
1 Year	20.72

Series II shares inception date is August 21, 2001. Returns since that date are historical. All other returns are the blended returns of the historical performance of Series II shares since their inception and the restated historical performance of Series I shares (for periods prior to inception of Series II shares) adjusted to reflect the Rule 12b-1 fees applicable to Series II shares. The inception date of Series I shares is May 5, 1993. The performance of the Fund’s Series I and Series II share classes will differ primarily due to different class expenses.

     The performance data quoted represent past performance and cannot guarantee comparable future results; current performance may be lower or higher. Please contact your variable product issuer or financial adviser for the most recent month-end variable product performance. Performance figures reflect Fund expenses, reinvested distributions and changes in net asset value. Investment return and principal value will fluctuate so that you may have a gain or loss when you sell shares.

     The total annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 0.92% and 1.17%, respectively. The expense ratios presented above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

     AIM V.I. Capital Appreciation Fund, a series portfolio of AIM Variable Insurance Funds, is currently offered through insurance companies issuing variable products. You cannot purchase shares of the Fund directly. Performance figures given represent the Fund and are not intended to reflect actual variable product values. They do not reflect sales charges, expenses and fees assessed in connection with a variable product. Sales charges, expenses and fees, which are determined by the variable product issuers, will vary and will lower the total return.

     The most recent month-end performance data at the Fund level, excluding variable product charges, is available on this Invesco Aim automated information line, 866 702 4402. As mentioned above, for the most recent month-end performance including variable product charges, please contact your variable product issuer or financial adviser.

AIM V.I. Capital Appreciation Fund

AIM V.I. Capital Appreciation Fund’s investment objective is growth of capital.

n	Unless otherwise stated, information presented in this report is as of December 31, 2009, and is based on total net assets.
n	Unless otherwise noted, all data provided by Invesco.

Principal risks of investing in the Fund

Prices of equity securities change in response to many factors, including the historical and prospective earnings of the issuer, the value of its assets, general economic conditions, interest rates, investor perceptions and market liquidity.

     Foreign securities have additional risks, including exchange rate changes, political and economic upheaval, relative lack of information, relatively low market liquidity, and the potential lack of strict financial and accounting controls and standards.

     Since a large percentage of the Fund’s assets may be invested in securities of a limited number of companies, each investment has a greater effect on the Fund’s overall performance, and any change in the value of those securities could significantly affect the value of your investment in the Fund.

     There is no guarantee that the investment techniques and risk analysis used by the Fund’s portfolio managers will produce the desired results.

     The prices of securities held by the Fund may decline in response to market risks.

     Investing in a fund that invests in smaller companies involves risks not associated with investing in more established companies, such as business risk, stock price fluctuations and illiquidity.

About indexes used in this report

The S&P 500^® Index is an unmanaged index considered representative of the U.S. stock market.

     The Russell 1000^® Growth Index is an unmanaged index considered representative of large-cap growth stocks. The Russell 1000 Growth Index is a trademark/service mark of the Frank Russell Co. Russell^® is a trademark of the Frank Russell Co.

     The Lipper VUF Multi-Cap Growth Funds Category Average represents an average of all of the variable insurance underlying funds in the Lipper Multi-Cap Growth Funds category.

     The Fund is not managed to track the performance of any particular index, including the indexes defined here, and consequently, the performance of the Fund may deviate significantly from the performance of the indexes.

     A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group reflects fund expenses; performance of a market index does not.

Other information

The Chartered Financial Analyst^® (CFA^®) designation is globally recognized and attests to a charterholder’s success in a rigorous and comprehensive study program in the field of investment management and research analysis.

     The returns shown in management’s discussion of Fund performance are based on net asset values calculated for shareholder transactions. Generally accepted accounting principles require adjustments to be made to the net assets of the Fund at period end for financial reporting purposes, and as such, the net asset values for shareholder transactions and the returns based on those net asset values may differ from the net asset values and returns reported in the Financial Highlights. Additionally, the returns and net asset values shown throughout this report are at the Fund level only and do not include variable product issuer charges. If such charges were included, the total returns would be lower.

     Industry classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s.

AIM V.I. Capital Appreciation Fund

Schedule of Investments^(a)

December 31, 2009

	Shares		Value
Common Stocks & Other Equity Interests–97.01%
Aerospace & Defense–4.02%
General Dynamics Corp.		49,368	$	3,365,417
Goodrich Corp.		57,235		3,677,349
Honeywell International Inc.		94,570		3,707,144
Rockwell Collins, Inc.		66,296		3,670,146
United Technologies Corp.		200,535		13,919,134
				28,339,190
Air Freight & Logistics–0.48%
Expeditors International of Washington, Inc.		97,859		3,398,643
Airlines–0.76%
Delta Air Lines, Inc.(b)		218,563		2,487,247
UAL Corp.(b)(c)		223,734		2,888,406
				5,375,653
Apparel Retail–1.75%
Aeropostale, Inc.(b)		36,217		1,233,189
American Eagle Outfitters, Inc.		134,814		2,289,141
Gap, Inc. (The)		293,523		6,149,307
Men’s Wearhouse, Inc. (The)		127,299		2,680,917
				12,352,554
Application Software–0.43%
Adobe Systems Inc.(b)		82,563		3,036,667
Asset Management & Custody Banks–0.79%
BlackRock, Inc.		11,367		2,639,417
T. Rowe Price Group Inc.		55,162		2,937,377
				5,576,794
Auto Parts & Equipment–1.54%
Autoliv, Inc. (Sweden)		57,258		2,482,707
BorgWarner, Inc.		42,373		1,407,631
Gentex Corp.		98,344		1,755,441
Johnson Controls, Inc.		192,555		5,245,198
				10,890,977
Automobile Manufacturers–0.66%
Toyota Motor Corp. (Japan)		110,600		4,648,451
Automotive Retail–0.37%
AutoZone, Inc.(b)		16,571		2,619,378
Biotechnology–3.45%
Amgen Inc.(b)		144,379		8,167,520
Gilead Sciences, Inc.(b)		373,187		16,151,533
				24,319,053
	Shares
Communications Equipment–5.72%
Cisco Systems, Inc.(b)		449,922		10,771,133
QUALCOMM Inc.		306,972		14,200,525
Research In Motion Ltd. (Canada)(b)		227,536		15,367,781
				40,339,439
Computer & Electronics Retail–0.31%
Best Buy Co., Inc.		54,731		2,159,685
Computer Hardware–5.42%
Apple Inc.(b)		78,664		16,587,091
Dell Inc.(b)		211,446		3,036,365
Hewlett-Packard Co.		118,673		6,112,846
International Business Machines Corp.		95,446		12,493,881
				38,230,183
Computer Storage & Peripherals–0.38%
QLogic Corp.(b)		97,354		1,837,070
STEC Inc.(b)(c)		49,971		816,526
				2,653,596
Construction & Engineering–0.50%
Fluor Corp.		78,245		3,524,155
Construction, Farm Machinery & Heavy Trucks–0.31%
Komatsu Ltd. (Japan)		106,200		2,214,773
Consumer Finance–0.42%
American Express Co.		72,672		2,944,669
Data Processing & Outsourced Services–2.24%
Alliance Data Systems Corp.(b)(c)		56,548		3,652,435
MasterCard, Inc.–Class A		22,680		5,805,626
Visa Inc.–Class A		72,782		6,365,514
				15,823,575
Department Stores–2.46%
J.C. Penney Co., Inc.		295,634		7,866,821
Kohl’s Corp.(b)		176,017		9,492,597
				17,359,418
Diversified Metals & Mining–2.05%
BHP Billiton Ltd. (Australia)		90,452		3,463,787
Freeport-McMoRan Copper & Gold Inc.		81,659		6,556,401
Rio Tinto PLC (United Kingdom)		82,443		4,445,233
				14,465,421
Education Services–0.52%
Apollo Group, Inc.–Class A(b)		60,901		3,689,383

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

AIM V.I. Capital Appreciation Fund

	Shares		Value
Electrical Components & Equipment–1.09%
Cooper Industries PLC (Ireland)		180,753	$	7,707,308
Electronic Components–0.85%
Corning Inc.		310,336		5,992,588
Electronic Manufacturing Services–1.44%
Flextronics International Ltd. (Singapore)(b)		799,264		5,842,620
Tyco Electronics Ltd. (Switzerland)		176,017		4,321,217
				10,163,837
Environmental & Facilities Services–0.60%
Waste Management, Inc.		125,734		4,251,067
Footwear–0.59%
NIKE, Inc.–Class B		62,938		4,158,314
Gas Utilities–0.39%
EQT Corp.		62,933		2,764,017
General Merchandise Stores–1.22%
Dollar Tree, Inc.(b)		178,940		8,642,802
Health Care Distributors–0.39%
McKesson Corp.		44,209		2,763,063
Health Care Equipment–2.66%
Baxter International Inc.		159,743		9,373,719
Medtronic, Inc.		141,119		6,206,414
Varian Medical Systems, Inc.(b)		68,359		3,202,619
				18,782,752
Health Care Services–2.34%
Express Scripts, Inc.(b)		108,595		9,388,038
Laboratory Corp. of America Holdings(b)		34,403		2,574,720
Medco Health Solutions, Inc.(b)		70,687		4,517,606
				16,480,364
Home Improvement Retail–2.30%
Home Depot, Inc. (The)		255,446		7,390,053
Lowe’s Cos., Inc.		377,561		8,831,152
				16,221,205
Homefurnishing Retail–0.40%
Bed Bath & Beyond Inc.(b)		72,693		2,808,131
Hotels, Resorts & Cruise Lines–0.97%
Carnival Corp.(b)(d)		215,057		6,815,156
Household Products–0.53%
Colgate-Palmolive Co.		45,324		3,723,367
Human Resource & Employment Services–0.32%
Robert Half International, Inc.		85,445		2,283,945
Hypermarkets & Super Centers–1.97%
Costco Wholesale Corp.		138,735		8,208,950
Wal-Mart Stores, Inc.		106,096		5,670,831
				13,879,781
Industrial Conglomerates–0.31%
McDermott International, Inc.(b)		90,477		2,172,353
Industrial Machinery–1.48%
Illinois Tool Works Inc.		54,128		2,597,603
Ingersoll-Rand PLC (Ireland)		177,559		6,345,958
Valmont Industries, Inc.		18,813		1,475,880
				10,419,441
Integrated Oil & Gas–2.27%
Exxon Mobil Corp.		108,500		7,398,615
Occidental Petroleum Corp.		106,101		8,631,316
				16,029,931
Internet Retail–1.59%
Amazon.com, Inc.(b)		56,623		7,616,926
Priceline.com Inc.(b)		16,422		3,588,207
				11,205,133
Internet Software & Services–3.12%
Google Inc.–Class A(b)		32,060		19,876,559
VeriSign, Inc.(b)		88,296		2,140,295
				22,016,854
Investment Banking & Brokerage–2.27%
Charles Schwab Corp. (The)		273,873		5,154,290
Goldman Sachs Group, Inc. (The)		43,338		7,317,188
Jefferies Group, Inc.(b)		148,423		3,522,078
				15,993,556
IT Consulting & Other Services–1.83%
Amdocs Ltd.(b)		133,196		3,800,082
Cognizant Technology Solutions Corp.–Class A(b)		201,872		9,144,801
				12,944,883
Life Sciences Tools & Services–0.67%
Thermo Fisher Scientific, Inc.(b)		99,137		4,727,844
Managed Health Care–0.85%
UnitedHealth Group Inc.		195,815		5,968,441
Oil & Gas Drilling–0.47%
Transocean Ltd.(b)		40,056		3,316,637
Oil & Gas Equipment & Services–2.13%
Baker Hughes Inc.		64,479		2,610,110
Cameron International Corp.(b)		113,486		4,743,715
Halliburton Co.		87,086		2,620,418

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

AIM V.I. Capital Appreciation Fund

	Shares		Value
Oil & Gas Equipment & Services–(continued)
Schlumberger Ltd.		44,126	$	2,872,161
Weatherford International Ltd.(b)		122,794		2,199,240
				15,045,644
Oil & Gas Exploration & Production–1.58%
Apache Corp.		40,493		4,177,663
Devon Energy Corp.		95,037		6,985,219
				11,162,882
Other Diversified Financial Services–0.89%
JPMorgan Chase & Co.		151,199		6,300,462
Packaged Foods & Meats–0.72%
General Mills, Inc.		36,166		2,560,914
Kellogg Co.		46,803		2,489,920
				5,050,834
Pharmaceuticals–2.30%
Abbott Laboratories		131,467		7,097,904
Johnson & Johnson		85,347		5,497,200
Shire PLC (United Kingdom)		184,319		3,603,821
				16,198,925
Property & Casualty Insurance–0.84%
ACE Ltd. (Switzerland)(b)		118,193		5,956,927
Railroads–1.22%
Norfolk Southern Corp.		59,970		3,143,628
Union Pacific Corp.		85,307		5,451,117
				8,594,745
Restaurants–0.49%
Krispy Kreme Doughnuts Inc.–Wts., expiring 03/02/12(e)		1,194		71
McDonald’s Corp.		55,563		3,469,354
				3,469,425
Semiconductor Equipment–2.17%
Applied Materials, Inc.		175,743		2,449,858
ASML Holding N.V. (Netherlands)		296,814		10,081,761
KLA-Tencor Corp.		77,290		2,794,806
				15,326,425
Semiconductors–5.75%
Altera Corp.		288,181		6,521,536
Intel Corp.		542,923		11,075,629
NVIDIA Corp.(b)		178,752		3,339,087
PMC-Sierra, Inc.(b)		175,563		1,520,376
Taiwan Semiconductor Manufacturing Co. Ltd.–ADR (Taiwan)		715,545		8,185,835
Texas Instruments Inc.		151,561		3,949,680
Xilinx, Inc.		238,388		5,974,003
				40,566,146
Soft Drinks–1.60%
PepsiCo, Inc.		186,067		11,312,874
Specialized Finance–1.59%
CME Group Inc.		17,811		5,983,605
IntercontinentalExchange Inc.(b)		46,649		5,238,683
				11,222,288
Steel–0.40%
United States Steel Corp.		50,951		2,808,419
Systems Software–5.11%
Check Point Software Technologies Ltd. (Israel)(b)		356,066		12,063,516
McAfee Inc.(b)		275,955		11,195,494
Microsoft Corp.		420,250		12,813,423
				36,072,433
Trading Companies & Distributors–0.55%
W.W. Grainger, Inc.		39,840		3,857,707
Trucking–0.23%
Con-way Inc.		46,965		1,639,548
Wireless Telecommunication Services–1.94%
KDDI Corp. (Japan)		2,593		13,678,286
Total Common Stocks & Other Equity Interests (Cost $571,843,171)				684,458,397
Money Market Funds–2.93%
Liquid Assets Portfolio–Institutional Class(f)		10,337,472		10,337,472
Premier Portfolio–Institutional Class(f)		10,337,472		10,337,472
Total Money Market Funds (Cost $20,674,944)				20,674,944
TOTAL INVESTMENTS (excluding investments purchased with cash collateral from securities on loan)–99.94% (Cost $592,518,115)				705,133,341
Investments Purchased with Cash Collateral from Securities on Loan
Money Market Funds–0.79%
Liquid Assets Portfolio–Institutional Class (Cost $5,600,870)(f)(g)		5,600,870		5,600,870
TOTAL INVESTMENTS–100.73% (Cost $598,118,985)				710,734,211
OTHER ASSETS LESS LIABILITIES–(0.73)%				(5,146,931	)
NET ASSETS–100.00%			$	705,587,280

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

AIM V.I. Capital Appreciation Fund

Investment Abbreviations:

ADR	– American Depositary Receipt
Wts.	– Warrants

Notes to Schedule of Investments:

(a)	Industry and/or sector classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s.
(b)	Non-income producing security.
(c)	All or a portion of this security was out on loan at December 31, 2009.
(d)	Each unit represents one common share and one trust share.
(e)	Non-income producing security acquired through a corporate action.
(f)	The money market fund and the Fund are affiliated by having the same investment adviser.
(g)	The security has been segregated to satisfy the commitment to return the cash collateral received in securities lending transactions upon the borrower’s return of the securities loaned. See Note 1I.

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

AIM V.I. Capital Appreciation Fund

Statement of Assets and Liabilities

December 31, 2009

Assets:
Investments, at value (Cost $571,843,171)*	$	684,458,397
Investments in affiliated money market funds, at value and cost		26,275,814
Total investments, at value (Cost $598,118,985)		710,734,211
Receivables for:
Investments sold		1,997,898
Fund shares sold		139,963
Dividends		422,071
Investment for trustee deferred compensation and retirement plans		121,472
Other assets		389
Total assets		713,416,004
Liabilities:
Payables for:
Fund shares reacquired		861,309
Amount due custodian		521,132
Collateral upon return of securities loaned		5,600,870
Accrued fees to affiliates		530,411
Accrued other operating expenses		45,297
Trustee deferred compensation and retirement plans		269,705
Total liabilities		7,828,724
Net assets applicable to shares outstanding	$	705,587,280
Net assets consist of:
Shares of beneficial interest	$	1,019,339,851
Undistributed net investment income		4,136,629
Undistributed net realized gain (loss)		(430,504,426	)
Unrealized appreciation		112,615,226
	$	705,587,280
Net Assets:
Series I	$	512,540,420
Series II	$	193,046,860
Shares outstanding, $0.001 par value per share, unlimited number of shares authorized:
Series I		25,211,105
Series II		9,650,211
Series I:
Net asset value per share	$	20.33
Series II:
Net asset value per share	$	20.00

*  At December 31, 2009, securities with an aggregate value of $5,337,699 were on loan to brokers.

Statement of Operations

For the year ended December 31, 2009

Investment income:
Dividends (net of foreign withholding taxes of $98,318)	$	10,959,149
Dividends from affiliated money market funds (includes securities lending income of $17,917)		157,977
Total investment income		11,117,126
Expenses:
Advisory fees		4,026,479
Administrative services fees		1,667,726
Custodian fees		19,617
Distribution fees–Series II		435,691
Transfer agent fees		65,661
Trustees’ and officers’ fees and benefits		42,174
Other		68,440
Total expenses		6,325,788
Less: Fees waived and expense offset arrangement(s)		(38,338	)
Net expenses		6,287,450
Net investment income		4,829,676
Realized and unrealized gain (loss) from:
Net realized gain (loss) from:
Investment securities (includes net gains (losses) from securities sold to affiliates of $(171,528))		(94,026,800	)
Foreign currencies		(39,694	)
		(94,066,494	)
Change in net unrealized appreciation (depreciation) of:
Investment securities		214,318,100
Foreign currencies		(23,348	)
		214,294,752
Net realized and unrealized gain		120,228,258
Net increase in net assets resulting from operations	$	125,057,934

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

AIM V.I. Capital Appreciation Fund

Statement of Changes in Net Assets

For the years ended December 31, 2009 and 2008

	2009			2008
Operations:
Net investment income	$	4,829,676		$	3,196,615
Net realized gain (loss)		(94,066,494	)		(106,704,909	)
Change in net unrealized appreciation (depreciation)		214,294,752			(443,131,750	)
Net increase (decrease) in net assets resulting from operations		125,057,934			(546,640,044	)
Distributions to shareholders from net investment income:
Series I		(2,958,538	)		—
Series II		(485,149	)		—
Total distributions from net investment income		(3,443,687	)		—
Share transactions-net:
Series I		(68,162,037	)		(183,737,135	)
Series II		(16,738,294	)		(36,720,561	)
Net increase (decrease) in net assets resulting from share transactions		(84,900,331	)		(220,457,696	)
Net increase (decrease) in net assets		36,713,916			(767,097,740	)
Net assets:
Beginning of year		668,873,364			1,435,971,104
End of year (includes undistributed net investment income of $4,136,629 and $2,790,334, respectively)	$	705,587,280		$	668,873,364

Notes to Financial Statements

December 31, 2009

NOTE 1—Significant Accounting Policies

AIM V.I. Capital Appreciation Fund (the “Fund”) is a series portfolio of AIM Variable Insurance Funds (the “Trust”). The Trust is a Delaware statutory trust registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end series management investment company consisting of twenty-one separate portfolios, (each constituting a “Fund”). The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Matters affecting each Fund or class will be voted on exclusively by the shareholders of such Fund or class. Current Securities and Exchange Commission (“SEC”) guidance, however, requires participating insurance companies offering separate accounts to vote shares proportionally in accordance with the instructions of the contract owners whose investments are funded by shares of each Fund or class.

  The Fund’s investment objective is growth of capital.

  The Fund currently offers two classes of shares, Series I and Series II, both of which are offered to insurance company separate accounts funding variable annuity contracts and variable life insurance policies (“variable products”).

  The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements.

A.	Security Valuations — Securities, including restricted securities, are valued according to the following policy.
	A security listed or traded on an exchange (except convertible bonds) is valued at its last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales or official closing price on a particular day, the security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based on prices furnished by independent pricing services or market makers. When such securities are valued by an independent pricing service they may be considered fair valued. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean between the last bid and ask prices from the exchange on which they are principally traded. Options not listed on an exchange are valued by an independent source at the mean between the last bid and ask prices. For purposes of determining net asset value per share, futures and option contracts generally are valued 15 minutes after the close of the customary trading session of the New York Stock Exchange (“NYSE”).
	Investments in open-end and closed-end registered investment companies that do not trade on an exchange are valued at the end of day net asset value per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded.
	Debt obligations (including convertible bonds) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution-size trading in similar groups of securities, developments related to specific securities, dividend rate, yield, quality, type of issue, coupon rate,

AIM V.I. Capital Appreciation Fund

	maturity, individual trading characteristics and other market data. Short-term obligations, including commercial paper, having 60 days or less to maturity are recorded at amortized cost which approximates value. Debt securities are subject to interest rate and credit risks. In addition, all debt securities involve some risk of default with respect to interest and/or principal payments.
	Foreign securities (including foreign exchange contracts) are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the NYSE. If market quotations are available and reliable for foreign exchange traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that are significant and make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economical upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
	Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities and Corporate Loans. The mean between the last bid and asked prices may be used to value debt obligations other than Corporate Loans.
	Securities for which market quotations are not readily available or are unreliable are valued at fair value as determined in good faith by or under the supervision of the Trust’s officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a security’s fair value.
	Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
B.	Securities Transactions and Investment Income — Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income is recorded on the accrual basis from settlement date. Dividend income is recorded on the ex-dividend date.
	The Fund may periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain/loss for investments no longer held and as unrealized gain/loss for investments still held.
	Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the realized and unrealized net gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the Fund’s net asset value and, accordingly, they reduce the Fund’s total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in the Statement of Operations and Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the adviser.
	The Fund allocates income and realized and unrealized capital gains and losses to a class based on the relative net assets of each class.
C.	Country Determination — For the purposes of making investment selection decisions and presentation in the Schedule of Investments, the investment adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuer’s securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted.
D.	Distributions — Distributions from income and net realized capital gain, if any, are generally paid to separate accounts of participating insurance companies annually and recorded on ex-dividend date.
E.	Federal Income Taxes — The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code necessary to qualify as a regulated investment company and to distribute substantially all of the Fund’s taxable earnings to shareholders. As such, the Fund will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements.
	The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.
F.	Expenses — Fees provided for under the Rule 12b-1 plan of a particular class of the Fund and which are directly attributable to that class are charged to the operations of such class. All other expenses are allocated among the classes based on relative net assets.
G.	Accounting Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual

AIM V.I. Capital Appreciation Fund

	results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print, which is generally 45 days from the period-end date.
H.	Indemnifications — Under the Trust’s organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Fund’s servicing agreements, that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote.
I.	Securities Lending — The Fund may lend portfolio securities having a market value up to one-third of the Fund’s total assets. Such loans are secured by collateral equal to no less than the market value of the loaned securities determined daily by the securities lending provider. Such collateral will be cash or debt securities issued or guaranteed by the U.S. Government or any of its sponsored agencies. Cash collateral received in connection with these loans is invested in short-term money market instruments or affiliated money market funds and is shown as such on the Schedule of Investments. It is the Fund’s policy to obtain additional collateral from or return excess collateral to the borrower by the end of the next business day, following the valuation date of the securities loaned. Therefore, the value of the collateral held may be temporarily less than the value of the securities on loan. Lending securities entails a risk of loss to the Fund if and to the extent that the market value of the securities loaned were to increase and the borrower did not increase the collateral accordingly, and the borrower fails to return the securities. Upon the failure of the borrower to return the securities, collateral may be liquidated and the securities may be purchased on the open market to replace the loaned securities. The Fund could experience delays and costs in gaining access to the collateral. The Fund bears the risk of any deficiency in the amount of the collateral available for return to the borrower due to any loss on the collateral invested. Dividends received on cash collateral investments for securities lending transactions, which are net of compensation to counterparties, is included in Dividends from affiliates on the Statement of Operations. The aggregate value of securities out on loan is shown as a footnote on the Statement of Assets and Liabilities, if any.
J.	Foreign Currency Translations — Foreign currency is valued at the close of the NYSE based on quotations posted by banks and major currency dealers. Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at date of valuation. Purchases and sales of portfolio securities (net of foreign taxes withheld on disposition) and income items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. The Fund does not separately account for the portion of the results of operations resulting from changes in foreign exchange rates on investments and the fluctuations arising from changes in market prices of securities held. The combined results of changes in foreign exchange rates and the fluctuation of market prices on investments (net of estimated foreign tax withholding) are included with the net realized and unrealized gain or loss from investments in the Statement of Operations. Reported net realized foreign currency gains or losses arise from (i) sales of foreign currencies, (ii) currency gains or losses realized between the trade and settlement dates on securities transactions, and (iii) the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign currency gains and losses arise from changes in the fair values of assets and liabilities, other than investments in securities at fiscal period end, resulting from changes in exchange rates.
	The Fund may invest in foreign securities which may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable.
K.	Foreign Currency Contracts — The Fund may enter into foreign currency contracts to manage or minimize currency or exchange rate risk. The Fund may also enter into foreign currency contracts for the purchase or sale of a security denominated in a foreign currency in order to “lock in” the U.S. dollar price of that security. A foreign currency contract is an obligation to purchase or sell a specific currency for an agreed-upon price at a future date. The use of foreign currency contracts does not eliminate fluctuations in the price of the underlying securities the Fund owns or intends to acquire but establishes a rate of exchange in advance. Fluctuations in the value of these contracts are measured by the difference in the contract date and reporting date exchange rates and are recorded as unrealized appreciation (depreciation) until the contracts are closed. When the contracts are closed, realized gains (losses) are recorded. Realized and unrealized gains (losses) on the contracts are included in the Statement of Operations. The primary risks associated with foreign currency contracts include failure of the counterparty to meet the terms of the contract and the value of the foreign currency changing unfavorably. These risks may be in excess of the amounts reflected in the Statement of Assets and Liabilities.

NOTE 2—Advisory Fees and Other Fees Paid to Affiliates

The Trust has entered into a master investment advisory agreement with Invesco Advisers, Inc. (the “Adviser” or “Invesco”). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Adviser based on the annual rate of the Fund’s average daily net assets as follows:

Average Net Assets	Rate
First $250 million		0	.65%
Over $250 million		0	.60%

AIM V.I. Capital Appreciation Fund

  Through December 31, 2009, the Adviser has contractually agreed to waive advisory fees to the extent necessary so that the advisory fees payable by the Fund (based on the Fund’s average daily net assets) do not exceed the annual rate of:

Average Net Assets	Rate
First $250 million		0	.695%
Next $750 million		0	.625%
Next $1.5 billion		0	.62%
Next $2.5 billion		0	.595%
Next $2.5 billion		0	.57%
Next $2.5 billion		0	.545%
Over $10 billion		0	.52%

  Under the terms of a master sub-advisory agreement approved by shareholders of the Funds between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Trimark Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Funds, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide discretionary investment management services to each Fund based on the percentage of assets allocated to such Sub-Adviser(s).

  On December 31, 2009, Invesco Aim Advisers, Inc., Invesco Aim Capital Management, Inc., Invesco Private Asset Management, Inc. and Invesco Global Asset Management (N.A.), Inc. merged into Invesco Institutional (N.A.), Inc. and the consolidated adviser firm was renamed Invesco Advisers, Inc.

  The Adviser has contractually agreed to waive advisory fees and/or reimburse expenses of all shares to the extent necessary to limit total annual fund operating expenses after fee waiver (excluding certain items discussed below) of Series I shares to 1.30% and Series II shares to 1.45% of average daily net assets, through at least April 30, 2011. In determining the Adviser’s obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the total annual fund operating expenses after fee waiver to exceed the numbers reflected above: (1) interest; (2) taxes; (3) dividend expense on short sales; (4) extraordinary items or non-routine items; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. The Board of Trustees or Invesco may terminate the fee waiver arrangement at any time. The Adviser did not waive fees and/or reimburse expenses during the period under this limitation.

  Further, the Adviser has contractually agreed, through at least June 30, 2010, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash (excluding investments of cash collateral from securities lending) in such affiliated money market funds.

  For the year ended December 31, 2009, the Adviser waived advisory fees of $37,855.

  At the request of the Trustees of the Trust, Invesco Ltd. agreed to reimburse expenses incurred by the Fund in connection with market timing matters in the AIM Funds, which may include legal, audit, shareholder reporting, communications and trustee expenses. For the year ended December 31, 2009, Invesco Ltd. did not reimburse any expenses.

  The Trust has entered into a master administrative services agreement with Invesco pursuant to which the Fund has agreed to pay Invesco a fee for costs incurred in providing accounting services and fund administrative services to the Fund and to reimburse Invesco for administrative services fees paid to insurance companies that have agreed to provide services to the participants of separate accounts. These administrative services provided by the insurance companies may include, among other things: the printing of prospectuses, financial reports and proxy statements and the delivery of the same to existing participants; the maintenance of master accounts; the facilitation of purchases and redemptions requested by the participants; and the servicing of participants’ accounts. Pursuant to such agreement, for the year ended December 31, 2009, Invesco was paid $159,557 for accounting and fund administrative services and reimbursed $1,508,169 for services provided by insurance companies.

  The Trust has entered into a transfer agency and service agreement with Invesco Aim Investment Services, Inc. (“IAIS”) pursuant to which the Fund has agreed to pay IAIS a fee for providing transfer agency and shareholder services to the Fund and reimburse IAIS for certain expenses incurred by IAIS in the course of providing such services. For the year ended December 31, 2009, expenses incurred under the agreement are shown in the Statement of Operations as transfer agent fees.

  The Trust has entered into a master distribution agreement with Invesco Aim Distributors, Inc. (“IADI”) to serve as the distributor for the Fund. The Trust has adopted a plan pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund’s Series II shares (the “Plan”). The Fund, pursuant to the Plan, pays IADI compensation at the annual rate of 0.25% of the Fund’s average daily net assets of Series II shares. Of the Plan payments, up to 0.25% of the average daily net assets of the Series II shares may be paid to insurance companies who furnish continuing personal shareholder services to customers who purchase and own Series II shares of the Fund. For the year ended December 31, 2009, expenses incurred under the Plan are detailed in the Statement of Operations as distribution fees.

  Certain officers and trustees of the Trust are officers and directors of Invesco, IAIS and/or IADI.

AIM V.I. Capital Appreciation Fund

NOTE 3—Additional Valuation Information

Generally Accepted Accounting Principles (“GAAP”) defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3) generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment’s assigned level:

Level 1 —	Prices are determined using quoted prices in an active market for identical assets.
Level 2 —	Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk and others.
Level 3 —	Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information.

  The following is a summary of the tiered valuation input levels, as of December 31, 2009. The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.

	Level 1		Level 2		Level 3		Total
Equity Securities	$	672,201,920	$	38,532,291	$	—	$	710,734,211

NOTE 4—Security Transactions with Affiliated Funds

The Fund is permitted to purchase or sell securities from or to certain other AIM Funds under specified conditions outlined in procedures adopted by the Board of Trustees of the Trust. The procedures have been designed to ensure that any purchase or sale of securities by the Fund from or to another fund or portfolio that is or could be considered an affiliate by virtue of having a common investment adviser (or affiliated investment advisers), common Trustees and/or common officers complies with Rule 17a-7 of the 1940 Act. Further, as defined under the procedures, each transaction is effected at the current market price. Pursuant to these procedures, for the year ended December 31, 2009, the Fund engaged in securities purchases of $2,988,284 and securities sales of $1,237,331, which resulted in net realized gains (losses) of $(171,528).

NOTE 5—Expense Offset Arrangement(s)

The expense offset arrangement is comprised of custodian credits which result from periodic overnight cash balances at the custodian. For the year ended December 31, 2009, the Fund received credits from this arrangement, which resulted in the reduction of the Fund’s total expenses of $483.

NOTE 6—Trustees’ and Officers’ Fees and Benefits

“Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and “Trustees’ and Officers’ Fees and Benefits” also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various AIM Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees are eligible to participate in a retirement plan that provides for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former Trustees who also participate in a retirement plan and receive benefits under such plan. “Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund.

  During the year ended December 31, 2009, the Fund paid legal fees of $4,332 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A member of that firm is a Trustee of the Trust.

NOTE 7—Cash Balances

The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with The State Street Bank and Trust Company, the custodian bank. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (i) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (ii) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.

AIM V.I. Capital Appreciation Fund

NOTE 8—Distributions to Shareholders and Tax Components of Net Assets

Tax Character of Distributions to Shareholders Paid During the Years Ended December 31, 2009 and 2008:

	2009		2008
Ordinary income	$	3,443,687	$	—

Tax Components of Net Assets at Period-End:

	2009
Undistributed ordinary income	$	4,448,535
Net unrealized appreciation–investments		107,336,833
Temporary book/tax differences		(278,980	)
Post-October deferrals		(32,926	)
Capital loss carryforward		(425,226,033	)
Shares of beneficial interest		1,019,339,851
Total net assets	$	705,587,280

  The difference between book-basis and tax-basis unrealized appreciation (depreciation) is due to differences in the timing of recognition of gains and losses on investments for tax and book purposes. The Fund’s net unrealized appreciation difference is attributable primarily to wash sales.

  The temporary book/tax differences are a result of timing differences between book and tax recognition of income and/or expenses. The Fund’s temporary book/tax differences are the result of the trustee deferral of compensation and retirement plan benefits.

  Capital loss carryforward is calculated and reported as of a specific date. Results of transactions and other activity after that date may affect the amount of capital loss carryforward actually available for the Fund to utilize. The ability to utilize capital loss carryforward in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions. Under these limitation rules, the Fund is limited to utilizing $425,226,034 of capital loss carryforward in the fiscal year ending December 31, 2010.

  The Fund has a capital loss carryforward as of December 31, 2009 which expires as follows:

	Capital Loss
Expiration	Carryforward*
December 31, 2010	$	140,535,268
December 31, 2011		56,312,951
December 31, 2017		228,377,814
Total capital loss carryforward	$	425,226,033

*  Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code.

NOTE 9—Investment Securities

The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the year ended December 31, 2009 was $532,037,731 and $580,161,471, respectively. Cost of investments on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed Federal income tax reporting period-end.

Unrealized Appreciation (Depreciation) of Investment Securities on a Tax Basis
Aggregate unrealized appreciation of investment securities	$	121,004,403
Aggregate unrealized (depreciation) of investment securities		(13,667,570	)
Net unrealized appreciation of investment securities	$	107,336,833
Cost of investments for tax purposes is $603,397,378.

NOTE 10—Reclassification of Permanent Differences

Primarily as a result of differing book/tax treatment of expired capital loss carryforward and foreign currency transactions, on December 31, 2009, undistributed net investment income was decreased by $39,694, undistributed net realized gain (loss) was increased by $8,302,172 and shares of beneficial interest decreased by $8,262,478. This reclassification had no effect on the net assets of the Fund.

AIM V.I. Capital Appreciation Fund

NOTE 11—Share Information

	Summary of Share Activity
	Year ended December 31,
	2009(a)						2008
	Shares			Amount			Shares			Amount
Sold:
Series I		1,264,061		$	22,171,261			1,708,428		$	40,436,878
Series II		874,710			15,048,701			1,300,851			26,652,962
Issued as reinvestment of dividends:
Series I		149,045			2,958,538			—			—
Series II		24,828			485,149			—			—
Reacquired:
Series I		(5,328,522	)		(93,291,836	)		(9,585,390	)		(224,174,013	)
Series II		(1,893,167	)		(32,272,144	)		(2,724,387	)		(63,373,523	)
Net increase (decrease) in share activity		(4,909,045	)	$	(84,900,331	)		(9,300,498	)	$	(220,457,696	)

^(a) There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 51% of the outstanding shares of the Fund. The Fund and the Fund’s principal underwriter or adviser, are parties to participation agreements with these entities whereby these entities sell units of interest in separate accounts funding variable products that are invested in the Fund. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as, securities brokerage, third party record keeping and account servicing and administrative services. The Trust has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially.

NOTE 12—Financial Highlights

The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.

																						Ratio of			Ratio of
																						expenses			expenses
						Net gains																to average			to average net			Ratio of net
	Net asset		Net			(losses) on						Dividends										net assets			assets without			investment
	value,		investment			securities (both			Total from			from net			Net asset					Net assets,		with fee waivers			fee waivers			income (loss)
	beginning		income			realized and			investment			investment			value, end		Total			end of period		and/or expenses			and/or expenses			to average			Portfolio
	of period		(loss)			unrealized)			operations			income			of period		Return(a)			(000s omitted)		absorbed			absorbed			net assets			turnover(b)
Series I
Year ended 12/31/09	$	16.89	$	0.14	(c)	$	3.42		$	3.56		$	(0.12	)	$	20.33		21.08	%	$	512,540		0.90	%(d)		0.91	%(d)		0.79	%(d)		85	%
Year ended 12/31/08		29.37		0.09	(c)		(12.57	)		(12.48	)		—			16.89		(42.49	)		492,079		0.91			0.91			0.37			103
Year ended 12/31/07		26.22		0.01			3.14			3.15			—			29.37		12.01			1,086,677		0.88			0.88			0.03			71
Year ended 12/31/06		24.67		0.01			1.55			1.56			(0.01	)		26.22		6.34			1,204,559		0.91			0.91			0.06			120
Year ended 12/31/05		22.69		0.03			1.97			2.00			(0.02	)		24.67		8.79			822,899		0.89			0.89			0.11			97
Series II
Year ended 12/31/09		16.61		0.09	(c)		3.35			3.44			(0.05	)		20.00		20.72			193,047		1.15	(d)		1.16	(d)		0.54	(d)		85
Year ended 12/31/08		28.95		0.03	(c)		(12.37	)		(12.34	)		—			16.61		(42.63	)		176,794		1.16			1.16			0.12			103
Year ended 12/31/07		25.91		(0.07	)		3.11			3.04			—			28.95		11.73			349,294		1.13			1.13			(0.22	)		71
Year ended 12/31/06		24.43		(0.05	)		1.53			1.48			—			25.91		6.06			371,316		1.16			1.16			(0.19	)		120
Year ended 12/31/05		22.50		(0.03	)		1.96			1.93			—			24.43		8.58			339,190		1.14			1.14			(0.14	)		97

(a)	Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Total returns do not reflect charges assessed in connection with a variable product, which if included would reduce total returns.
(b)	Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable.
(c)	Calculated using average shares outstanding.
(d)	Ratios are based on average daily net assets (000’s omitted) of $475,970 and $174,277 for Series I and Series II shares, respectively.

AIM V.I. Capital Appreciation Fund

Report of Independent Registered Public Accounting Firm

To the Board of Trustees of AIM Variable Insurance Funds

and Shareholders of AIM V.I. Capital Appreciation Fund:

In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of AIM V.I. Capital Appreciation Fund, (one of the funds constituting AIM Variable Insurance Funds, hereafter referred to as the “Fund”) at December 31, 2009, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at December 31, 2009 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP

February 10, 2010

Houston, Texas

AIM V.I. Capital Appreciation Fund

Calculating your ongoing Fund expenses

Example

As a shareholder of the Fund, you incur ongoing costs, including management fees; distribution and/or service fees (12b-1); and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period July 1, 2009 through December 31, 2009.

  The actual and hypothetical expenses in the examples below do not represent the effect of any fees or other expenses assessed in connection with a variable product; if they did, the expenses shown would be higher while the ending account values shown would be lower.

Actual expenses

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

Hypothetical example for comparison purposes

The table below also provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return.

  The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

  Please note that the expenses shown in the table are meant to highlight your ongoing costs. Therefore, the hypothetical information is useful in comparing ongoing costs, and will not help you determine the relative total costs of owning different funds.

							HYPOTHETICAL
							(5% annual return before
			ACTUAL				expenses)
	Beginning		Ending		Expenses		Ending		Expenses		Annualized
	Account Value		Account Value		Paid During		Account Value		Paid During		Expense
Class	(07/01/09)		(12/31/09)1		Period2		(12/31/09)		Period2		Ratio
Series I	$	1,000.00	$	1,178.70	$	4.94	$	1,020.67	$	4.58		0.90	%
Series II		1,000.00		1,177.40		6.31		1,019.41		5.85		1.15

1	The actual ending account value is based on the actual total return of the Fund for the period July 1, 2009 through December 31, 2009, after actual expenses and will differ from the hypothetical ending account value which is based on the Fund’s expense ratio and a hypothetical annual return of 5% before expenses.
2	Expenses are equal to the Fund’s annualized expense ratio as indicated above multiplied by the average account value over the period, multiplied by 184/365 to reflect the most recent fiscal half year.

AIM V.I. Capital Appreciation Fund

Tax Information

Form 1099-DIV, Form 1042-S and other year-end tax information provide shareholders with actual calendar year amounts that should be included in their tax returns. Shareholders should consult their tax advisers.

  The following distribution information is being provided as required by the Internal Revenue Code or to meet a specific state’s requirement.

  The Fund designates the following amounts or, if subsequently determined to be different, the maximum amount allowable for its fiscal year ended December 31, 2009:

Federal and State Income Tax
Corporate Dividends Received Deduction*	100.00%

*  The above percentage is based on ordinary income dividends paid to shareholders during the Fund’s fiscal year.

AIM V.I. Capital Appreciation Fund

Trustees and Officers

The address of each trustee and officer of AIM Variable Insurance Funds (the “Trust”), is 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173. Each trustee oversees 105 portfolios in the AIM Funds complex. The trustees serve for the life of the Trust, subject to their earlier death, incapacitation, resignation, retirement or removal as more specifically provided in the Trust’s organizational documents. Each officer serves for a one year term or until their successors are elected and qualified. Column two below includes length of time served with predecessor entities, if any.

	Trustee and/
Name, Year of Birth and	or Officer	Principal Occupation(s)	Other Directorship(s)
Position(s) Held with the Trust	Since	During Past 5 Years	Held by Trustee
Interested Persons
Martin L. Flanagan1 —1960 Trustee	2007	Executive Director, Chief Executive Officer and President, Invesco Ltd. (ultimate parent of Invesco Aim and a global investment management firm); Adviser to the Board, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Trustee, The AIM Family of Funds®; Board of Governors, Investment Company Institute; and Member of Executive Board, SMU Cox School of Business Formerly: Chairman, Invesco Aim Advisors, Inc. (registered investment adviser); Director, Chairman, Chief Executive Officer and President, IVZ Inc. (holding company), INVESCO Group Services, Inc. (service provider) and Invesco North American Holdings, Inc. (holding company); Director, Chief Executive Officer and President, Invesco Holding Company Limited (parent of Invesco Aim and a global investment management firm); Director, Invesco Ltd.; Chairman and Vice Chairman, Investment Company Institute	None
Philip A. Taylor2 —1954 Trustee, President and Principal Executive Officer	2006	Head of North American Retail and Senior Managing Director, Invesco Ltd.; Director, Co-Chairman, Co-President and Co-Chief Executive Officer, Invesco Advisers, inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Director, Chief Executive Officer and President, Invesco Aim Advisors, Inc. and 1371 Preferred Inc. (holding company); Director, Chairman, Chief Executive Officer and President, Invesco Aim Management Group, Inc. (financial services holding company); Director, Co-Chairman, Co-President and Co-Chief Executive Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Director and President, INVESCO Funds Group, Inc. (registered investment adviser and registered transfer agent) and AIM GP Canada Inc. (general partner for limited partnerships); Director, Invesco Aim Distributors, Inc. (registered broker dealer); Director and Chairman, Invesco Aim Investment Services, Inc. (registered transfer agent) and INVESCO Distributors, Inc. (registered broker dealer); Director, President and Chairman, INVESCO Inc. (holding company) and Invesco Canada Holdings Inc. (holding company); Chief Executive Officer, AIM Trimark Corporate Class Inc. (corporate mutual fund company) and AIM Trimark Canada Fund Inc. (corporate mutual fund company); Director and Chief Executive Officer, Invesco Trimark Ltd./Invesco Trimark Ltèe (registered investment adviser and registered transfer agent) and Invesco Trimark Dealer Inc. (registered broker dealer); Trustee, President and Principal Executive Officer, The AIM Family of Funds® (other than AIM Treasurer’s Series Trust and Short-Term Investments Trust); Trustee and Executive Vice President, The AIM Family of Funds® (AIM Treasurer’s Series Trust and Short-Term Investments Trust only); and Manager, Invesco PowerShares Capital Management LLC Formerly: Manager, Invesco PowerShares Capital Management LLC; Director, Chief Executive Officer and President, Invesco Aim Advisors, Inc.; Director, Chairman, Chief Executive Officer and President, Invesco Aim Capital Management, Inc.; President, Invesco Trimark Dealer Inc. and Invesco Trimark Ltd./Invesco Trimark Ltèe; Director and President, AIM Trimark Corporate Class Inc. and AIM Trimark Canada Fund Inc.; Senior Managing Director, Invesco Holding Company Limited; Trustee and Executive Vice President, Tax-Free Investments Trust; Director and Chairman, Fund Management Company (former registered broker dealer); President and Principal Executive Officer, The AIM Family of Funds® (AIM Treasurer’s Series Trust, Short-Term Investments Trust and Tax-Free Investments Trust only); President, AIM Trimark Global Fund Inc. and AIM Trimark Canada Fund Inc.	None
Independent Trustees
Bruce L. Crockett —1944 Trustee and Chair	1993	Chairman, Crockett Technology Associates (technology consulting company)	ACE Limited (insurance company); Captaris, Inc. (unified messaging provider); and Investment Company Institute
Bob R. Baker —1936 Trustee	2004	Retired	None
Frank S. Bayley—1939 Trustee	2001	Retired Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios)	None
James T. Bunch —1942 Trustee	2004	Founder, Green, Manning & Bunch Ltd., (investment banking firm)	Board of Governors, Western Golf Association/Evans Scholars Foundation and Executive Committee, United States Golf Association
Albert R. Dowden—1941 Trustee	2000	Director of a number of public and private business corporations, including the Boss Group, Ltd. (private investment and management); Reich & Tang Funds (registered investment company); and Homeowners of America Holding Corporation/Homeowners of America Insurance Company (property casualty company)	Board of Nature’s Sunshine Products, Inc.
		Formerly: Director, Continental Energy Services, LLC (oil and gas pipeline service); Director, CompuDyne Corporation (provider of product and services to the public security market) and Director, Annuity and Life Re (Holdings), Ltd. (reinsurance company); Director, President and Chief Executive Officer, Volvo Group North America, Inc.; Senior Vice President, AB Volvo; Director of various public and private corporations
Jack M. Fields —1952 Trustee	1997	Chief Executive Officer, Twenty First Century Group, Inc. (government affairs company); and Owner and Chief Executive Officer, Dos Angelos Ranch, L.P. (cattle, hunting, corporate entertainment), Discovery Global Education Fund (non-profit) and Cross Timbers Quail Research Ranch (non-profit)	Administaff
		Formerly: Chief Executive Officer, Texana Timber LP (sustainable forestry company)
Carl Frischling —1937 Trustee	1993	Partner, law firm of Kramer Levin Naftalis and Frankel LLP	Director, Reich & Tang Funds (16 portfolios)
Prema Mathai-Davis —1950 Trustee	1998	Retired	None
Lewis F. Pennock —1942 Trustee	1993	Partner, law firm of Pennock & Cooper	None
Larry Soll —1942 Trustee	2004	Retired	None
Raymond Stickel, Jr. —1944 Trustee	2005	Retired Formerly: Director, Mainstay VP Series Funds, Inc. (25 portfolios)	None

1	Mr. Flanagan is considered an interested person of the Trust because he is an officer of the adviser to the Trust, and an officer and a director of Invesco Ltd., ultimate parent of the adviser to the Trust.
2	Mr. Taylor is considered an interested person of the Trust because he is an officer and a director of the adviser to, and a director of the principal underwriter of, the Trust.

T-1

Trustees and Officers — (continued)

	Trustee and/
Name, Year of Birth and	or Officer	Principal Occupation(s)	Other Directorship(s)
Position(s) Held with the Trust	Since	During Past 5 Years	Held by Trustee
Other Officers
Russell C. Burk—1958 Senior Vice President and Senior Officer	2005	Senior Vice President and Senior Officer of The AIM Family of Funds®	N/A
John M. Zerr —1962 Senior Vice President, Chief Legal Officer and Secretary	2006	Director, Senior Vice President, Secretary and General Counsel, Invesco Aim Management Group, Inc., Senior Vice President, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Director, Senior Vice President and Secretary, Invesco Aim Distributors, Inc.; Director, Vice President and Secretary, Invesco Aim Investment Services, Inc. and INVESCO Distributors, Inc.; Director and Vice President, INVESCO Funds Group, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The AIM Family of Funds®; and Manager, Invesco PowerShares Capital Management LLC Formerly: Director, Senior Vice President, General Counsel and Secretary, Invesco Aim Advisors, Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco Aim Capital Management, Inc.; Chief Operating Officer and General Counsel, Liberty Ridge Capital, Inc. (an investment adviser); Vice President and Secretary, PBHG Funds (an investment company) and PBHG Insurance Series Fund (an investment company); Chief Operating Officer, General Counsel and Secretary, Old Mutual Investment Partners (a broker-dealer); General Counsel and Secretary, Old Mutual Fund Services (an administrator) and Old Mutual Shareholder Services (a shareholder servicing center); Executive Vice President, General Counsel and Secretary, Old Mutual Capital, Inc. (an investment adviser); and Vice President and Secretary, Old Mutual Advisors Funds (an investment company)	N/A
Lisa O. Brinkley —1959 Vice President	2004	Global Compliance Director, Invesco Ltd.; Chief Compliance Officer, Invesco Aim Distributors, Inc. and Invesco Aim Investment Services, Inc.; and Vice President, The AIM Family of Funds® Formerly: Senior Vice President, Invesco Aim Management Group, Inc.; Senior Vice President and Chief Compliance Officer, Invesco Aim Advisors, Inc. and The AIM Family of Funds®; Vice President and Chief Compliance Officer, Invesco Aim Capital Management, Inc. and Invesco Aim Distributors, Inc.; Vice President, Invesco Aim Investment Services, Inc. and Fund Management Company	N/A
Kevin M. Carome —1956 Vice President	2003	General Counsel, Secretary and Senior Managing Director, Invesco Ltd.; Director, Invesco Holding Company Limited and INVESCO Funds Group, Inc.; Director and Executive Vice President, IVZ, Inc., Invesco Group Services, Inc., Invesco North American Holdings, Inc. and Invesco Investments (Bermuda) Ltd.; Director and Secretary, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); and Vice President, The AIM Family of Funds® Formerly: Senior Managing Director and Secretary, Invesco North American Holdings, Inc.; Vice President and Secretary, IVZ, Inc. and Invesco Group Services, Inc.; Senior Managing Director and Secretary, Invesco Holding Company Limited; Director, Senior Vice President, Secretary and General Counsel, Invesco Aim Management Group, Inc. and Invesco Aim Advisors, Inc.; Senior Vice President, Invesco Aim Distributors, Inc.; Director, General Counsel and Vice President, Fund Management Company; Vice President, Invesco Aim Capital Management, Inc. and Invesco Aim Investment Services, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The AIM Family of Funds®; Director and Vice President, INVESCO Distributors, Inc.; and Chief Executive Officer and President, INVESCO Funds Group, Inc.	N/A
Sheri Morris —1964 Vice President, Treasurer and Principal Financial Officer	1999	Vice President, Treasurer and Principal Financial Officer, The AIM Family of Funds®; and Vice President, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.) Formerly: Vice President, Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.; Assistant Vice President and Assistant Treasurer, The AIM Family of Funds® and Assistant Vice President, Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A
Karen Dunn Kelley —1960 Vice President	1993	Head of Invesco’s World Wide Fixed Income and Cash Management Group; Senior Vice President, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Executive Vice President, Invesco Aim Distributors, Inc.; Senior Vice President, Invesco Aim Management Group, Inc.; and Director, Invesco Mortgage Capital Inc.; Vice President, The AIM Family of Funds® (other than AIM Treasurer’s Series Trust and Short-Term Investments Trust); and President and Principal Executive Officer, The AIM Family of Funds® (AIM Treasurer’s Series Trust and Short-Term Investments Trust only) Formerly: Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Director of Cash Management and Senior Vice President, Invesco Aim Advisors, Inc. and Invesco Aim Capital Management, Inc.; President and Principal Executive Officer, Tax-Free Investments Trust; Director and President, Fund Management Company; Chief Cash Management Officer, Director of Cash Management, Senior Vice President, and Managing Director, Invesco Aim Capital Management, Inc.; Director of Cash Management, Senior Vice President, and Vice President, Invesco Aim Advisors, Inc. and The AIM Family of Funds® (AIM Treasurer’s Series Trust, Short-Term Investments Trust and Tax-Free Investments Trust only)	N/A
Lance A. Rejsek—1967 Anti-Money Laundering Compliance Officer	2005	Anti-Money Laundering Compliance Officer, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Invesco Aim Distributors, Inc., Invesco Aim Investment Services, Inc., and The AIM Family of Funds®	N/A
		Formerly: Anti-Money Laundering Compliance Officer, Fund Management Company, Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.
Todd L. Spillane —1958 Chief Compliance Officer	2006	Senior Vice President, Invesco Aim Management Group, Inc.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Chief Compliance Officer, The AIM Family of Funds®, INVESCO Private Capital Investments, Inc. (holding company), Invesco Private Capital, Inc. (registered investment adviser) and Invesco Senior Secured Management, Inc. (registered investment adviser); Vice President, Invesco Aim Distributors, Inc. and Invesco Aim Investment Services, Inc. Formerly: Senior Vice President and Chief Compliance Officer, Invesco Aim Advisors, Inc. and Invesco Aim Capital Management, Inc.; Chief Compliance Officer, Invesco Global Asset Management (N.A.), Inc.; Vice President, Invesco Aim Capital Management, Inc. and Fund Management Company	N/A

The Statement of Additional Information of the Trust includes additional information about the Fund’s Trustees and is available upon request, without charge, by calling 1.800.959.4246. Please refer to the Fund’s prospectus for information on the Fund’s
sub-advisers.

Office of the Fund	Investment Adviser	Distributor	Auditors
11 Greenway Plaza, Suite 100	Invesco Advisers, Inc.	Invesco Aim Distributors, Inc.	PricewaterhouseCoopers LLP
Houston, TX 77046-1173	1555 Peachtree Street, N.E.	11 Greenway Plaza, Suite 100	1201 Louisiana Street, Suite 2900
	Atlanta, GA 30309	Houston, TX 77046-1173	Houston, TX 77002-5678
Counsel to the Fund	Counsel to the	Transfer Agent	Custodian
Stradley Ronon Stevens & Young, LLP	Independent Trustees	Invesco Aim Investment Services, Inc.	State Street Bank and Trust Company
2600 One Commerce Square	Kramer, Levin, Naftalis & Frankel LLP	P.O. Box 4739	225 Franklin
Philadelphia, PA 19103	1177 Avenue of the Americas	Houston, TX 77210-4739	Boston, MA 02110-2801
	New York, NY 10036-2714

AIM V.I. Capital Development Fund
Annual Report to Shareholders n December 31, 2009

The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter-ends. For the second and fourth quarters, the lists appear in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The Fund’s Form N-Q filings are available on the SEC website, sec.gov. Copies of the Fund’s Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers for the Fund are 811-07452 and 033-57340. The Fund’s most recent portfolio holdings, as filed on Form N-Q, have also been made available to insurance companies issuing variable annuity contracts and variable life insurance policies (“variable products”) that invest in the Fund.

A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, from our Client Services department at 800 410 4246 or on the Invesco Aim website, invescoaim.com. On the home page, scroll down and click on Proxy Policy. The information is also available on the SEC website, sec.gov.

Information regarding how the Fund voted proxies related to its portfolio securities during the 12 months ended June 30, 2009, is available at our website, invescoaim.com. Click the About Us tab at the top of the home page; click Legal Information; and then click Proxy Voting Search. The information is also available on the SEC website, sec.gov.

Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Aim Distributors, Inc. is the U.S. distributor for Invesco Ltd.’s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd.

This report must be accompanied or preceded by a currently effective Fund prospectus and variable product prospectus, which contain more complete information, including sales charges and expenses. Investors should read each carefully before investing.

Invesco Aim Distributors, Inc.

NOT FDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEE

Management’s Discussion of Fund Performance

Performance summary

For the fiscal year ended December 31, 2009, AIM V.I. Capital Development Fund had positive double-digit returns but underperformed the Fund’s style-specific benchmark, the Russell Midcap Growth Index. Underperformance was driven primarily by stock selection in several sectors.

     The Fund, excluding variable product issuer charges, outperformed the broad market as represented by the S&P 500 Index as mid-cap stocks generally outperformed large-cap stocks.

     Your Fund’s long-term performance appears later in this report.

Fund vs. Indexes

Total returns, 12/31/08 to 12/31/09, excluding variable product issuer charges.

If variable product issuer charges were included, returns would be lower.

Series I Shares	42.37	%
Series II Shares	41.99
S&P 500 Index6 (Broad Market Index)	26.47
Russell Midcap Growth Index6 (Style-Specific Index)	46.29
Lipper VUF Mid-Cap Growth Funds Index6 (Peer Group Index)	45.97

⁶ Lipper Inc.

How we invest

We believe a growth investment strategy is an essential component of a diversified portfolio.

     Our investment process combines fundamental and quantitative analysis to uncover companies exhibiting long-term, sustainable revenue, earnings and cash flow growth that is not yet reflected by the stock’s market price.

     Our quantitative model ranks companies based on a set of fundamental, valuation and timeliness factors. This quantitative model is designed to identify stocks with the highest probability of meeting our team’s investment criteria. Stocks that are ranked highest by our quantitative model are the focus of our fundamental research efforts.

     Our fundamental analysis focuses on identifying companies and industries with strong drivers of growth. To accomplish this goal, we develop a fully integrated financial model to gain a more complete understanding of the financial health of each investment candidate. Additionally, our research involves due diligence of the company, which includes a detailed analysis of the strategic plans of the company’s management team. We also analyze key competitors, customers and suppliers to assess the overall attractiveness and growth potential of the industry.

     Risk management plays an important role in portfolio construction, as our target portfolio attempts to limit volatility and downside risk. We seek to accomplish this goal by investing in sectors, industries and companies with attractive fundamental prospects. We limit the Fund’s sector exposure and also seek to minimize stock-specific risk by building a diversified portfolio.

     We consider selling a stock for any of the following reasons:

n There is a change in fundamentals, market capitalization or deterioration in the timeliness profile.

n	The price target set at purchase has been reached.
n	The investment thesis is no longer valid.
n	Insider selling indicates potential issues.

Market conditions and your Fund

The fiscal year was truly a tale of two markets. During the second half of 2008 and the first two months of 2009, equity markets experienced steep declines as severe problems in credit markets, a rapidly deteriorating housing market, rising energy and food prices and a deteriorating outlook for corporate earnings led to a global economic recession. However, the U.S. economy began to show signs that the economic contraction was moderating, and equity markets rapidly reversed direction beginning in March 2009 and rallied strongly for most of the remaining months in the fiscal year.

     In this environment, indexes measuring the performance of large-, mid- and small-cap stocks all had positive returns, with mid-cap stocks outperforming large- and small-cap stocks.¹ In terms of investment style, growth stocks outperformed value stocks.¹ The sectors with the highest returns in the broad market as represented by the S&P 500 Index included more economically sensitive sectors such as information technology (IT), materials and consumer discretionary.¹

     The Fund had double-digit absolute returns, but underperformed the Russell Midcap Growth Index during the fiscal year. The Fund underperformed by the widest margin in the utilities, health care, materials and consumer discretionary sectors. The Fund’s cash position also detracted from relative performance as equity markets rallied. Some of this underperformance was offset by outperformance in other sectors, including financials and IT.

Portfolio Composition
By sector

Information Technology	22.8	%
Consumer Discretionary	16.7
Industrials	16.5
Health Care	11.2
Energy	10.5
Financials	8.8
Materials	5.7
Consumer Staples	2.5
Utilities	1.3
Telecommunication Services	1.2
Money Market Funds Plus Other Assets Less Liabilities	2.8

Top 10 Equity Holdings*

1. Continental Resources, Inc.	1.9	%
2. Cognizant Technology Solutions Corp.-Class A	1.5
3. KLA-Tencor Corp.	1.5
4. Nordstrom, Inc.	1.4
5. Marvell Technology Group Ltd.	1.4
6. Solera Holdings Inc.	1.4
7. Check Point Software Technologies Ltd.	1.4
8. Alliance Data Systems Corp.	1.3
9. Jarden Corp.	1.3
10. Walter Energy, Inc.	1.2

Top Five Industries*

1. Semiconductors		5.9	%
2. Oil & Gas Exploration & Production		4.9
3. Application Software		3.7
4. Apparel, Accessories & Luxury Goods		3.5
5. Oil & Gas Equipment & Services		3.4
Total Net Assets	$176.1 million
Total Number of Holdings*		99

The Fund’s holdings are subject to change, and there is no assurance that the Fund will continue to hold any particular security.

* Excluding money market fund holdings.

AIM V.I. Capital Development Fund

     The Fund underperformed most significantly in the utilities sector, driven by stock selection. Despite reasonable stock valuation, NRG Energy spent much of the year defending itself against a hostile takeover and had double-digit losses in its share price, which detracted from Fund performance during the fiscal year.

     The Fund also underperformed in the health care sector. Within this sector, key detractors from performance included contract research organization holding Pharmaceutical Product Development, as well as health insurer Humana. While we sold the Fund’s position in Humana due to deteriorating fundamentals, we continued to own Pharmaceutical Product Development at the close of the reporting period.

     In the materials sector, underperformance was driven by stock selection and an overweight position. One of the leading detractors from Fund performance was glass container manufacturer

Owens-Illinois.

     Underperformance in the consumer discretionary sector was also driven by stock selection. Within this sector, one of the leading detractors from Fund performance was Gildan Activewear, a company that manufactures and markets blank T-shirts and golf shirts for private label use. We used proceeds from the sale of Gildan to purchase additional shares of undergarment maker Hanes-brands, which was among the Fund’s leading contributors to performance during the year. Additionally, consumer products maker Jarden was the top contributor to Fund performance during the fiscal year.

     Some of this underperformance was offset by outperformance in other sectors. The Fund outperformed the Russell Midcap Growth Index by the widest margin in the financials sector. Within this sector, one area of strength for the Fund was its capital markets holdings. Many of these holdings had strong performance as economic and stock market conditions improved dramatically after the market rebound. Fund holding Morgan Stanley was a key contributor to performance. We sold this holding during the summer because the strong recovery of the shares caused the market capitalization to exceed our mid-cap mandate.

     The Fund also outperformed the Russell Midcap Growth Index in the IT sector, driven by stock selection. One of the leading contributors to Fund performance was hard-disk maker Western Digital, a holding that was up more than 200% during the fiscal year. One other IT holding, IT services provider Cognizant Technology Solutions, was among the Fund’s top contributors to performance.

     During the year, we increased the Fund’s exposure to more economically sensitive sectors including energy, IT and consumer discretionary. The largest reduction was in the more defensive health care sector.

     As we’ve discussed, the stock market experienced significant volatility during the year. We would like to caution investors against making investment decisions based on short-term performance. As always, we recommend that you consult a financial adviser to discuss your individual financial program.

     We thank you for your commitment to AIM V.I. Capital Development Fund.

1 Lipper Inc.

The views and opinions expressed in management’s discussion of Fund performance are those of Invesco Advisers, Inc. These views and opinions are subject to change at any time based on factors such as market and economic conditions. These views and opinions may not be relied upon as investment advice or recommendations, or as 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 Invesco Advisers, Inc. 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.

See important Fund and index disclosures later in this report.

Paul Rasplicka

Chartered Financial Analyst, senior portfolio manager, is lead manager of AIM V.I. Capital Development Fund. Mr. Rasplicka has been associated with the adviser and/or its affiliates since 1994. He began his investment career in 1982 as an equity research analyst. A native of Denver, Mr. Rasplicka is a magna cum laude graduate of the University of Colorado in Boulder with a B.S. in business administration. He earned an M.B.A. from the University of Chicago. He is a Chartered Investment Counselor.

Brent Lium

Chartered Financial Analyst, portfolio manager, is manager of AIM V.I. Capital Development Fund. He joined Invesco in 1999 in its corporate associate program and joined Invesco Aim in 2003. Mr. Lium earned a B.B.A. from Texas A&M University and an M.B.A. from The University of Texas at Austin.

Assisted by the Mid Cap Growth Team

AIM V.I. Capital Development Fund

Your Fund’s Long-Term Performance

Results of a $10,000 Investment — Oldest Share Class since Inception
Index data from 4/30/98, Fund data from 5/1/98

1 Lipper Inc.

Past performance cannot guarantee comparable future results.

     This chart, which is a logarithmic chart, presents the fluctuations in the value of the Fund and its indexes. We believe that a logarithmic chart is more effective than other types of charts in illustrating changes in value during the early years shown in the chart. The vertical axis, the one that indicates the dollar value of an investment, is constructed with each segment representing a percent change in the value of the investment. In this chart, each segment represents a doubling, or 100% change, in the value of the investment. In other words, the space between $5,000 and $10,000 is the same size as the space between $10,000 and $20,000, and so on.

Average Annual Total Returns
As of 12/31/09

Series I Shares
Inception (5/1/98)	3.96	%
10 Years	2.80
5 Years	1.32
1 Year	42.37
Series II Shares
10 Years	2.55	%
5 Years	1.06
1 Year	41.99

Series II shares’ inception dates is August 21, 2001. Returns since that date are historical. All other returns are the blended returns of the historical performance of Series II shares since their inception and the restated historical performance of Series I shares (for periods prior to inception of Series II shares) adjusted to reflect the Rule 12b-1 fees applicable to Series II shares. The inception date of Series I shares is May 1, 1998.

     The performance of the Fund’s Series I and Series II share classes will differ primarily due to different class expenses.

     The performance data quoted represent past performance and cannot guarantee comparable future results; current performance may be lower or higher. Please contact your variable product issuer or financial adviser for the most recent month-end variable product performance. Performance figures reflect Fund expenses, reinvested distributions and changes in net asset value. Investment return and principal value will fluctuate so that you may have a gain or loss when you sell shares.

     The net annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 1.11% and 1.36%, respectively.^1,2 The total annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 1.12% and 1.37%, respectively. The expense ratios presented above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

     AIM V.I. Capital Development Fund, a series portfolio of AIM Variable Insurance Funds, is currently offered through insurance companies issuing variable products. You cannot purchase shares of the Fund directly. Performance figures given represent the Fund and are not intended to reflect actual variable product values. They do not reflect sales charges, expenses and fees assessed in connection with a variable product. Sales charges, expenses and fees, which are determined by the variable product issuers, will vary and will lower the total return.

     The most recent month-end performance data at the Fund level, excluding variable product charges, is available on the Invesco Aim automated information line, 866 702 4402. As mentioned above, for the most recent month-end performance including variable product charges, please contact your variable product issuer or financial adviser.

1	Total annual operating expenses less any contractual fee waivers by the adviser in effect through at least April 30, 2011. See current prospectus for more information.
2	Total annual operating expenses less any contractual fee waivers and/or expense reimbursements by the adviser in effect through at least June 30, 2010. See current prospectus for more information.

AIM V.I. Capital Development Fund

AIM V.I. Capital Development Fund’s investment objective is long-term growth of capital.

n Unless otherwise stated, information presented in this report is as of December 31, 2009, and is based on total net assets.

n Unless otherwise noted, all data provided by Invesco.

Principal risks of investing in the Fund

Prices of equity securities change in response to many factors, including the historical and prospective earnings of the issuer, the value of its assets, general economic conditions, interest rates, investor perceptions and market

     The Fund invests in “growth” stocks, which may be more volatile than other investment styles because growth stocks are more sensitive to investor perceptions of an issuing company’s growth potential.

     There is no guarantee that the investment techniques and risk analysis used by the Fund’s portfolio managers will produce the desired results.

     Stocks fall into three broad market capitalization categories — large, medium, and small. Investing primarily in one category carries the risk that, due to current market conditions, that category may be out of favor with investors. Small and mid-sized companies may tend to be more vulnerable to adverse developments and more volatile than larger companies. Investments in small and mid-sized companies may involve special risks, including those associated with dependence on a small management group, little of no operating history, little or no track record of success, and limited product lines, market and financial resources. Also, there may be less publicly available information about the issuers of the securities or less market interest in such securities than in the case of larger companies, each of which can cause significant price volatility. The securities of small and mid-sized companies may be illiquid, restricted as to resale, or may trade less frequently and in smaller volume than more widely held securities, which may make it difficult for fund to establish or close out a position in these securities at prevailing market prices.

     The prices of securities held by the Fund may decline in response to market risks.

     The Fund may engage in active and frequent trading of portfolio securities to achieve its investment objective. If a fund does trade in this way, it may incur increased costs, which can lower the actual return of the fund. Active trading may also increase short term gains and losses, which may affect taxes that must be paid.

     The prices of initial public offering (IPO) securities may go up and down more than prices of equity securities of companies with longer trading histories. In addition, companies offering securities in IPOs may have less experienced management or limited operating histories. There can be no assurance that the Fund will have favorable IPO investment opportunities.

About indexes used in this report

The S&P 500^® Index is an unmanaged index considered representative of the U.S. stock market.

     The Russell Midcap^® Growth Index is an unmanaged index considered representative of mid-cap growth stocks. The Russell Midcap Growth Index is a trademark/service mark of the Frank Russell Co. Russell^® is a trademark of the Frank Russell Co.

     The Lipper VUF Mid-Cap Growth Funds Index is an unmanaged index considered representative of mid-cap growth variable insurance underlying funds tracked by Lipper.

     The Fund is not managed to track the performance of any particular index, including the indexes defined here, and consequently, the performance of the Fund may deviate significantly from the performance of the indexes.

     A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group reflects fund expenses; performance of a market index does not.

Other information

The Chartered Financial Analyst^® (CFA^®) designation is globally recognized and attests to a charterholder’s success in a rigorous and comprehensive study program in the field of investment management and research analysis.

     The returns shown in management’s discussion of Fund performance are based on net asset values calculated for shareholder transactions. Generally accepted accounting principles require adjustments to be made to the net assets of the Fund at period end for financial reporting purposes, and as such, the net asset values for shareholder transactions and the returns based on those net asset values may differ from the net asset values and returns reported in the Financial Highlights. Additionally, the returns and net asset values shown throughout this report are at the Fund level only and do not include variable product issuer charges. If such charges were included, the total returns would be lower.

     Industry classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s.

AIM V.I. Capital Development Fund

Schedule of Investments^(a)

December 31, 2009

	Shares		Value
Common Stocks & Other Equity Interests–97.19%
Aerospace & Defense–1.05%
Goodrich Corp.		28,802	$	1,850,529
Air Freight & Logistics–0.90%
C.H. Robinson Worldwide, Inc.		26,971		1,584,007
Apparel Retail–2.00%
American Eagle Outfitters, Inc.		99,524		1,689,918
Ross Stores, Inc.		42,885		1,831,618
				3,521,536
Apparel, Accessories & Luxury Goods–3.53%
Carter’s, Inc.(b)		78,781		2,068,001
Coach, Inc.		56,508		2,064,237
Hanesbrands, Inc.(b)		86,686		2,090,000
				6,222,238
Application Software–3.68%
Adobe Systems Inc.(b)		50,358		1,852,167
Autodesk, Inc.(b)		85,389		2,169,735
Solera Holdings Inc.		68,339		2,460,887
				6,482,789
Asset Management & Custody Banks–1.94%
Affiliated Managers Group, Inc.(b)		32,192		2,168,131
State Street Corp.		28,740		1,251,340
				3,419,471
Automotive Retail–0.42%
Advance Auto Parts, Inc.		18,203		736,857
Biotechnology–2.26%
Talecris Biotherapeutics Holdings Corp.(b)		83,972		1,870,056
United Therapeutics Corp.(b)		40,115		2,112,055
				3,982,111
Casinos & Gaming–0.90%
International Game Technology		84,319		1,582,668
Coal & Consumable Fuels–1.15%
CONSOL Energy Inc.		40,573		2,020,535
Communications Equipment–0.76%
Brocade Communications Systems, Inc.(b)		174,273		1,329,703
Lantronix Inc.–Wts., expiring 02/09/11(c)		576		0
				1,329,703
	Shares
Computer Storage & Peripherals–3.33%
NetApp, Inc.(b)		57,585		1,980,348
QLogic Corp.(b)		96,236		1,815,973
Western Digital Corp.(b)		46,770		2,064,896
				5,861,217
Construction, Farm Machinery & Heavy Trucks–0.55%
Bucyrus International, Inc.		17,049		961,052
Consumer Finance–0.50%
Discover Financial Services		59,618		876,981
Data Processing & Outsourced Services–1.32%
Alliance Data Systems Corp.(b)(d)		35,904		2,319,039
Department Stores–2.43%
Macy’s, Inc.		103,933		1,741,917
Nordstrom, Inc.		67,422		2,533,719
				4,275,636
Distributors–1.09%
LKQ Corp.(b)		97,860		1,917,077
Diversified Metals & Mining–2.00%
Freeport-McMoRan Copper & Gold Inc.		16,462		1,321,734
Walter Energy, Inc.		29,197		2,198,826
				3,520,560
Diversified Support Services–1.16%
Copart, Inc.(b)		55,916		2,048,203
Education Services–2.90%
Apollo Group, Inc.–Class A(b)		27,885		1,689,273
Capella Education Co.(b)		24,927		1,877,003
ITT Educational Services, Inc.(b)		16,059		1,541,022
				5,107,298
Electrical Components & Equipment–2.15%
Cooper Industries PLC (Ireland)		45,271		1,930,355
Regal-Beloit Corp.		35,734		1,856,024
				3,786,379
Electronic Components–1.13%
Amphenol Corp.–Class A		43,152		1,992,759
Environmental & Facilities Services–0.97%
Republic Services, Inc.		60,408		1,710,151
Fertilizers & Agricultural Chemicals–1.17%
Intrepid Potash, Inc.(b)		70,518		2,057,010

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

AIM V.I. Capital Development Fund

	Shares		Value
Health Care Equipment–2.14%
American Medical Systems Holdings, Inc.(b)		104,955	$	2,024,582
NuVasive, Inc.(b)		19,641		628,119
ResMed Inc.–CDI(b)		210,407		1,120,771
				3,773,472
Health Care Facilities–1.34%
Psychiatric Solutions, Inc.(b)		45,463		961,088
VCA Antech, Inc.(b)		55,896		1,392,928
				2,354,016
Health Care Services–1.62%
Express Scripts, Inc.(b)		19,525		1,687,936
Fresenius Medical Care AG & Co. KGaA–ADR (Germany)		22,007		1,166,591
				2,854,527
Hotels, Resorts & Cruise Lines–1.06%
Marriott International, Inc.–Class A		68,755		1,873,574
Household Products–1.46%
Church & Dwight Co., Inc.		15,002		906,871
Energizer Holdings, Inc.(b)		27,133		1,662,710
				2,569,581
Housewares & Specialties–1.32%
Jarden Corp.		75,025		2,319,023
Human Resource & Employment Services–1.04%
Robert Half International, Inc.		68,799		1,838,997
Independent Power Producers & Energy Traders–1.33%
KGEN Power Corp. (Acquired 01/12/07; Cost $2,219,196)(b)(e)		158,514		951,084
NRG Energy, Inc.(b)		59,064		1,394,501
				2,345,585
Industrial Machinery–0.45%
Flowserve Corp.		8,317		786,206
Investment Banking & Brokerage–2.04%
Lazard Ltd.–Class A		42,533		1,614,978
TD Ameritrade Holding Corp.(b)		102,238		1,981,372
				3,596,350
IT Consulting & Other Services–1.48%
Cognizant Technology Solutions Corp.–Class A(b)		57,695		2,613,584
Life & Health Insurance–2.18%
Aflac, Inc.		43,536		2,013,540
Lincoln National Corp.		73,522		1,829,227
				3,842,767
	Shares
Life Sciences Tools & Services–1.65%
Pharmaceutical Product Development, Inc.		50,708		1,188,596
Thermo Fisher Scientific, Inc.(b)		35,938		1,713,883
				2,902,479
Managed Health Care–1.56%
Aetna Inc.		56,956		1,805,505
Aveta, Inc. (Acquired 12/21/05-02/21/06; Cost $2,162,718)(b)(e)		157,251		943,506
				2,749,011
Marine–0.49%
Genco Shipping & Trading Ltd.(b)(d)		38,308		857,333
Metal & Glass Containers–1.01%
Owens-Illinois, Inc.(b)		54,188		1,781,160
Multi-Line Insurance–1.00%
Genworth Financial Inc.–Class A(b)		154,761		1,756,537
Oil & Gas Drilling–1.08%
Noble Corp.		46,664		1,899,225
Oil & Gas Equipment & Services–3.38%
Baker Hughes Inc.		40,209		1,627,660
Core Laboratories N.V. (Netherlands)		12,074		1,426,181
Key Energy Services, Inc.(b)		217,389		1,910,849
Petroleum Geo-Services A.S.A. (Norway)(b)		87,725		995,160
				5,959,850
Oil & Gas Exploration & Production–4.92%
Cabot Oil & Gas Corp.		42,921		1,870,926
Continental Resources, Inc.(b)		76,864		3,296,697
SandRidge Energy, Inc.(b)		172,639		1,627,986
Southwestern Energy Co.(b)		38,679		1,864,328
				8,659,937
Personal Products–1.01%
Estee Lauder Cos. Inc. (The)–Class A		36,759		1,777,665
Pharmaceuticals–0.63%
Shire PLC–ADR (United Kingdom)		19,011		1,115,946
Real Estate Services–1.12%
CB Richard Ellis Group, Inc.–Class A(b)		145,736		1,977,638
Research & Consulting Services–2.17%
Equifax Inc.		56,021		1,730,489
IHS Inc.–Class A(b)		38,204		2,093,961
				3,824,450
Security & Alarm Services–1.05%
Corrections Corp. of America(b)		75,092		1,843,509

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

AIM V.I. Capital Development Fund

	Shares		Value
Semiconductor Equipment–2.61%
ASML Holding N.V.–New York Shares (Netherlands)		59,763	$	2,037,321
KLA-Tencor Corp.		70,597		2,552,787
				4,590,108
Semiconductors–5.88%
Altera Corp.		96,891		2,192,643
Avago Technologies Ltd. (Singapore)(b)		107,142		1,959,627
Marvell Technology Group Ltd.(b)		119,080		2,470,910
ON Semiconductor Corp.(b)		210,952		1,858,487
Xilinx, Inc.		74,579		1,868,950
				10,350,617
Specialty Chemicals–0.99%
Albemarle Corp.		48,002		1,745,833
Steel–0.56%
Steel Dynamics, Inc.		55,745		987,801
Systems Software–2.57%
Check Point Software Technologies Ltd. (Israel)(b)		71,751		2,430,924
McAfee Inc.(b)		51,708		2,097,794
				4,528,718
Tires & Rubber–1.03%
Goodyear Tire & Rubber Co. (The)(b)		128,749		1,815,361
Trading Companies & Distributors–2.04%
MSC Industrial Direct Co., Inc.–Class A		37,957		1,783,979
W.W. Grainger, Inc.		18,738		1,814,401
				3,598,380
Trucking–2.50%
Con-way Inc.		43,793		1,528,814
Heartland Express, Inc.		86,108		1,314,869
J.B. Hunt Transport Services, Inc.		48,459		1,563,772
				4,407,455
Wireless Telecommunication Services–1.19%
American Tower Corp.–Class A(b)		48,518		2,096,463
Total Common Stocks & Other Equity Interests (Cost $131,666,859)				171,158,964
Money Market Funds–2.83%
Liquid Assets Portfolio–Institutional Class(f)		2,492,651		2,492,651
Premier Portfolio–Institutional Class(f)		2,492,651		2,492,651
Total Money Market Funds (Cost $4,985,302)				4,985,302
TOTAL INVESTMENTS (excluding investments purchased with cash collateral from securities on loan)–100.02% (Cost $136,652,161)				176,144,266
Investments Purchased with Cash Collateral from Securities on Loan
Money Market Funds–1.14%
Liquid Assets Portfolio–Institutional Class (Cost $2,007,347)(f)(g)		2,007,347		2,007,347
TOTAL INVESTMENTS–101.16% (Cost $138,659,508)				178,151,613
OTHER ASSETS LESS LIABILITIES–(1.16)%				(2,044,890	)
NET ASSETS–100.00%			$	176,106,723

Investment Abbreviations:

ADR	– American Depositary Receipt
CDI	– Chess Depositary Instruments
Wts.	– Warrants

Notes to Schedule of Investments:

(a)	Industry and/or sector classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s.
(b)	Non-income producing security.
(c)	Non-income producing security acquired through a corporate action.
(d)	All or a portion of this security was out on loan at December 31, 2009.
(e)	Security purchased or received in a transaction exempt from registration under the Securities Act of 1933, as amended. The security may be resold pursuant to an exemption from registration under the 1933 Act, typically to qualified institutional buyers. The aggregate value of these securities at December 31, 2009 was $1,894,590, which represented 1.08% of the Fund’s Net Assets.
(f)	The money market fund and the Fund are affiliated by having the same investment adviser.
(g)	The security has been segregated to satisfy the commitment to return the cash collateral received in securities lending transactions upon the borrower’s return of the securities loaned. See Note 1I.

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

AIM V.I. Capital Development Fund

Statement of Assets and Liabilities

December 31, 2009

Assets:
Investments, at value (Cost $131,666,859)*	$	171,158,964
Investments in affiliated money market funds, at value and cost		6,992,649
Total investments, at value (Cost $138,659,508)		178,151,613
Receivables for:
Fund shares sold		317,798
Dividends		84,243
Investment for trustee deferred compensation and retirement plans		27,039
Total assets		178,580,693
Liabilities:
Payables for:
Fund shares reacquired		175,230
Amount due custodian		39,972
Collateral upon return of securities loaned		2,007,347
Accrued fees to affiliates		168,677
Accrued other operating expenses		35,447
Trustee deferred compensation and retirement plans		47,297
Total liabilities		2,473,970
Net assets applicable to shares outstanding	$	176,106,723
Net assets consist of:
Shares of beneficial interest	$	213,236,580
Undistributed net investment income (loss)		(49,367	)
Undistributed net realized gain (loss)		(76,572,595	)
Unrealized appreciation		39,492,105
	$	176,106,723
Net Assets:
Series I	$	81,866,013
Series II	$	94,240,710
Shares outstanding, $0.001 par value per share, unlimited number of shares authorized:
Series I		7,249,202
Series II		8,574,846
Series I:
Net asset value per share	$	11.29
Series II:
Net asset value per share	$	10.99

*  At December 31, 2009, securities with an aggregate value of $1,953,483 were on loan to brokers.

Statement of Operations

For the year ended December 31, 2009

Investment income:
Dividends (net of foreign withholding taxes of $17,012)	$	1,037,943
Dividends from affiliated money market funds (includes securities lending income of $11,811)		34,187
Total investment income		1,072,130
Expenses:
Advisory fees		1,170,016
Administrative services fees		432,015
Custodian fees		17,979
Distribution fees — Series II		212,310
Transfer agent fees		32,044
Trustees’ and officers’ fees and benefits		24,628
Other		55,195
Total expenses		1,944,187
Less: Fees waived		(13,027	)
Net expenses		1,931,160
Net investment income (loss)		(859,030	)
Realized and unrealized gain (loss) from:
Net realized gain (loss) from:
Investment securities (includes net gains (losses) from securities sold to affiliates of $(178,242))		(13,260,577	)
Foreign currencies		(1,151	)
		(13,261,728	)
Change in net unrealized appreciation (depreciation) of:
Investment securities		69,400,504
Foreign currencies		(46	)
		69,400,458
Net realized and unrealized gain		56,138,730
Net increase in net assets resulting from operations	$	55,279,700

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

AIM V.I. Capital Development Fund

Statement of Changes in Net Assets

For the years ended December 31, 2009 and 2008

	2009			2008
Operations:
Net investment income (loss)	$	(859,030	)	$	(1,261,640	)
Net realized gain (loss)		(13,261,728	)		(60,191,471	)
Change in net unrealized appreciation (depreciation)		69,400,458			(79,981,636	)
Net increase (decrease) in net assets resulting from operations		55,279,700			(141,434,747	)
Distributions to shareholders from net realized gains:
Series I		—			(12,491,698	)
Series II		—			(16,383,949	)
Total distributions from net realized gains		—			(28,875,647	)
Share transactions-net:
Series I		(5,484,404	)		(13,664,818	)
Series II		(16,147,547	)		(14,156,607	)
Net increase (decrease) in net assets resulting from share transactions		(21,631,951	)		(27,821,425	)
Net increase (decrease) in net assets		33,647,749			(198,131,819	)
Net assets:
Beginning of year		142,458,974			340,590,793
End of year (includes undistributed net investment income (loss) of $(49,367) and $(51,174), respectively)	$	176,106,723		$	142,458,974

Notes to Financial Statements

December 31, 2009

NOTE 1—Significant Accounting Policies

AIM V.I. Capital Development Fund (the “Fund”) is a series portfolio of AIM Variable Insurance Funds (the “Trust”). The Trust is a Delaware statutory trust registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end series management investment company consisting of twenty-one separate portfolios, (each constituting a “Fund”). The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Matters affecting each Fund or class will be voted on exclusively by the shareholders of such Fund or class. Current Securities and Exchange Commission (“SEC”) guidance, however, requires participating insurance companies offering separate accounts to vote shares proportionally in accordance with the instructions of the contract owners whose investments are funded by shares of each Fund or class.

  The Fund’s investment objective is long-term growth of capital.

  The Fund currently offers two classes of shares, Series I and Series II, both of which are offered to insurance company separate accounts funding variable annuity contracts and variable life insurance policies (“variable products”).

  The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements.

A.	Security Valuations — Securities, including restricted securities, are valued according to the following policy.
	A security listed or traded on an exchange (except convertible bonds) is valued at its last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales or official closing price on a particular day, the security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based on prices furnished by independent pricing services or market makers. When such securities are valued by an independent pricing service they may be considered fair valued. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean between the last bid and ask prices from the exchange on which they are principally traded. Options not listed on an exchange are valued by an independent source at the mean between the last bid and ask prices. For purposes of determining net asset value per share, futures and option contracts generally are valued 15 minutes after the close of the customary trading session of the New York Stock Exchange (“NYSE”).
	Investments in open-end and closed-end registered investment companies that do not trade on an exchange are valued at the end of day net asset value per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded.
	Debt obligations (including convertible bonds) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution-size trading in similar groups of securities, developments related to specific securities, dividend rate, yield, quality, type of issue, coupon rate,

AIM V.I. Capital Development Fund

	maturity, individual trading characteristics and other market data. Short-term obligations, including commercial paper, having 60 days or less to maturity are recorded at amortized cost which approximates value. Debt securities are subject to interest rate and credit risks. In addition, all debt securities involve some risk of default with respect to interest and/or principal payments.
	Foreign securities (including foreign exchange contracts) are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the NYSE. If market quotations are available and reliable for foreign exchange traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that are significant and make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economical upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
	Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities and Corporate Loans. The mean between the last bid and asked prices may be used to value debt obligations other than Corporate Loans.
	Securities for which market quotations are not readily available or are unreliable are valued at fair value as determined in good faith by or under the supervision of the Trust’s officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a security’s fair value.
	Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
B.	Securities Transactions and Investment Income — Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income is recorded on the accrual basis from settlement date. Dividend income is recorded on the ex-dividend date.
	The Fund may periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain/loss for investments no longer held and as unrealized gain/loss for investments still held.
	Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the realized and unrealized net gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the Fund’s net asset value and, accordingly, they reduce the Fund’s total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in the Statement of Operations and Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the adviser.
	The Fund allocates income and realized and unrealized capital gains and losses to a class based on the relative net assets of each class.
C.	Country Determination — For the purposes of making investment selection decisions and presentation in the Schedule of Investments, the investment adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuer’s securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted.
D.	Distributions — Distributions from income and net realized capital gain, if any, are generally paid to separate accounts of participating insurance companies annually and recorded on ex-dividend date.
E.	Federal Income Taxes — The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code necessary to qualify as a regulated investment company and to distribute substantially all of the Fund’s taxable earnings to shareholders. As such, the Fund will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements.
	The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.
F.	Expenses — Fees provided for under the Rule 12b-1 plan of a particular class of the Fund and which are directly attributable to that class are charged to the operations of such class. All other expenses are allocated among the classes based on relative net assets.
G.	Accounting Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual

AIM V.I. Capital Development Fund

	results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print, which is generally 45 days from the period-end date.
H.	Indemnifications — Under the Trust’s organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Fund’s servicing agreements, that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote.
I.	Securities Lending — The Fund may lend portfolio securities having a market value up to one-third of the Fund’s total assets. Such loans are secured by collateral equal to no less than the market value of the loaned securities determined daily by the securities lending provider. Such collateral will be cash or debt securities issued or guaranteed by the U.S. Government or any of its sponsored agencies. Cash collateral received in connection with these loans is invested in short-term money market instruments or affiliated money market funds and is shown as such on the Schedule of Investments. It is the Fund’s policy to obtain additional collateral from or return excess collateral to the borrower by the end of the next business day, following the valuation date of the securities loaned. Therefore, the value of the collateral held may be temporarily less than the value of the securities on loan. Lending securities entails a risk of loss to the Fund if and to the extent that the market value of the securities loaned were to increase and the borrower did not increase the collateral accordingly, and the borrower fails to return the securities. Upon the failure of the borrower to return the securities, collateral may be liquidated and the securities may be purchased on the open market to replace the loaned securities. The Fund could experience delays and costs in gaining access to the collateral. The Fund bears the risk of any deficiency in the amount of the collateral available for return to the borrower due to any loss on the collateral invested. Dividends received on cash collateral investments for securities lending transactions, which are net of compensation to counterparties, is included in Dividends from affiliates on the Statement of Operations. The aggregate value of securities out on loan is shown as a footnote on the Statement of Assets and Liabilities, if any.
J.	Foreign Currency Translations — Foreign currency is valued at the close of the NYSE based on quotations posted by banks and major currency dealers. Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at date of valuation. Purchases and sales of portfolio securities (net of foreign taxes withheld on disposition) and income items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. The Fund does not separately account for the portion of the results of operations resulting from changes in foreign exchange rates on investments and the fluctuations arising from changes in market prices of securities held. The combined results of changes in foreign exchange rates and the fluctuation of market prices on investments (net of estimated foreign tax withholding) are included with the net realized and unrealized gain or loss from investments in the Statement of Operations. Reported net realized foreign currency gains or losses arise from (i) sales of foreign currencies, (ii) currency gains or losses realized between the trade and settlement dates on securities transactions, and (iii) the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign currency gains and losses arise from changes in the fair values of assets and liabilities, other than investments in securities at fiscal period end, resulting from changes in exchange rates.
	The Fund may invest in foreign securities which may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable.
K.	Foreign Currency Contracts — The Fund may enter into foreign currency contracts to manage or minimize currency or exchange rate risk. The Fund may also enter into foreign currency contracts for the purchase or sale of a security denominated in a foreign currency in order to “lock in” the U.S. dollar price of that security. A foreign currency contract is an obligation to purchase or sell a specific currency for an agreed-upon price at a future date. The use of foreign currency contracts does not eliminate fluctuations in the price of the underlying securities the Fund owns or intends to acquire but establishes a rate of exchange in advance. Fluctuations in the value of these contracts are measured by the difference in the contract date and reporting date exchange rates and are recorded as unrealized appreciation (depreciation) until the contracts are closed. When the contracts are closed, realized gains (losses) are recorded. Realized and unrealized gains (losses) on the contracts are included in the Statement of Operations. The primary risks associated with foreign currency contracts include failure of the counterparty to meet the terms of the contract and the value of the foreign currency changing unfavorably. These risks may be in excess of the amounts reflected in the Statement of Assets and Liabilities.

NOTE 2—Advisory Fees and Other Fees Paid to Affiliates

The Trust has entered into a master investment advisory agreement with Invesco Advisers, Inc. (the “Adviser” or “Invesco”). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Adviser based on the annual rate of the Fund’s average daily net assets as follows:

Average Net Assets	Rate
First $350 million		0	.75%
Over $350 million		0	.625%

AIM V.I. Capital Development Fund

  Through at least April 30, 2011, the Adviser has contractually agreed to waive advisory fees to the extent necessary so that the advisory fees payable by the Fund (based on the Fund’s average daily net assets) do not exceed the annual rate of:

Average Net Assets	Rate
First $250 million		0	.745%
Next $250 million		0	.73%
Next $500 million		0	.715%
Next $1.5 billion		0	.70%
Next $2.5 billion		0	.685%
Next $2.5 billion		0	.67%
Next $2.5 billion		0	.655%
Over $10 billion		0	.64%

  Under the terms of a master sub-advisory agreement approved by shareholders of the Funds between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Trimark Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Funds, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide discretionary investment management services to each Fund based on the percentage of assets allocated to such Sub-Adviser(s).

  On December 31, 2009, Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc., Invesco Private Asset Management, Inc. and Invesco Global Asset Management (N.A.), Inc. merged into Invesco Institutional (N.A.), Inc. and the consolidated adviser firm was renamed Invesco Advisers, Inc.

  The Adviser has contractually agreed to waive advisory fees and/or reimburse expenses of all shares to the extent necessary to limit total annual fund operating expenses after fee waiver (excluding certain items discussed below) of Series I shares to 1.30% and Series II shares to 1.45% of average daily net assets, through at least April 30, 2011. In determining the Adviser’s obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the total annual fund operating expenses after fee waiver to exceed the numbers reflected above: (1) interest; (2) taxes; (3) dividend expense on short sales; (4) extraordinary items or non-routine items; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. The Board of Trustees or Invesco may terminate the fee waiver arrangement at any time. The Adviser did not waive fees and/or reimburse expenses during the period under this expense limitation.

  Further, the Adviser has contractually agreed, through at least June 30, 2010, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash in such affiliated money market funds.

  For the year ended December 31, 2009, the Adviser waived advisory fees of $13,027.

  At the request of the Trustees of the Trust, Invesco Ltd. agreed to reimburse expenses incurred by the Fund in connection with market timing matters in the AIM Funds, which may include legal, audit, shareholder reporting, communications and trustee expenses. For the year ended December 31, 2009, Invesco Ltd. did not reimburse any expenses.

  The Trust has entered into a master administrative services agreement with Invesco pursuant to which the Fund has agreed to pay Invesco a fee for costs incurred in providing accounting services and fund administrative services to the Fund and to reimburse Invesco for administrative services fees paid to insurance companies that have agreed to provide services to the participants of separate accounts. These administrative services provided by the insurance companies may include, among other things: the printing of prospectuses, financial reports and proxy statements and the delivery of the same to existing participants; the maintenance of master accounts; the facilitation of purchases and redemptions requested by the participants; and the servicing of participants’ accounts. Pursuant to such agreement, for the year ended December 31, 2009, Invesco was paid $50,000 for accounting and fund administrative services and reimbursed $382,015 for services provided by insurance companies.

  The Trust has entered into a transfer agency and service agreement with Invesco Aim Investment Services, Inc. (“IAIS”) pursuant to which the Fund has agreed to pay IAIS a fee for providing transfer agency and shareholder services to the Fund and reimburse IAIS for certain expenses incurred by IAIS in the course of providing such services. For the year ended December 31, 2009, expenses incurred under the agreement are shown in the Statement of Operations as transfer agent fees.

  The Trust has entered into a master distribution agreement with Invesco Aim Distributors, Inc. (“IADI”) to serve as the distributor for the Fund. The Trust has adopted a plan pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund’s Series II shares (the “Plan”). The Fund, pursuant to the Plan, pays IADI compensation at the annual rate of 0.25% of the Fund’s average daily net assets of Series II shares. Of the Plan payments, up to 0.25% of the average daily net assets of the Series II shares may be paid to insurance companies who furnish continuing personal shareholder services to customers who purchase and own Series II shares of the Fund. For the year ended December 31, 2009, expenses incurred under the Plan are detailed in the Statement of Operations as distribution fees.

  Certain officers and trustees of the Trust are officers and directors of Invesco, IAIS and/or IADI.

AIM V.I. Capital Development Fund

NOTE 3—Additional Valuation Information

Generally Accepted Accounting Principles (“GAAP”) defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3) generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment’s assigned level:

Level 1 —	Prices are determined using quoted prices in an active market for identical assets.
Level 2 —	Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk and others.
Level 3 —	Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information.

  The following is a summary of the tiered valuation input levels, as of December 31, 2009. The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.

	Level 1		Level 2		Level 3		Total
Equity Securities	$	175,261,863	$	995,160	$	1,894,590	$	178,151,613

NOTE 4—Security Transactions with Affiliated Funds

The Fund is permitted to purchase or sell securities from or to certain other AIM Funds under specified conditions outlined in procedures adopted by the Board of Trustees of the Trust. The procedures have been designed to ensure that any purchase or sale of securities by the Fund from or to another fund or portfolio that is or could be considered an affiliate by virtue of having a common investment adviser (or affiliated investment advisers), common Trustees and/or common officers complies with Rule 17a-7 of the 1940 Act. Further, as defined under the procedures, each transaction is effected at the current market price. Pursuant to these procedures, for the year ended December 31, 2009, the Fund engaged in securities purchases of $742,152 and securities sales of $2,101,155, which resulted in net realized gains (losses) of $(178,242).

NOTE 5—Trustees’ and Officers’ Fees and Benefits

“Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and “Trustees’ and Officers’ Fees and Benefits” also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various AIM Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees are eligible to participate in a retirement plan that provides for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former Trustees who also participate in a retirement plan and receive benefits under such plan. “Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund.

  During the year ended December 31, 2009, the Fund paid legal fees of $3,124 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A member of that firm is a Trustee of the Trust.

NOTE 6—Cash Balances

The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with The State Street Bank and Trust Company, the custodian bank. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (i) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (ii) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.

AIM V.I. Capital Development Fund

NOTE 7—Distributions to Shareholders and Tax Components of Net Assets

Tax Character of Distributions to Shareholders Paid During the Years Ended December 31, 2009 and 2008:

	2009		2008
Ordinary income	$	—	$	3,219,994
Long-term capital gain		—		25,655,653
Total distributions	$	—	$	28,875,647

Tax Components of Net Assets at Period-End:

	2009
Net unrealized appreciation — investments	$	39,219,077
Temporary book/tax differences		(49,367	)
Capital loss carryforward		(76,299,567	)
Shares of beneficial interest		213,236,580
Total net assets	$	176,106,723

  The difference between book-basis and tax-basis unrealized appreciation (depreciation) is due to differences in the timing of recognition of gains and losses on investments for tax and book purposes. The Fund’s net unrealized appreciation difference is attributable primarily to wash sales.

  The temporary book/tax differences are a result of timing differences between book and tax recognition of income and/or expenses. The Fund’s temporary book/tax differences are the result of the trustee deferral of compensation and retirement plan benefits.

  Capital loss carryforward is calculated and reported as of a specific date. Results of transactions and other activity after that date may affect the amount of capital loss carryforward actually available for the Fund to utilize. The ability to utilize capital loss carryforward in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.

  The Fund has a capital loss carryforward as of December 31, 2009 which expires as follows:

	Capital Loss
Expiration	Carryforward*
December 31, 2016	$	49,840,811
December 31, 2017		26,458,756
Total capital loss carryforward	$	76,299,567

*  Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code.

NOTE 8—Investment Securities

The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the year ended December 31, 2009 was $153,584,890 and $174,276,569, respectively. Cost of investments on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed Federal income tax reporting period-end.

Unrealized Appreciation (Depreciation) of Investment Securities on a Tax Basis
Aggregate unrealized appreciation of investment securities	$	43,301,545
Aggregate unrealized (depreciation) of investment securities		(4,082,468	)
Net unrealized appreciation of investment securities	$	39,219,077
Cost of investments for tax purposes is $138,932,536.

NOTE 9—Reclassification of Permanent Differences

Primarily as a result of differing book/tax treatment of net operating losses, on December 31, 2009, undistributed net investment income (loss) was increased by $860,837, undistributed net realized gain (loss) was increased by $185,026 and shares of beneficial interest decreased by $1,045,863. This reclassification had no effect on the net assets of the Fund.

AIM V.I. Capital Development Fund

NOTE 10—Share Information

	Summary of Share Activity
	Year ended						Year ended
	December 31, 2009(a)						December 31, 2008
	Shares			Amount			Shares			Amount
Sold:
Series I		2,458,503		$	21,351,970			785,197		$	11,424,370
Series II		1,455,369			12,521,899			1,469,827			22,038,946
Issued as reinvestment of dividends:
Series I		—			—			1,624,408			12,491,698
Series II		—			—			2,184,526			16,383,949
Reacquired:
Series I		(3,021,088	)		(26,836,374	)		(2,542,695	)		(37,580,886	)
Series II		(3,276,615	)		(28,669,446	)		(3,554,464	)		(52,579,502	)
Net increase (decrease) in share activity		(2,383,831	)	$	(21,631,951	)		(33,201	)	$	(27,821,425	)

^(a) There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 66% of the outstanding shares of the Fund. The Fund and the Fund’s principal underwriter or adviser, are parties to participation agreements with these entities whereby these entities sell units of interest in separate accounts funding variable products that are invested in the Fund. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as, securities brokerage, third party record keeping and account servicing and administrative services. The Trust has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially.

NOTE 11—Financial Highlights

The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.

																						Ratio of			Ratio of
						Net gains																expenses			expenses
						(losses)																to average			to average net			Ratio of net
	Net asset		Net			on securities						Distributions										net assets			assets without			investment
	value,		investment			(both			Total from			from net			Net asset					Net assets,		with fee waivers			fee waivers			income (loss)
	beginning		income			realized and			investment			realized			value, end		Total			end of period		and/or expenses			and/or expenses			to average			Portfolio
	of period		(loss)			unrealized)			operations			gains			of period		Return(a)			(000s omitted)		absorbed			absorbed			net assets			turnover(b)
Series I
Year ended 12/31/09	$	7.93	$	(0.04	)(c)	$	3.40		$	3.36		$	—		$	11.29		42.37	%	$	81,866		1.10	%(d)		1.11	%(d)		(0.41	)%(d)		102	%
Year ended 12/31/08		18.85		(0.05	)(c)		(8.88	)		(8.93	)		(1.99	)		7.93		(47.03	)		61,986		1.10			1.11			(0.38	)		99
Year ended 12/31/07		18.43		(0.10	)(c)		2.14			2.04			(1.62	)		18.85		10.84			149,776		1.05			1.06			(0.47	)		109
Year ended 12/31/06		16.09		(0.07	)		2.73			2.66			(0.32	)		18.43		16.52			148,668		1.08			1.09			(0.48	)		119
Year ended 12/31/05		14.68		(0.04	)		1.45			1.41			—			16.09		9.61			117,674		1.09			1.09			(0.22	)		125
Series II
Year ended 12/31/09		7.74		(0.06	)(c)		3.31			3.25			—			10.99		41.99			94,241		1.35	(d)		1.36	(d)		(0.66	)(d)		102
Year ended 12/31/08		18.53		(0.09	)(c)		(8.71	)		(8.80	)		(1.99	)		7.74		(47.13	)		80,473		1.35			1.36			(0.63	)		99
Year ended 12/31/07		18.19		(0.15	)(c)		2.11			1.96			(1.62	)		18.53		10.55			190,815		1.30			1.31			(0.72	)		109
Year ended 12/31/06		15.92		(0.10	)		2.69			2.59			(0.32	)		18.19		16.26			128,990		1.33			1.34			(0.73	)		119
Year ended 12/31/05		14.57		(0.07	)		1.42			1.35			—			15.92		9.27			83,388		1.34			1.34			(0.47	)		125

(a)	Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Total returns do not reflect charges assessed in connection with a variable product, which if included would reduce total returns.
(b)	Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable.
(c)	Calculated using average shares outstanding.
(d)	Ratios are based on average daily net assets (000’s omitted) of $71,078 and $84,924 for Series I and Series II shares, respectively.

AIM V.I. Capital Development Fund

Report of Independent Registered Public Accounting Firm

To the Board of Trustees of AIM Variable Insurance Funds

and Shareholders of AIM V.I. Capital Development Fund:

In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of AIM V.I. Capital Development Fund, (one of the funds constituting AIM Variable Insurance Funds, hereafter referred to as the “Fund”) at December 31, 2009, and the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at December 31, 2009 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP

February 10, 2010

Houston, Texas

AIM V.I. Capital Development Fund

Calculating your ongoing Fund expenses

Example

As a shareholder of the Fund, you incur ongoing costs, including management fees; distribution and/or service fees (12b-1); and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period July 1, 2009, through December 31, 2009.

  The actual and hypothetical expenses in the examples below do not represent the effect of any fees or other expenses assessed in connection with a variable product; if they did, the expenses shown would be higher while the ending account values shown would be lower.

Actual expenses

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

Hypothetical example for comparison purposes

The table below also provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return.

  The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

  Please note that the expenses shown in the table are meant to highlight your ongoing costs. Therefore, the hypothetical information is useful in comparing ongoing costs, and will not help you determine the relative total costs of owning different funds.

							HYPOTHETICAL
							(5% annual return before
			ACTUAL				expenses)
	Beginning		Ending		Expenses		Ending		Expenses		Annualized
	Account Value		Account Value		Paid During		Account Value		Paid During		Expense
Class	(07/01/09)		(12/31/09)1		Period2		(12/31/09)		Period2		Ratio
Series I	$	1,000.00	$	1,265.70	$	6.28	$	1,019.66	$	5.60		1.10	%
Series II		1,000.00		1,264.70		7.71		1,018.40		6.87		1.35

1	The actual ending account value is based on the actual total return of the Fund for the period July 1, 2009 through December 31, 2009, after actual expenses and will differ from the hypothetical ending account value which is based on the Fund’s expense ratio and a hypothetical annual return of 5% before expenses.
2	Expenses are equal to the Fund’s annualized expense ratio as indicated above multiplied by the average account value over the period, multiplied by 184/365 to reflect the most recent fiscal half year.

AIM V.I. Capital Development Fund

Trustees and Officers

The address of each trustee and officer of AIM Variable Insurance Funds (the “Trust”), is 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173. Each trustee oversees 105 portfolios in the AIM Funds complex. The trustees serve for the life of the Trust, subject to their earlier death, incapacitation, resignation, retirement or removal as more specifically provided in the Trust’s organizational documents. Each officer serves for a one year term or until their successors are elected and qualified. Column two below includes length of time served with predecessor entities, if any.

	Trustee and/
Name, Year of Birth and	or Officer	Principal Occupation(s)	Other Directorship(s)
Position(s) Held with the Trust	Since	During Past 5 Years	Held by Trustee
Interested Persons
Martin L. Flanagan1 — 1960 Trustee	2007	Executive Director, Chief Executive Officer and President, Invesco Ltd. (ultimate parent of Invesco Aim and a global investment management firm); Adviser to the Board, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Trustee, The AIM Family of Funds®; Board of Governors, Investment Company Institute; and Member of Executive Board, SMU Cox School of Business	None
		Formerly: Chairman, Invesco Aim Advisors, Inc. (registered investment adviser); Director, Chairman, Chief Executive Officer and President, IVZ Inc. (holding company), INVESCO Group Services, Inc. (service provider) and Invesco North American Holdings, Inc. (holding company); Director, Chief Executive Officer and President, Invesco Holding Company Limited (parent of Invesco Aim and a global investment management firm); Director, Invesco Ltd.; Chairman and Vice Chairman, Investment Company Institute
Philip A. Taylor2 — 1954 Trustee, President and Principal Executive Officer	2006	Head of North American Retail and Senior Managing Director, Invesco Ltd.; Director, Co-Chairman, Co-President and Co- Chief Executive Officer, Invesco Advisers, inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Director, Chief Executive Officer and President, Invesco Aim Advisors, Inc. and 1371 Preferred Inc. (holding company); Director, Chairman, Chief Executive Officer and President, Invesco Aim Management Group, Inc. (financial services holding company); Director, Co-Chairman, Co-President and Co-Chief Executive Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Director and President, INVESCO Funds Group, Inc. (registered investment adviser and registered transfer agent) and AIM GP Canada Inc. (general partner for limited partnerships); Director, Invesco Aim Distributors, Inc. (registered broker dealer); Director and Chairman, Invesco Aim Investment Services, Inc. (registered transfer agent) and INVESCO Distributors, Inc. (registered broker dealer); Director, President and Chairman, INVESCO Inc. (holding company) and Invesco Canada Holdings Inc. (holding company); Chief Executive Officer, AIM Trimark Corporate Class Inc. (corporate mutual fund company) and AIM Trimark Canada Fund Inc. (corporate mutual fund company); Director and Chief Executive Officer, Invesco Trimark Ltd./Invesco Trimark Ltèe (registered investment adviser and registered transfer agent) and Invesco Trimark Dealer Inc. (registered broker dealer); Trustee, President and Principal Executive Officer, The AIM Family of Funds® (other than AIM Treasurer’s Series Trust and Short-Term Investments Trust); Trustee and Executive Vice President, The AIM Family of Funds® (AIM Treasurer’s Series Trust and Short-Term Investments Trust only); and Manager, Invesco PowerShares Capital Management LLC Formerly: Manager, Invesco PowerShares Capital Management LLC; Director, Chief Executive Officer and President, Invesco Aim Advisors, Inc.; Director, Chairman, Chief Executive Officer and President, Invesco Aim Capital Management, Inc.; President, Invesco Trimark Dealer Inc. and Invesco Trimark Ltd./Invesco Trimark Ltèe; Director and President, AIM Trimark Corporate Class Inc. and AIM Trimark Canada Fund Inc.; Senior Managing Director, Invesco Holding Company Limited; Trustee and Executive Vice President, Tax-Free Investments Trust; Director and Chairman, Fund Management Company (former registered broker dealer); President and Principal Executive Officer, The AIM Family of Funds® (AIM Treasurer’s Series Trust, Short-Term Investments Trust and Tax-Free Investments Trust only); President, AIM Trimark Global Fund Inc. and AIM Trimark Canada Fund Inc.	None
Independent Trustees
Bruce L. Crockett — 1944 Trustee and Chair	1993	Chairman, Crockett Technology Associates (technology consulting company)	ACE Limited (insurance company); Captaris, Inc. (unified messaging provider); and Investment Company Institute
Bob R. Baker — 1936 Trustee	2004	Retired	None
Frank S. Bayley — 1939 Trustee	2001	Retired Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios)	None
James T. Bunch — 1942 Trustee	2004	Founder, Green, Manning & Bunch Ltd., (investment banking firm)	Board of Governors, Western Golf Association/Evans Scholars Foundation and Executive Committee, United States Golf Association
Albert R. Dowden — 1941 Trustee	2000	Director of a number of public and private business corporations, including the Boss Group, Ltd. (private investment and management); Reich & Tang Funds (registered investment company); and Homeowners of America Holding Corporation/Homeowners of America Insurance Company (property casualty company) Formerly: Director, Continental Energy Services, LLC (oil and gas pipeline service); Director, CompuDyne Corporation (provider of product and services to the public security market) and Director, Annuity and Life Re (Holdings), Ltd. (reinsurance company); Director, President and Chief Executive Officer, Volvo Group North America, Inc.; Senior Vice President, AB Volvo; Director of various public and private corporations	Board of Nature’s Sunshine Products, Inc.
Jack M. Fields — 1952 Trustee	1997	Chief Executive Officer, Twenty First Century Group, Inc. (government affairs company); and Owner and Chief Executive Officer, Dos Angelos Ranch, L.P. (cattle, hunting, corporate entertainment), Discovery Global Education Fund (non-profit) and Cross Timbers Quail Research Ranch (non-profit) Formerly: Chief Executive Officer, Texana Timber LP (sustainable forestry company)	Administaff
Carl Frischling — 1937 Trustee	1993	Partner, law firm of Kramer Levin Naftalis and Frankel LLP	Director, Reich & Tang Funds (16 portfolios)
Prema Mathai-Davis — 1950 Trustee	1998	Retired	None
Lewis F. Pennock — 1942 Trustee	1993	Partner, law firm of Pennock & Cooper	None
Larry Soll — 1942 Trustee	2004	Retired	None
Raymond Stickel, Jr. — 1944 Trustee	2005	Retired Formerly: Director, Mainstay VP Series Funds, Inc. (25 portfolios)	None

1	Mr. Flanagan is considered an interested person of the Trust because he is an officer of the adviser to the Trust, and an officer and a director of Invesco Ltd., ultimate parent of the adviser to the Trust.
2	Mr. Taylor is considered an interested person of the Trust because he is an officer and a director of the adviser to, and a director of the principal underwriter of, the Trust.

T-1

Trustees and Officers — (continued)

	Trustee and/
Name, Year of Birth and	or Officer	Principal Occupation(s)	Other Directorship(s)
Position(s) Held with the Trust	Since	During Past 5 Years	Held by Trustee
Other Officers
Russell C. Burk — 1958 Senior Vice President and Senior Officer	2005	Senior Vice President and Senior Officer of The AIM Family of Funds®	N/A
John M. Zerr — 1962 Senior Vice President, Chief Legal Officer and Secretary	2006	Director, Senior Vice President, Secretary and General Counsel, Invesco Aim Management Group, Inc., Senior Vice President, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Director, Senior Vice President and Secretary, Invesco Aim Distributors, Inc.; Director, Vice President and Secretary, Invesco Aim Investment Services, Inc. and INVESCO Distributors, Inc.; Director and Vice President, INVESCO Funds Group, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The AIM Family of Funds®; and Manager, Invesco PowerShares Capital Management LLC	N/A
		Formerly: Director, Senior Vice President, General Counsel and Secretary, Invesco Aim Advisors, Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco Aim Capital Management, Inc.; Chief Operating Officer and General Counsel, Liberty Ridge Capital, Inc. (an investment adviser); Vice President and Secretary, PBHG Funds (an investment company) and PBHG Insurance Series Fund (an investment company); Chief Operating Officer, General Counsel and Secretary, Old Mutual Investment Partners (a broker-dealer); General Counsel and Secretary, Old Mutual Fund Services (an administrator) and Old Mutual Shareholder Services (a shareholder servicing center); Executive Vice President, General Counsel and Secretary, Old Mutual Capital, Inc. (an investment adviser); and Vice President and Secretary, Old Mutual Advisors Funds (an investment company)
Lisa O. Brinkley — 1959 Vice President	2004	Global Compliance Director, Invesco Ltd.; Chief Compliance Officer, Invesco Aim Distributors, Inc. and Invesco Aim Investment Services, Inc.; and Vice President, The AIM Family of Funds®	N/A
		Formerly: Senior Vice President, Invesco Aim Management Group, Inc.; Senior Vice President and Chief Compliance Officer, Invesco Aim Advisors, Inc. and The AIM Family of Funds®; Vice President and Chief Compliance Officer, Invesco Aim Capital Management, Inc. and Invesco Aim Distributors, Inc.; Vice President, Invesco Aim Investment Services, Inc. and Fund Management Company
Kevin M. Carome — 1956 Vice President	2003	General Counsel, Secretary and Senior Managing Director, Invesco Ltd.; Director, Invesco Holding Company Limited and INVESCO Funds Group, Inc.; Director and Executive Vice President, IVZ, Inc., Invesco Group Services, Inc., Invesco North American Holdings, Inc. and Invesco Investments (Bermuda) Ltd.; Director and Secretary, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); and Vice President, The AIM Family of Funds®	N/A
		Formerly: Senior Managing Director and Secretary, Invesco North American Holdings, Inc.; Vice President and Secretary, IVZ, Inc. and Invesco Group Services, Inc.; Senior Managing Director and Secretary, Invesco Holding Company Limited; Director, Senior Vice President, Secretary and General Counsel, Invesco Aim Management Group, Inc. and Invesco Aim Advisors, Inc.; Senior Vice President, Invesco Aim Distributors, Inc.; Director, General Counsel and Vice President, Fund Management Company; Vice President, Invesco Aim Capital Management, Inc. and Invesco Aim Investment Services, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The AIM Family of Funds®; Director and Vice President, INVESCO Distributors, Inc.; and Chief Executive Officer and President, INVESCO Funds Group, Inc.
Sheri Morris — 1964 Vice President, Treasurer and Principal Financial Officer	1999	Vice President, Treasurer and Principal Financial Officer, The AIM Family of Funds®; and Vice President, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.) Formerly: Vice President, Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.; Assistant Vice President and Assistant Treasurer, The AIM Family of Funds® and Assistant Vice President, Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A
Karen Dunn Kelley — 1960 Vice President	1993	Head of Invesco’s World Wide Fixed Income and Cash Management Group; Senior Vice President, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Executive Vice President, Invesco Aim Distributors, Inc.; Senior Vice President, Invesco Aim Management Group, Inc.; and Director, Invesco Mortgage Capital Inc.; Vice President, The AIM Family of Funds® (other than AIM Treasurer’s Series Trust and Short-Term Investments Trust); and President and Principal Executive Officer, The AIM Family of Funds® (AIM Treasurer’s Series Trust and Short-Term Investments Trust only)	N/A
		Formerly: Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Director of Cash Management and Senior Vice President, Invesco Aim Advisors, Inc. and Invesco Aim Capital Management, Inc.; President and Principal Executive Officer, Tax-Free Investments Trust; Director and President, Fund Management Company; Chief Cash Management Officer, Director of Cash Management, Senior Vice President, and Managing Director, Invesco Aim Capital Management, Inc.; Director of Cash Management, Senior Vice President, and Vice President, Invesco Aim Advisors, Inc. and The AIM Family of Funds® (AIM Treasurer’s Series Trust, Short-Term Investments Trust and Tax-Free Investments Trust only)
Lance A. Rejsek — 1967 Anti-Money Laundering Compliance Officer	2005	Anti-Money Laundering Compliance Officer, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Invesco Aim Distributors, Inc., Invesco Aim Investment Services, Inc., and The AIM Family of Funds®	N/A
		Formerly: Anti-Money Laundering Compliance Officer, Fund Management Company, Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.
Todd L. Spillane — 1958 Chief Compliance Officer	2006	Senior Vice President, Invesco Aim Management Group, Inc.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Chief Compliance Officer, The AIM Family of Funds®, INVESCO Private Capital Investments, Inc. (holding company), Invesco Private Capital, Inc. (registered investment adviser) and Invesco Senior Secured Management, Inc. (registered investment adviser); Vice President, Invesco Aim Distributors, Inc. and Invesco Aim Investment Services, Inc. Formerly: Senior Vice President and Chief Compliance Officer, Invesco Aim Advisors, Inc. and Invesco Aim Capital Management, Inc.; Chief Compliance Officer, Invesco Global Asset Management (N.A.), Inc.; Vice President, Invesco Aim Capital Management, Inc. and Fund Management Company	N/A

The Statement of Additional Information of the Trust includes additional information about the Fund’s Trustees and is available upon request, without charge, by calling 1.800.959.4246. Please refer to the Fund’s prospectus for information on the Fund’s sub-advisers.

Office of the Fund	Investment Adviser	Distributor	Auditors
11 Greenway Plaza, Suite 100	Invesco Advisers, Inc.	Invesco Aim Distributors, Inc.	PricewaterhouseCoopers LLP
Houston, TX 77046-1173	1555 Peachtree Street, N.E.	11 Greenway Plaza, Suite 100	1201 Louisiana Street, Suite 2900
	Atlanta, GA 30309	Houston, TX 77046-1173	Houston, TX 77002-5678
Counsel to the Fund	Counsel to the	Transfer Agent	Custodian
Stradley Ronon Stevens & Young, LLP	Independent Trustees	Invesco Aim Investment Services, Inc.	State Street Bank and Trust Company
2600 One Commerce Square	Kramer, Levin, Naftalis & Frankel LLP	P.O. Box 4739	225 Franklin
Philadelphia, PA 19103	1177 Avenue of the Americas	Houston, TX 77210-4739	Boston, MA 02110-2801
	New York, NY 10036-2714

T-2

AIM V.I. Core Equity Fund
Annual Report to Shareholders § December 31, 2009

The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter-ends. For the second and fourth quarters, the lists appear in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The Fund’s Form N-Q filings are available on the SEC website, sec.gov. Copies of the Fund’s Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers for the Fund are 811-07452 and 033-57340. The Fund’s most recent portfolio holdings, as filed on Form N-Q, have also been made available to insurance companies issuing variable annuity contracts and variable life insurance policies (“variable products”) that invest in the Fund.

A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, from our Client Services department at 800 410 4246 or on the Invesco Aim website, invescoaim.com. On the home page, scroll down and click on Proxy Policy. The information is also available on the SEC website, sec.gov.

Information regarding how the Fund voted proxies related to its portfolio securities during the 12 months ended June 30, 2009, is available at our website, invescoaim.com. Click the About Us tab at the top of the home page; click Legal Information; and then click Proxy Voting Search. The information is also available on the SEC website, sec.gov.

Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Aim Distributors, Inc. is the U.S. distributor for Invesco Ltd.’s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd.

This report must be accompanied or preceded by a currently effective Fund prospectus and variable product prospectus, which contain more complete information, including sales charges and expenses. Investors should read each carefully before investing.

Invesco Aim Distributors, Inc.

NOT FDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEE

Management’s Discussion of Fund Performance

Performance summary

For the 12 months ended December 31, 2009, AIM V.I. Core Equity Fund’s results, excluding variable product issuer charges, compared favorably to the broad market as measured by the S&P 500 Index, and were generally in line with those of the Fund’s style-specific benchmark, the Russell 1000 Index. The Fund’s comparative results were driven by stock selection in the energy and health care sectors. Stock selection in the information technology (IT) sector was the largest detractor relative to the Russell 1000 Index. However, IT was the largest contributor to the Fund’s absolute returns. Other contributors to the Fund’s absolute returns were holdings in the health care, energy and industrials sectors.

     The Fund’s long-term performance appears later in this report.

Fund vs. Indexes

Total returns, 12/31/08 to 12/31/09, excluding variable product issuer charges.

If variable product issuer charges were included, returns would be lower.

Series I Shares	28.30	%
Series II Shares	27.98
S&P 500 Index6 (Broad Market Index)	26.47
Russell 1000 Index6 (Style-Specific Index)	28.43
Lipper VUF Large-Cap Core Funds Index6 (Peer Group Index)	29.06

⁶ Lipper Inc.

How we invest

We seek to manage your Fund as what we term a “conservative cornerstone” — a stable foundational component of a well-diversified portfolio of assets that may provide attractive upside participation during buoyant equity markets and downside protection during weak equity markets. As part of a well-diversified asset allocation strategy, the Fund is intended to complement more aggressive or cyclical investments.

     We conduct thorough fundamental research of companies and their businesses to gain a deeper understanding of their prospects, growth potential and return on invested capital (ROIC) characteristics. The process we use to identify potential investments for the Fund includes three phases: financial analysis, business analysis and valuation analysis.

Portfolio Composition
By sector

Information Technology		21.7	%
Health Care		16.9
Financials		12.3
Industrials		12.3
Consumer Staples		8.7
Energy		8.1
Consumer Discretionary		2.5
Telecommunication Services		2.2
Materials		1.2
Money Market Funds Plus Other Assets Less Liabilities		14.1
Total Net Assets	$	1.5 billion
Total Number of Holdings*		67

     Financial analysis provides insights into historical returns on invested capital, a key indicator of business quality, and historical capital allocation, a key indicator of management quality. Business analysis, which evaluates the competitive landscape and any structural or cyclical business opportunities or threats, allows us to identify key revenue, profit and return drivers of the company. Both the financial and business analyses serve as a basis to construct valuation models. In our valuation analysis, we use three primary techniques, including discounted cash flow, traditional valuation multiples and net asset value.

     We consider selling a stock when it exceeds our target price, we have not seen a demonstrable improvement in fundamentals or a more compelling investment opportunity exists.

Top 10 Equity Holdings*

1. Progressive Corp. (The)	2.8	%
2. American Express Co.	2.7
3. Microsoft Corp.	2.6
4. Symantec Corp.	2.4
5. Agilent Technologies, Inc.	2.4
6. Comcast Corp.-Class A	2.2
7. Nokia Corp.-ADR	2.0
8. Berkshire Hathaway Inc.-Class A	2.0
9. Motorola, Inc.	1.9
10. Automatic Data Processing, Inc.	1.8

The Fund’s holdings are subject to change, and there is no assurance that the Fund will continue to hold any particular security.

* Excluding money market fund holdings.

Market conditions and your Fund

The year covered by this report was characterized by two dramatically different market environments. In early 2009, equity markets declined steeply as credit markets froze and risk premiums rose dramatically in response to the global recession. As central banks coordinated easing efforts and companies cut costs aggressively, access to liquidity improved and market valuations in both the credit and equity markets recovered from the March lows.

     Major equity indexes generated positive returns for the year, and economically sensitive sectors such as the IT, consumer discretionary and materials sectors delivered the highest returns for the year, while traditionally defensive telecommunication services, consumer staples and utilities sectors had some of the lowest returns.¹

     The primary contributor to the Fund’s results was American Express, the world’s largest issuer of credit-cards as measured by purchase volume. The stock had previously suffered due to investor fears about credit losses following the financial crisis. The sell-off provided us an opportunity to add to our position in the company, which reported stabilization in credit card delinquencies and charge-offs by the second half of the year. The company also repurchased the preferred shares it issued to the U.S. Treasury under the government’s Troubled Asset Relief Program (TARP), which we considered a validation of the firm’s stability.

     Another large contributor was industrial conglomerate Tyco International, which operates in a variety of dissimilar industries such as security solutions, fire protection and fluid valves. The market downturn provided us an opportunity to build a larger position in the stock as it traded lower. As conditions improved later in the year, the company reported good operating results due to improving margins and solid retention rates, and the stock performed well amid improving economic sentiment.

     While the Fund was underexposed to financials during the financial crisis, we took the opportunity to invest in what we viewed as higher quality banks. However, some of these names — including Wells Fargo and BB&T — continued to lag the market in 2009 and negatively affected results.

AIM V.I. Core Equity Fund

     Wells Fargo’s late-2008 acquisition of distressed bank Wachovia boosted both its size and scale, but also added to its exposure to troubled loans. During the year, Wells Fargo reduced its dividend, and we believed the action was prudent to preserve capital. The company is experiencing healthy deposit growth and has been able to deploy capital at favorable price spreads. We believe it is well managed with a sound deposit base, a history of conservative underwriting standards and deep customer relationships. In our view, this business model is poised to gain market share in the revamped global financial system.

     Generally, we believe BB&T is a well-capitalized survivor of the credit crisis, as evidenced by the fact that it passed the federal “stress test” and repaid funds advanced under the TARP program. While credit losses for BB&T rose in 2009 (and, we believe, will likely continue to rise), we attributed the poor performance of BB&T more to the industry-wide downdraft than to company-specific factors. Nonetheless, we eliminated our position in BB&T, as we perceived better relative opportunities elsewhere in the sector.

     Another detractor from results was managed care provider UnitedHealth Group. The company faced heightened uncertainty due to the controversial health care reform package being considered by Congress. Though not yet enacted, the potential legislation was viewed as unfavorable to health care providers as it could fundamentally alter the competitive landscape for health insurance in the U.S. We eliminated this position during the year.

     Our cash weighting fluctuated during the year as we took advantage of market turmoil to invest in high quality companies that we believed had been unduly punished. As many of these companies rallied sharply in the second half of 2009, we used the opportunity to take profits. Thus, the Fund’s cash weighting was up to approximately 14% of total assets at the end of the year. Our cash holdings benefited the Fund during the market downturn, but muted returns during the rally.

     Maintaining a conservative approach is an enduring part of our investment strategy. In the face of significant market volatility, we sought judicious long-term investments in high quality businesses that are not heavily dependent on external sources of financing. At the end of the year, our largest sector weightings were in IT and health care. Our allocation to the consumer discretionary sector remained low, as we believed it will be difficult for many of these companies to recover to pre-crisis earnings levels in the near term.

     We have recently endured one of the most challenging economic periods in recent history, and while the apparent end to the recession is encouraging, we believe that a long and perhaps uneven recovery lies ahead. Indeed, much of the recent economic improvement has been due to a reduced rate of deterioration, and a number of questions remain concerning employment, consumer spending, housing and the eventual removal of fiscal and monetary stimulus. For this reason, we believe that equity markets will remain trendless and volatility is likely to continue for the foreseeable future.

     Regardless of market conditions, our goal remains the same: to serve as a conservative cornerstone for investors’ portfolios, seeking to provide upside participation with downside protection, so that over a full market cycle the Fund may deliver favorable investment results with reduced risk.

1 Lipper Inc.

The views and opinions expressed in management’s discussion of Fund performance are those of Invesco Advisers, Inc. These views and opinions are subject to change at any time based on factors such as market and economic conditions. These views and opinions may not be relied upon as investment advice or recommendations, or as 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 Invesco Advisers, Inc. 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.

See important Fund and index disclosures later in this report.

Ronald Sloan

Chartered Financial Analyst, senior portfolio manager, is lead manager of AIM V.I. Core Equity Fund. Mr. Sloan has worked in the investment industry since 1971 and joined Invesco Aim in 1998. Mr. Sloan attended the University of Missouri, where he earned both a B.S. in business administration and an M.B.A.

Tyler Dann II

Chartered Financial Analyst, portfolio manager, is manager of AIM V.I. Core Equity Fund. Mr. Dann joined Invesco Aim in 2004. He serves on the board of directors of the National Association of Petroleum Investment Analysts and is a member of the CFA Society of San Francisco. He earned an A.B. from Princeton University.

Brian Nelson

Chartered Financial Analyst, portfolio manager, is manager of AIM V.I. Core Equity Fund. He began his investment career in 1988 and joined Invesco Aim in 2004. He earned a B.A. from the University of California-Santa Barbara and is a member of the CFA Society of San Francisco.

Assisted by the Mid/Large Cap Core Team

AIM V.I. Core Equity Fund

Your Fund’s Long-Term Performance

Results of a $10,000 Investment — Oldest Share Class since Inception
Index data from 4/30/94, Fund data from 5/2/94

Past performance cannot guarantee comparable future results.

     This chart, which is a logarithmic chart, presents the fluctuations in the value of the Fund and its indexes. We believe that a logarithmic chart is more effective than other types of charts in illustrating changes in value during the early years shown in the chart. The vertical axis, the one that indicates the dollar value of an investment, is constructed with each segment representing a percent change in the value of the investment. In this chart, each segment represents a doubling, or 100% change, in the value of the investment. In other words, the space between $5,000 and $10,000 is the same size as the space between $10,000 and $20,000, and so on.

Average Annual Total Returns
As of 12/31/09

Series I Shares
Inception (5/2/94)	7.51	%
10 Years	–1.06
5 Years	3.56
1 Year	28.30
Series II Shares
10 Years	–1.30	%
5 Years	3.31
1 Year	27.98

Series II shares’ inception date is October 24, 2001. Returns since that date are historical. All other returns are the blended returns of the historical performance of the fund’s Series II shares since their inception and the restated historical performance of Series I shares (for periods prior to inception of the Series II shares) adjusted to reflect the Rule 12b-1 fees applicable to the Series II shares. The inception date of Series I shares is May 2, 1994. The performance of the Fund’s Series I and Series II share classes will differ primarily due to different class expenses.

     The performance data quoted represent past performance and cannot guarantee comparable future results; current performance may be lower or higher. Please contact your variable product issuer or financial adviser for the most recent month-end variable product performance. Performance figures reflect Fund expenses, reinvested distributions and changes in net asset value. Investment return and principal value will fluctuate so that you may have a gain or loss when you sell shares.

     The net annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 0.90% and 1.15%, respectively.¹ The total annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 0.91% and 1.16%, respectively. The expense ratios presented above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

     AIM V.I. Core Equity Fund, a series portfolio of AIM Variable Insurance Funds, is currently offered through insurance companies issuing variable products. You cannot purchase shares of the Fund directly. Performance figures given represent the Fund and are not intended to reflect actual variable product values. They do not reflect sales charges, expenses and fees assessed in connection with a variable product. Sales charges, expenses and fees, which are determined by the variable product issuers, will vary and will lower the total return.

     The most recent month-end performance data at the Fund level, excluding variable product charges, is available on this Invesco Aim automated information line, 866 702 4402. As mentioned above, for the most recent month-end performance including variable product charges, please contact your variable product issuer or financial adviser.

1 Total annual operating expenses less any contractual fee waivers and/or expense reimbursements by the adviser in effect through at least June 30, 2010. See current prospectus for more information.

AIM V.I. Core Equity Fund

AIM V.I. Core Equity Fund’s investment objective is growth of capital.

§ Unless otherwise stated, information presented in this report is as of December 31, 2009, and is based on total net assets.

§ Unless otherwise noted, all data provided by Invesco.

Principal risks of investing in the Fund

To the extent the Fund holds cash or cash equivalents rather than equity securities for risk management purposes, the Fund may not achieve its investment objective.

     Prices of equity securities change in response to many factors, including the historical and prospective earnings of the issuer, the value of its assets, general economic conditions, interest rates, investor perceptions and market liquidity.

     Foreign securities have additional risks, including exchange rate changes, political and economic upheaval, relative lack of information, relatively low market liquidity, and the potential lack of strict financial and accounting controls and standards.

     There is no guarantee that the investment techniques and risk analysis used by the Fund’s portfolio managers will produce the desired results.

     The prices of securities held by the Fund may decline in response to market risks.

About indexes used in this report

The S&P 500^® Index is an unmanaged index considered representative of the U.S. stock market.

     The Russell 1000^® Index is an unmanaged index considered representative of large-cap stocks. The Russell 1000 Index is a trademark/service mark of the Frank Russell Co. Russell^® is a trademark of the Frank Russell Co.

     The Lipper VUF Large-Cap Core Funds Index is an unmanaged index considered representative of large-cap core variable insurance underlying funds tracked by Lipper.

     The Fund is not managed to track the performance of any particular index, including the indexes defined here, and consequently, the performance of the Fund may deviate significantly from the performance of the indexes.

     A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group reflects fund expenses; performance of a market index does not.

Other information

The Chartered Financial Analyst^® (CFA^®) designation is globally recognized and attests to a charterholder’s success in a rigorous and comprehensive study program in the field of investment management and research analysis.

     The returns shown in management’s discussion of Fund performance are based on net asset values calculated for shareholder transactions. Generally accepted accounting principles require adjustments to be made to the net assets of the Fund at period end for financial reporting purposes, and as such, the net asset values for shareholder transactions and the returns based on those net asset values may differ from the net asset values and returns reported in the Financial Highlights. Additionally, the returns and net asset values shown throughout this report are at the Fund level only and do not include variable product issuer charges. If such charges were included, the total returns would be lower.

     Industry classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s.

AIM V.I. Core Equity Fund

Schedule of Investments^(a)

December 31, 2009

	Shares		Value
Common Stocks & Other Equity Interests–85.83%
Aerospace & Defense–3.51%
Lockheed Martin Corp.		115,688	$	8,717,091
Northrop Grumman Corp.		369,857		20,656,513
United Technologies Corp.		331,399		23,002,405
				52,376,009
Air Freight & Logistics–0.93%
United Parcel Service, Inc.–Class B		242,647		13,920,658
Asset Management & Custody Banks–1.41%
Legg Mason, Inc.		696,330		21,001,313
Biotechnology–1.87%
Amgen Inc.(b)		38,635		2,185,582
Genzyme Corp.(b)		315,091		15,442,610
Gilead Sciences, Inc.(b)		236,742		10,246,194
				27,874,386
Cable & Satellite–2.23%
Comcast Corp.–Class A		1,973,196		33,268,085
Communications Equipment–5.49%
Cisco Systems, Inc.(b)		979,082		23,439,223
Motorola, Inc.(b)		3,649,910		28,323,302
Nokia Corp.–ADR (Finland)		2,343,261		30,110,904
				81,873,429
Computer Hardware–1.14%
Fujitsu Ltd. (Japan)		2,637,000		16,963,984
Computer Storage & Peripherals–1.15%
EMC Corp.(b)		985,134		17,210,291
Consumer Finance–2.65%
American Express Co.		975,361		39,521,628
Data Processing & Outsourced Services–1.79%
Automatic Data Processing, Inc.		623,348		26,691,761
Diversified Banks–1.72%
U.S. Bancorp		594,972		13,392,820
Wells Fargo & Co.		451,085		12,174,784
				25,567,604
Drug Retail–3.22%
CVS Caremark Corp.		784,285		25,261,820
Walgreen Co.		618,259		22,702,470
				47,964,290
Education Services–0.33%
Apollo Group, Inc.–Class A(b)		80,000		4,846,400
Electronic Equipment & Instruments–2.36%
Agilent Technologies, Inc.(b)		1,131,790		35,164,715
Electronic Manufacturing Services–1.35%
Tyco Electronics Ltd. (Switzerland)		818,818		20,101,982
Environmental & Facilities Services–1.42%
Waste Management, Inc.		626,335		21,176,386
Food Retail–1.52%
Kroger Co. (The)		1,105,770		22,701,458
Health Care Equipment–4.46%
Baxter International Inc.		182,134		10,687,623
Boston Scientific Corp.(b)		1,701,227		15,311,043
Covidien PLC (Ireland)		467,079		22,368,413
Medtronic, Inc.		411,431		18,094,736
				66,461,815
Health Care Supplies–1.42%
Alcon, Inc.		129,215		21,236,485
Hypermarkets & Super Centers–1.47%
Wal-Mart Stores, Inc.		409,683		21,897,556
Industrial Conglomerates–4.40%
3M Co.		322,422		26,654,627
Koninklijke (Royal) Philips Electronics N.V. (Netherlands)		659,562		19,526,586
Tyco International Ltd.		544,294		19,420,410
				65,601,623
Industrial Gases–1.20%
Air Products & Common Chemicals, Inc.		220,271		17,855,167
Industrial Machinery–1.18%
Danaher Corp.		234,045		17,600,184
Insurance Brokers–0.74%
Marsh & McLennan Cos., Inc.		498,428		11,005,290
Integrated Telecommunication Services–0.76%
AT&T Inc.		401,272		11,247,654
Life Sciences Tools & Services–1.40%
Thermo Fisher Scientific, Inc.(b)		438,771		20,924,989
Managed Health Care–1.36%
WellPoint Inc.(b)		347,600		20,261,604

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

AIM V.I. Core Equity Fund

	Shares		Value
Office Electronics–0.86%
Xerox Corp.		1,518,840	$	12,849,386
Oil & Gas Equipment & Services–2.39%
Baker Hughes Inc.		125,447		5,078,095
BJ Services Co.		1,086,843		20,215,280
Tenaris S.A.–ADR (Argentina)		241,927		10,318,186
				35,611,561
Oil & Gas Exploration & Production–4.45%
Apache Corp.		182,018		18,778,797
Chesapeake Energy Corp.		326,931		8,460,974
EOG Resources, Inc.		200,833		19,541,051
XTO Energy, Inc.		421,858		19,629,053
				66,409,875
Oil & Gas Refining & Marketing–0.31%
Valero Energy Corp.		275,000		4,606,250
Oil & Gas Storage & Transportation–0.94%
Williams Cos., Inc. (The)		666,149		14,042,421
Packaged Foods & Meats–1.35%
Cadbury PLC (United Kingdom)		1,567,619		20,180,860
Personal Products–1.01%
Avon Products, Inc.		479,130		15,092,595
Pharmaceuticals–6.35%
Allergan, Inc.		380,114		23,950,983
Johnson & Johnson		194,981		12,558,726
Pfizer Inc.		684,528		12,451,565
Roche Holding AG (Switzerland)		138,074		23,465,257
Teva Pharmaceutical Industries Ltd.–ADR (Israel)		395,596		22,224,583
				94,651,114
Property & Casualty Insurance–4.80%
Berkshire Hathaway Inc.–Class A(b)		297		29,462,400
Progressive Corp. (The)(b)		2,339,655		42,090,394
				71,552,794
Railroads–0.89%
Union Pacific Corp.		207,130		13,235,607
Regional Banks–0.96%
PNC Financial Services Group, Inc.		272,188		14,368,805
Semiconductors–2.54%
Intel Corp.		942,791		19,232,936
Taiwan Semiconductor Manufacturing Co. Ltd. (Taiwan)		9,297,823		18,650,852
				37,883,788
Systems Software–5.01%
Microsoft Corp.		1,270,621		38,741,234
Symantec Corp.(b)		2,012,299		36,000,029
				74,741,263
Wireless Telecommunication Services–1.49%
Vodafone Group PLC (United Kingdom)		9,589,366		22,215,369
Total Common Stocks & Other Equity Interests (Cost $1,182,702,819)				1,279,758,434
Preferred Stocks–0.11%
Household Products–0.11%
Henkel AG & Co. KGaA (Germany)–Pfd. (Cost $1,785,965)		33,359		1,734,390
Money Market Funds–13.41%
Liquid Assets Portfolio–Institutional Class(c)		99,964,153		99,964,153
Premier Portfolio–Institutional Class(c)		99,964,153		99,964,153
Total Money Market Funds (Cost $199,928,306)				199,928,306
TOTAL INVESTMENTS–99.35% (Cost $1,384,417,090)				1,481,421,130
OTHER ASSETS LESS LIABILITIES–0.65%				9,676,539
NET ASSETS–100.00%			$	1,491,097,669

Investment Abbreviations:

ADR	– American Depositary Receipt
Pfd.	– Preferred

Notes to Schedule of Investments:

(a)	Industry and/or sector classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s.
(b)	Non-income producing security.
(c)	The money market fund and the Fund are affiliated by having the same investment adviser.

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

AIM V.I. Core Equity Fund

Statement of Assets and Liabilities

December 31, 2009

Assets:
Investments, at value (Cost $1,184,488,784)	$	1,281,492,824
Investments in affiliated money market funds, at value and cost		199,928,306
Total investments, at value (Cost $1,384,417,090)		1,481,421,130
Foreign currencies, at value (Cost $3,369,002)		3,441,962
Receivables for:
Investments sold		3,263,453
Fund shares sold		3,737,380
Dividends		1,357,593
Foreign currency contracts outstanding		679,271
Investment for trustee deferred compensation and retirement plans		120,746
Other assets		191
Total assets		1,494,021,726
Liabilities:
Payables for:
Fund shares reacquired		1,498,150
Amount due custodian		8,084
Accrued fees to affiliates		924,945
Accrued other operating expenses		96,859
Trustee deferred compensation and retirement plans		396,019
Total liabilities		2,924,057
Net assets applicable to shares outstanding	$	1,491,097,669
Net assets consist of:
Shares of beneficial interest	$	1,756,417,663
Undistributed net investment income		12,774,531
Undistributed net realized gain (loss)		(375,833,460	)
Unrealized appreciation		97,738,935
	$	1,491,097,669
Net Assets:
Series I	$	1,456,822,232
Series II	$	34,275,437
Shares outstanding, $0.001 par value per share, unlimited number of shares authorized:
Series I		58,465,826
Series II		1,385,135
Series I:
Net asset value per share	$	24.92
Series II:
Net asset value per share	$	24.75

Statement of Operations

For the year ended December 31, 2009

Investment income:
Dividends (net of foreign withholding taxes of $820,196)	$	23,300,710
Dividends from affiliated money market funds (includes securities lending income of $63,888)		840,834
Interest		858,994
Total investment income		25,000,538
Expenses:
Advisory fees		8,255,366
Administrative services fees		3,553,642
Custodian fees		126,845
Distribution fees–Series II		66,351
Transfer agent fees		77,300
Trustees’ and officers’ fees and benefits		65,963
Other		113,058
Total expenses		12,258,525
Less: Fees waived		(242,120	)
Net expenses		12,016,405
Net investment income		12,984,133
Realized and unrealized gain (loss) from:
Net realized gain (loss) from:
Investment securities (includes net gains (losses) from securities sold to affiliates of $(92,309))		(114,458,507	)
Foreign currencies		216,781
Foreign currency contracts		(4,620,057	)
		(118,861,783	)
Change in net unrealized appreciation of:
Investment securities		442,389,822
Foreign currencies		40,807
Foreign currency contracts		3,449,722
		445,880,351
Net realized and unrealized gain		327,018,568
Net increase in net assets resulting from operations	$	340,002,701

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

AIM V.I. Core Equity Fund

Statement of Changes in Net Assets

For the years ended December 31, 2009 and 2008

	2009			2008
Operations:
Net investment income	$	12,984,133		$	23,768,262
Net realized gain (loss)		(118,861,783	)		(18,360,869	)
Change in net unrealized appreciation (depreciation)		445,880,351			(629,967,536	)
Net increase (decrease) in net assets resulting from operations		340,002,701			(624,560,143	)
Distributions to shareholders from net investment income:
Series I		(23,923,292	)		(37,970,942	)
Series II		(459,176	)		(580,118	)
Total distributions from net investment income		(24,382,468	)		(38,551,060	)
Share transactions-net:
Series I		(182,712,672	)		(315,589,332	)
Series II		4,143,838			(32,094	)
Net increase (decrease) in net assets resulting from share transactions		(178,568,834	)		(315,621,426	)
Net increase (decrease) in net assets		137,051,399			(978,732,629	)
Net assets:
Beginning of year		1,354,046,270			2,332,778,899
End of year (includes undistributed net investment income of $12,774,531 and $23,956,084, respectively)	$	1,491,097,669		$	1,354,046,270

Notes to Financial Statements

December 31, 2009

NOTE 1—Significant Accounting Policies

AIM V.I. Core Equity Fund (the “Fund”) is a series portfolio of AIM Variable Insurance Funds (the “Trust”). The Trust is a Delaware statutory trust registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end series management investment company consisting of twenty-one separate portfolios, (each constituting a “Fund”). The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Matters affecting each Fund or class will be voted on exclusively by the shareholders of such Fund or class. Current Securities and Exchange Commission (“SEC”) guidance, however, requires participating insurance companies offering separate accounts to vote shares proportionally in accordance with the instructions of the contract owners whose investments are funded by shares of each Fund or class.

  The Fund’s investment objective is growth of capital.

  The Fund currently offers two classes of shares, Series I and Series II, both of which are offered to insurance company separate accounts funding variable annuity contracts and variable life insurance policies (“variable products”).

  The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements.

A.	Security Valuations — Securities, including restricted securities, are valued according to the following policy.
	A security listed or traded on an exchange (except convertible bonds) is valued at its last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales or official closing price on a particular day, the security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based on prices furnished by independent pricing services or market makers. When such securities are valued by an independent pricing service they may be considered fair valued. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean between the last bid and ask prices from the exchange on which they are principally traded. Options not listed on an exchange are valued by an independent source at the mean between the last bid and ask prices. For purposes of determining net asset value per share, futures and option contracts generally are valued 15 minutes after the close of the customary trading session of the New York Stock Exchange (“NYSE”).
	Investments in open-end and closed-end registered investment companies that do not trade on an exchange are valued at the end of day net asset value per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded.
	Debt obligations (including convertible bonds) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution-size trading in similar groups of securities, developments related to specific securities, dividend rate, yield, quality, type of issue, coupon rate,

AIM V.I. Core Equity Fund

	maturity, individual trading characteristics and other market data. Short-term obligations, including commercial paper, having 60 days or less to maturity are recorded at amortized cost which approximates value. Debt securities are subject to interest rate and credit risks. In addition, all debt securities involve some risk of default with respect to interest and/or principal payments.
	Foreign securities (including foreign exchange contracts) are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the NYSE. If market quotations are available and reliable for foreign exchange traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that are significant and make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economical upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
	Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities and Corporate Loans. The mean between the last bid and asked prices may be used to value debt obligations other than Corporate Loans.
	Securities for which market quotations are not readily available or are unreliable are valued at fair value as determined in good faith by or under the supervision of the Trust’s officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a security’s fair value.
	Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
B.	Securities Transactions and Investment Income — Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income is recorded on the accrual basis from settlement date. Dividend income is recorded on the ex-dividend date.
	The Fund may periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain/loss for investments no longer held and as unrealized gain/loss for investments still held.
	Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the realized and unrealized net gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the Fund’s net asset value and, accordingly, they reduce the Fund’s total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in the Statement of Operations and Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the adviser.
	The Fund allocates income and realized and unrealized capital gains and losses to a class based on the relative net assets of each class.
C.	Country Determination — For the purposes of making investment selection decisions and presentation in the Schedule of Investments, the investment adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuer’s securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted.
D.	Distributions — Distributions from income and net realized capital gain, if any, are generally paid to separate accounts of participating insurance companies annually and recorded on ex-dividend date.
E.	Federal Income Taxes — The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code necessary to qualify as a regulated investment company and to distribute substantially all of the Fund’s taxable earnings to shareholders. As such, the Fund will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements.
	The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.
F.	Expenses — Fees provided for under the Rule 12b-1 plan of a particular class of the Fund and which are directly attributable to that class are charged to the operations of such class. All other expenses are allocated among the classes based on relative net assets.
G.	Accounting Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual

AIM V.I. Core Equity Fund

	results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print, which is generally 45 days from the period-end date.
H.	Indemnifications — Under the Trust’s organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Fund’s servicing agreements, that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote.
I.	Securities Lending — The Fund may lend portfolio securities having a market value up to one-third of the Fund’s total assets. Such loans are secured by collateral equal to no less than the market value of the loaned securities determined daily by the securities lending provider. Such collateral will be cash or debt securities issued or guaranteed by the U.S. Government or any of its sponsored agencies. Cash collateral received in connection with these loans is invested in short-term money market instruments or affiliated money market funds and is shown as such on the Schedule of Investments. It is the Fund’s policy to obtain additional collateral from or return excess collateral to the borrower by the end of the next business day, following the valuation date of the securities loaned. Therefore, the value of the collateral held may be temporarily less than the value of the securities on loan. Lending securities entails a risk of loss to the Fund if and to the extent that the market value of the securities loaned were to increase and the borrower did not increase the collateral accordingly, and the borrower fails to return the securities. Upon the failure of the borrower to return the securities, collateral may be liquidated and the securities may be purchased on the open market to replace the loaned securities. The Fund could experience delays and costs in gaining access to the collateral. The Fund bears the risk of any deficiency in the amount of the collateral available for return to the borrower due to any loss on the collateral invested. Dividends received on cash collateral investments for securities lending transactions, which are net of compensation to counterparties, is included in Dividends from affiliates on the Statement of Operations. The aggregate value of securities out on loan is shown as a footnote on the Statement of Assets and Liabilities, if any.
J.	Foreign Currency Translations — Foreign currency is valued at the close of the NYSE based on quotations posted by banks and major currency dealers. Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at date of valuation. Purchases and sales of portfolio securities (net of foreign taxes withheld on disposition) and income items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. The Fund does not separately account for the portion of the results of operations resulting from changes in foreign exchange rates on investments and the fluctuations arising from changes in market prices of securities held. The combined results of changes in foreign exchange rates and the fluctuation of market prices on investments (net of estimated foreign tax withholding) are included with the net realized and unrealized gain or loss from investments in the Statement of Operations. Reported net realized foreign currency gains or losses arise from (i) sales of foreign currencies, (ii) currency gains or losses realized between the trade and settlement dates on securities transactions, and (iii) the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign currency gains and losses arise from changes in the fair values of assets and liabilities, other than investments in securities at fiscal period end, resulting from changes in exchange rates.
	The Fund may invest in foreign securities which may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable.
K.	Foreign Currency Contracts — The Fund may enter into foreign currency contracts to manage or minimize currency or exchange rate risk. The Fund may also enter into foreign currency contracts for the purchase or sale of a security denominated in a foreign currency in order to “lock in” the U.S. dollar price of that security. A foreign currency contract is an obligation to purchase or sell a specific currency for an agreed-upon price at a future date. The use of foreign currency contracts does not eliminate fluctuations in the price of the underlying securities the Fund owns or intends to acquire but establishes a rate of exchange in advance. Fluctuations in the value of these contracts are measured by the difference in the contract date and reporting date exchange rates and are recorded as unrealized appreciation (depreciation) until the contracts are closed. When the contracts are closed, realized gains (losses) are recorded. Realized and unrealized gains (losses) on the contracts are included in the Statement of Operations. The primary risks associated with foreign currency contracts include failure of the counterparty to meet the terms of the contract and the value of the foreign currency changing unfavorably. These risks may be in excess of the amounts reflected in the Statement of Assets and Liabilities.

NOTE 2—Advisory Fees and Other Fees Paid to Affiliates

The Trust has entered into a master investment advisory agreement with Invesco Advisers, Inc. (the “Adviser” or “Invesco”). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Adviser based on the annual rate of the Fund’s average daily net assets as follows:

Average Net Assets	Rate
First $250 million		0	.65%
Over $250 million		0	.60%

  Under the terms of a master sub-advisory agreement approved by shareholders of the Funds between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Trimark Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Funds, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide discretionary investment management services to each Fund based on the percentage of assets allocated to such Sub-Adviser(s).

  On December 31, 2009, Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc., Invesco Private Asset Management, Inc. and Invesco Global Asset Management (N.A.), Inc. merged into Invesco Institutional (N.A.), Inc. and the consolidated adviser firm was renamed Invesco Advisers, Inc.

AIM V.I. Core Equity Fund

  The Adviser has contractually agreed to waive advisory fees and/or reimburse expenses of all shares to the extent necessary to limit total annual fund operating expenses after fee waiver (excluding certain items discussed below) of Series I shares to 1.30% and Series II shares to 1.45% of average daily net assets, through at least April 30, 2011. In determining the Adviser’s obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the total annual fund operating expenses after fee waiver to exceed the numbers reflected above: (1) interest; (2) taxes; (3) dividend expense on short sales; (4) extraordinary items or non-routine items; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. The Board of Trustees or Invesco may terminate the fee waiver arrangement at any time. The Adviser did not waive fees and/or reimburse expenses during the period under this expense limitation.

  Further, the Adviser has contractually agreed, through at least June 30, 2010, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash (excluding investments of cash collateral from securities lending) in such affiliated money market funds.

  For the year ended December 31, 2009, the Adviser waived advisory fees of $242,120.

  At the request of the Trustees of the Trust, Invesco Ltd. agreed to reimburse expenses incurred by the Fund in connection with market timing matters in the AIM Funds, which may include legal, audit, shareholder reporting, communications and trustee expenses. For the year ended December 31, 2009, Invesco Ltd. did not reimburse any expenses.

  The Trust has entered into a master administrative services agreement with Invesco pursuant to which the Fund has agreed to pay Invesco a fee for costs incurred in providing accounting services and fund administrative services to the Fund and to reimburse Invesco for administrative services fees paid to insurance companies that have agreed to provide services to the participants of separate accounts. These administrative services provided by the insurance companies may include, among other things: the printing of prospectuses, financial reports and proxy statements and the delivery of the same to existing participants; the maintenance of master accounts; the facilitation of purchases and redemptions requested by the participants; and the servicing of participants’ accounts. Pursuant to such agreement, for the year ended December 31, 2009, Invesco was paid $321,664 for accounting and fund administrative services and reimbursed $3,231,978 for services provided by insurance companies.

  The Trust has entered into a transfer agency and service agreement with Invesco Aim Investment Services, Inc. (“IAIS”) pursuant to which the Fund has agreed to pay IAIS a fee for providing transfer agency and shareholder services to the Fund and reimburse IAIS for certain expenses incurred by IAIS in the course of providing such services. For the year ended December 31, 2009, expenses incurred under the agreement are shown in the Statement of Operations as transfer agent fees.

  The Trust has entered into a master distribution agreement with Invesco Aim Distributors, Inc. (“IADI”) to serve as the distributor for the Fund. The Trust has adopted a plan pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund’s Series II shares (the “Plan”). The Fund, pursuant to the Plan, pays IADI compensation at the annual rate of 0.25% of the Fund’s average daily net assets of Series II shares. Of the Plan payments, up to 0.25% of the average daily net assets of the Series II shares may be paid to insurance companies who furnish continuing personal shareholder services to customers who purchase and own Series II shares of the Fund. For the year ended December 31, 2009, expenses incurred under the Plan are detailed in the Statement of Operations as distribution fees.

  Certain officers and trustees of the Trust are officers and directors of Invesco, IAIS and/or IADI.

NOTE 3—Additional Valuation Information

Generally Accepted Accounting Principles (“GAAP”) defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3) generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment’s assigned level:

Level 1 —	Prices are determined using quoted prices in an active market for identical assets.
Level 2 —	Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk and others.
Level 3 —	Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information.

  The following is a summary of the tiered valuation input levels, as of December 31, 2009. The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.

	Level 1		Level 2		Level 3		Total
Equity Securities	$	1,378,210,419	$	103,210,711	$	—	$	1,481,421,130
Other Investments*		679,271		—		—		679,271
Total Investments	$	1,378,889,690	$	103,210,711	$	—	$	1,482,100,401

*  Other Investments include foreign currency contracts which are included at unrealized appreciation.

AIM V.I. Core Equity Fund

NOTE 4—Derivative Investments

Effective with the beginning of the Fund’s fiscal year end, the Fund has implemented new required disclosures about derivative instruments and hedging activities in accordance with GAAP. GAAP has intended to improve financial reporting about derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity’s financial position and financial performance. The enhanced disclosure has no impact on the results of operations reported in the financial statements.

Value of Derivative Instruments at Period-End

The Table below summarizes the value of the Fund’s derivative instruments, detailed by primary risk exposure, held as of December 31, 2009:

	Value
Risk Exposure/ Derivative Type	Assets		Liabilities
Currency risk
Foreign Currency Contracts(a)	$	679,271	$	—

^(a) Values are disclosed on the Statement of Assets and Liabilities under Foreign currency contracts outstanding.

Effect of Derivative Instruments for the year ended December 31, 2009

The table below summarizes the gains (losses) on derivative instruments, detailed by primary risk exposure, recognized in earnings during the period:

	Location of Gain (Loss) on
	Statement of Operations
	Foreign Currency
	Contracts*
Realized Gain (Loss)
Currency risk	$	(4,620,057	)
Change in Unrealized Appreciation
Currency risk		3,449,722
Total	$	(1,170,335	)

*  The average value of foreign currency contracts outstanding during the period was $24,462,380.

Open Foreign Currency Contracts
Settlement	Contract to						Unrealized
Date	Deliver		Receive		Value		Appreciation
3/04/10	GBP	13,150,000	USD	21,919,735	$	21,240,464	$	679,271

Currency Abbreviations:

GBP — British Pound Sterling

USD — U.S. Dollar

NOTE 5—Security Transactions with Affiliated Funds

The Fund is permitted to purchase or sell securities from or to certain other AIM Funds under specified conditions outlined in procedures adopted by the Board of Trustees of the Trust. The procedures have been designed to ensure that any purchase or sale of securities by the Fund from or to another fund or portfolio that is or could be considered an affiliate by virtue of having a common investment adviser (or affiliated investment advisers), common Trustees and/or common officers complies with Rule 17a-7 of the 1940 Act. Further, as defined under the procedures, each transaction is effected at the current market price. Pursuant to these procedures, for the year ended December 31, 2009, the Fund engaged in securities sales of $1,083,654, which resulted in net realized gains (losses) of $(92,309).

NOTE 6—Trustees’ and Officers’ Fees and Benefits

“Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and “Trustees’ and Officers’ Fees and Benefits” also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various AIM Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees are eligible to participate in a retirement plan that provides for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former Trustees who also participate in a retirement plan and receive benefits under such plan. “Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund.

  During the year ended December 31, 2009, the Fund paid legal fees of $5,979 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A member of that firm is a Trustee of the Trust.

AIM V.I. Core Equity Fund

NOTE 7—Cash Balances

The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with The State Street Bank and Trust Company, the custodian bank. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (i) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (ii) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.

NOTE 8—Distributions to Shareholders and Tax Components of Net Assets

Tax Character of Distributions to Shareholders Paid During the Years Ended December 31, 2009 and 2008:

	2009		2008
Ordinary income	$	24,382,468	$	38,551,060

Tax Components of Net Assets at Period-End:

	2009
Undistributed ordinary income	$	13,178,405
Net unrealized appreciation — investments		89,321,892
Net unrealized appreciation — other investments		55,623
Temporary book/tax differences		(403,874	)
Capital loss carryforward		(367,472,040	)
Shares of beneficial interest		1,756,417,663
Total net assets	$	1,491,097,669

  The difference between book-basis and tax-basis unrealized appreciation (depreciation) is due to differences in the timing of recognition of gains and losses on investments for tax and book purposes. The Fund’s net realized appreciation difference is attributable primarily to wash sales.

  The temporary book/tax differences are a result of timing differences between book and tax recognition of income and/or expenses. The Fund’s temporary book/tax differences are the result of the trustee deferral of compensation and retirement plan benefits.

  Capital loss carryforward is calculated and reported as of a specific date. Results of transactions and other activity after that date may affect the amount of capital loss carryforward actually available for the Fund to utilize. The ability to utilize capital loss carryforward in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions. Under these limitation rules, the Fund is limited to utilizing $367,472,040 of capital loss carryforward in the fiscal year ending December 31, 2010.

  The Fund has a capital loss carryforward as of December 31, 2009 which expires as follows:

	Capital Loss
Expiration	Carryforward*
December 31, 2010	$	157,184,467
December 31, 2011		21,217,854
December 31, 2017		189,069,719
Total capital loss carryforward	$	367,472,040

*  Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code. To the extent that unrealized gains as of May 1, 2006, the date of the reorganization of AIM V.I. Core Stock Fund and AIM V.I. Premier Equity Fund, into the Fund are realized on securities held in each Fund at such date, the capital loss carryforward may be further limited for up to five years from the date of the reorganization.

NOTE 9—Investment Securities

The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the year ended December 31, 2009 was $250,433,302 and $500,393,245, respectively. Cost of investments on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed Federal income tax reporting period-end.

Unrealized Appreciation (Depreciation) of Investment Securities on a Tax Basis
Aggregate unrealized appreciation of investment securities	$	198,790,615
Aggregate unrealized (depreciation) of investment securities		(109,468,723	)
Net unrealized appreciation of investment securities	$	89,321,892
Cost of investments for tax purposes is $1,392,099,238.

AIM V.I. Core Equity Fund

NOTE 10—Reclassification of Permanent Differences

Primarily as a result of differing book/tax treatment of expired capital loss carryforward, on December 31, 2009, undistributed net investment income was increased by $216,782, undistributed net realized gain (loss) was increased by $33,051,034 and shares of beneficial interest decreased by $33,267,816. This reclassification had no effect on the net assets of the Fund.

NOTE 11—Share Information

	Summary of Share Activity
	Year ended						Year ended
	December 31, 2009(a)						December 31, 2008
	Shares			Amount			Shares			Amount
Sold:
Series I		3,599,291		$	75,638,826			4,038,365		$	99,125,887
Series II		497,105			10,793,298			303,531			7,308,692
Issued as reinvestment of dividends:
Series I		975,664			23,923,292			1,942,248			37,970,942
Series II		18,850			459,176			29,872			580,118
Reacquired:
Series I		(13,469,940	)		(282,274,790	)		(17,562,746	)		(452,686,161	)
Series II		(348,530	)		(7,108,636	)		(319,907	)		(7,920,904	)
Net increase (decrease) in share activity		(8,727,560	)	$	(178,568,834	)		(11,568,637	)	$	(315,621,426	)

^(a) There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 55% of the outstanding shares of the Fund. The Fund and the Fund’s principal underwriter or adviser, are parties to participation agreements with these entities whereby these entities sell units of interest in separate accounts funding variable products that are invested in the Fund. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as, securities brokerage, third party record keeping and account servicing and administrative services. The Trust has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially.

NOTE 12—Financial Highlights

The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.

																					Ratio of			Ratio of
																					expenses			expenses
					Net gains																to average			to average net			Ratio of net
	Net asset				(losses) on						Dividends										net assets			assets without			investment
	value,		Net		securities (both			Total from			from net			Net asset					Net assets,		with fee waivers			fee waivers			income
	beginning		investment		realized and			investment			investment			value, end		Total			end of period		and/or expenses			and/or expenses			to average			Portfolio
	of period		income(a)		unrealized)			operations			income			of period		Return(b)			(000s omitted)		absorbed			absorbed			net assets			turnover(c)
Series I
Year ended 12/31/09	$	19.75	$	0.19	$	5.39		$	5.58		$	(0.41	)	$	24.92		28.30	%	$	1,456,822		0.88	%(d)		0.90	%(d)		0.96	%(d)		21	%
Year ended 12/31/08		29.11		0.33		(9.11	)		(8.78	)		(0.58	)		19.75		(30.14	)		1,330,161		0.89			0.90			1.26			36
Year ended 12/31/07		27.22		0.42		1.80			2.22			(0.33	)		29.11		8.12			2,298,007		0.87			0.88			1.44			45
Year ended 12/31/06		23.45		0.34		3.58			3.92			(0.15	)		27.22		16.70			2,699,252		0.89			0.89			1.35			45
Year ended 12/31/05		22.60		0.24		0.96			1.20			(0.35	)		23.45		5.31			1,246,529		0.89			0.89			1.08			52
Series II
Year ended 12/31/09		19.62		0.14		5.34			5.48			(0.35	)		24.75		27.98			34,275		1.13	(d)		1.15	(d)		0.71	(d)		21
Year ended 12/31/08		28.88		0.26		(9.02	)		(8.76	)		(0.50	)		19.62		(30.32	)		23,885		1.14			1.15			1.01			36
Year ended 12/31/07		27.02		0.34		1.80			2.14			(0.28	)		28.88		7.88			34,772		1.12			1.13			1.19			45
Year ended 12/31/06		23.33		0.28		3.55			3.83			(0.14	)		27.02		16.42			39,729		1.14			1.14			1.10			45
Year ended 12/31/05		22.48		0.18		0.96			1.14			(0.29	)		23.33		5.08			3,858		1.14			1.14			0.83			52

(a)	Calculated using average shares outstanding.
(b)	Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Total returns do not reflect charges assessed in connection with a variable product, which if included would reduce total returns.
(c)	Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable.
(d)	Ratios are based on average daily net assets (000’s omitted) of $1,328,520 and $26,540 for Series I and Series II shares, respectively.

AIM V.I. Core Equity Fund

Report of Independent Registered Public Accounting Firm

To the Board of Trustees of AIM Variable Insurance Funds

and Shareholders of AIM V.I. Core Equity Fund:

In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of AIM V.I. Core Equity Fund, (one of the funds constituting AIM Variable Insurance Funds, hereafter referred to as the “Fund”) at December 31, 2009, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at December 31, 2009 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.

PRICEWATERHOUSECOOPERS LLP

February 10, 2010

Houston, Texas

AIM V.I. Core Equity Fund

Calculating your ongoing Fund expenses

Example

As a shareholder of the Fund, you incur ongoing costs, including management fees; distribution and/or service fees (12b-1); and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period July 1, 2009 through December 31, 2009.

  The actual and hypothetical expenses in the examples below do not represent the effect of any fees or other expenses assessed in connection with a variable product; if they did, the expenses shown would be higher while the ending account values shown would be lower.

Actual expenses

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

Hypothetical example for comparison purposes

The table below also provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return.

  The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

  Please note that the expenses shown in the table are meant to highlight your ongoing costs. Therefore, the hypothetical information is useful in comparing ongoing costs, and will not help you determine the relative total costs of owning different funds.

							HYPOTHETICAL
							(5% annual return before
			ACTUAL				expenses)
	Beginning		Ending		Expenses		Ending		Expenses		Annualized
	Account Value		Account Value		Paid During		Account Value		Paid During		Expense
Class	(07/01/09)		(12/31/09)1		Period2		(12/31/09)		Period2		Ratio
Series I	$	1,000.00	$	1,209.50	$	4.90	$	1,020.77	$	4.48		0.88	%
Series II		1,000.00		1,208.40		6.29		1,019.51		5.75		1.13

1	The actual ending account value is based on the actual total return of the Fund for the period July 1, 2009 through December 31, 2009, after actual expenses and will differ from the hypothetical ending account value which is based on the Fund’s expense ratio and a hypothetical annual return of 5% before expenses.
2	Expenses are equal to the Fund’s annualized expense ratio as indicated above multiplied by the average account value over the period, multiplied by 184/365 to reflect the most recent fiscal half year.

AIM V.I. Core Equity Fund

Tax Information

Form 1099-DIV, Form 1042-S and other year-end tax information provide shareholders with actual calendar year amounts that should be included in their tax returns. Shareholders should consult their tax advisers.

  The following distribution information is being provided as required by the Internal Revenue Code or to meet a specific state’s requirement.

  The Fund designates the following amounts or, if subsequently determined to be different, the maximum amount allowable for its fiscal year ended December 31, 2009:

Federal and State Income Tax
Corporate Dividends Received Deduction*	96.81%

*  The above percentage is based on ordinary income dividends paid to shareholders during the Fund’s fiscal year.

AIM V.I. Core Equity Fund

Trustees and Officers

The address of each trustee and officer of AIM Variable Insurance Funds (the “Trust”), is 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173. Each trustee oversees 105 portfolios in the AIM Funds complex. The trustees serve for the life of the Trust, subject to their earlier death, incapacitation, resignation, retirement or removal as more specifically provided in the Trust’s organizational documents. Each officer serves for a one year term or until their successors are elected and qualified. Column two below includes length of time served with predecessor entities, if any.

	Trustee and/
Name, Year of Birth and	or Officer	Principal Occupation(s)	Other Directorship(s)
Position(s) Held with the Trust	Since	During Past 5 Years	Held by Trustee
Interested Persons
Martin L. Flanagan1 — 1960 Trustee	2007	Executive Director, Chief Executive Officer and President, Invesco Ltd. (ultimate parent of Invesco Aim and a global investment management firm); Adviser to the Board, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Trustee, The AIM Family of Funds®; Board of Governors, Investment Company Institute; and Member of Executive Board, SMU Cox School of Business	None
		Formerly: Chairman, Invesco Aim Advisors, Inc. (registered investment adviser); Director, Chairman, Chief Executive Officer and President, IVZ Inc. (holding company), INVESCO Group Services, Inc. (service provider) and Invesco North American Holdings, Inc. (holding company); Director, Chief Executive Officer and President, Invesco Holding Company Limited (parent of Invesco Aim and a global investment management firm); Director, Invesco Ltd.; Chairman and Vice Chairman, Investment Company Institute
Philip A. Taylor2 — 1954 Trustee, President and Principal Executive Officer	2006	Head of North American Retail and Senior Managing Director, Invesco Ltd.; Director, Co-Chairman, Co-President and Co- Chief Executive Officer, Invesco Advisers, inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Director, Chief Executive Officer and President, Invesco Aim Advisors, Inc. and 1371 Preferred Inc. (holding company); Director, Chairman, Chief Executive Officer and President, Invesco Aim Management Group, Inc. (financial services holding company); Director, Co-Chairman, Co-President and Co-Chief Executive Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Director and President, INVESCO Funds Group, Inc. (registered investment adviser and registered transfer agent) and AIM GP Canada Inc. (general partner for limited partnerships); Director, Invesco Aim Distributors, Inc. (registered broker dealer); Director and Chairman, Invesco Aim Investment Services, Inc. (registered transfer agent) and INVESCO Distributors, Inc. (registered broker dealer); Director, President and Chairman, INVESCO Inc. (holding company) and Invesco Canada Holdings Inc. (holding company); Chief Executive Officer, AIM Trimark Corporate Class Inc. (corporate mutual fund company) and AIM Trimark Canada Fund Inc. (corporate mutual fund company); Director and Chief Executive Officer, Invesco Trimark Ltd./Invesco Trimark Ltèe (registered investment adviser and registered transfer agent) and Invesco Trimark Dealer Inc. (registered broker dealer); Trustee, President and Principal Executive Officer, The AIM Family of Funds® (other than AIM Treasurer’s Series Trust and Short-Term Investments Trust); Trustee and Executive Vice President, The AIM Family of Funds® (AIM Treasurer’s Series Trust and Short-Term Investments Trust only); and Manager, Invesco PowerShares Capital Management LLC	None
		Formerly: Manager, Invesco PowerShares Capital Management LLC; Director, Chief Executive Officer and President, Invesco Aim Advisors, Inc.; Director, Chairman, Chief Executive Officer and President, Invesco Aim Capital Management, Inc.; President, Invesco Trimark Dealer Inc. and Invesco Trimark Ltd./Invesco Trimark Ltèe; Director and President, AIM Trimark Corporate Class Inc. and AIM Trimark Canada Fund Inc.; Senior Managing Director, Invesco Holding Company Limited; Trustee and Executive Vice President, Tax-Free Investments Trust; Director and Chairman, Fund Management Company (former registered broker dealer); President and Principal Executive Officer, The AIM Family of Funds® (AIM Treasurer’s Series Trust, Short-Term Investments Trust and Tax-Free Investments Trust only); President, AIM Trimark Global Fund Inc. and AIM Trimark Canada Fund Inc.
Independent Trustees
Bruce L. Crockett — 1944 Trustee and Chair	1993	Chairman, Crockett Technology Associates (technology consulting company)	ACE Limited (insurance company); Captaris, Inc. (unified messaging provider); and Investment Company Institute
Bob R. Baker — 1936 Trustee	2004	Retired	None
Frank S. Bayley — 1939 Trustee	2001	Retired Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios)	None
James T. Bunch — 1942 Trustee	2004	Founder, Green, Manning & Bunch Ltd., (investment banking firm)	Board of Governors, Western Golf Association/Evans Scholars Foundation and Executive Committee, United States Golf Association
Albert R. Dowden — 1941 Trustee	2000	Director of a number of public and private business corporations, including the Boss Group, Ltd. (private investment and management); Reich & Tang Funds (registered investment company); and Homeowners of America Holding Corporation/Homeowners of America Insurance Company (property casualty company)	Board of Nature’s Sunshine Products, Inc.
		Formerly: Director, Continental Energy Services, LLC (oil and gas pipeline service); Director, CompuDyne Corporation (provider of product and services to the public security market) and Director, Annuity and Life Re (Holdings), Ltd. (reinsurance company); Director, President and Chief Executive Officer, Volvo Group North America, Inc.; Senior Vice President, AB Volvo; Director of various public and private corporations
Jack M. Fields — 1952 Trustee	1997	Chief Executive Officer, Twenty First Century Group, Inc. (government affairs company); and Owner and Chief Executive Officer, Dos Angelos Ranch, L.P. (cattle, hunting, corporate entertainment), Discovery Global Education Fund (non-profit) and Cross Timbers Quail Research Ranch (non-profit)	Administaff
		Formerly: Chief Executive Officer, Texana Timber LP (sustainable forestry company)
Carl Frischling — 1937 Trustee	1993	Partner, law firm of Kramer Levin Naftalis and Frankel LLP	Director, Reich & Tang Funds (16 portfolios)
Prema Mathai-Davis — 1950 Trustee	1998	Retired	None
Lewis F. Pennock — 1942 Trustee	1993	Partner, law firm of Pennock & Cooper	None
Larry Soll — 1942 Trustee	2004	Retired	None
Raymond Stickel, Jr. — 1944 Trustee	2005	Retired Formerly: Director, Mainstay VP Series Funds, Inc. (25 portfolios)	None

1	Mr. Flanagan is considered an interested person of the Trust because he is an officer of the adviser to the Trust, and an officer and a director of Invesco Ltd., ultimate parent of the adviser to the Trust.
2	Mr. Taylor is considered an interested person of the Trust because he is an officer and a director of the adviser to, and a director of the principal underwriter of, the Trust.

T-1

Trustees and Officers – (continued)

	Trustee and/
Name, Year of Birth and	or Officer	Principal Occupation(s)	Other Directorship(s)
Position(s) Held with the Trust	Since	During Past 5 Years	Held by Trustee
Other Officers
Russell C. Burk — 1958 Senior Vice President and Senior Officer	2005	Senior Vice President and Senior Officer of The AIM Family of Funds®	N/A
John M. Zerr — 1962 Senior Vice President, Chief Legal Officer and Secretary	2006	Director, Senior Vice President, Secretary and General Counsel, Invesco Aim Management Group, Inc., Senior Vice President, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Director, Senior Vice President and Secretary, Invesco Aim Distributors, Inc.; Director, Vice President and Secretary, Invesco Aim Investment Services, Inc. and INVESCO Distributors, Inc.; Director and Vice President, INVESCO Funds Group, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The AIM Family of Funds®; and Manager, Invesco PowerShares Capital Management LLC	N/A
		Formerly: Director, Senior Vice President, General Counsel and Secretary, Invesco Aim Advisors, Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco Aim Capital Management, Inc.; Chief Operating Officer and General Counsel, Liberty Ridge Capital, Inc. (an investment adviser); Vice President and Secretary, PBHG Funds (an investment company) and PBHG Insurance Series Fund (an investment company); Chief Operating Officer, General Counsel and Secretary, Old Mutual Investment Partners (a broker-dealer); General Counsel and Secretary, Old Mutual Fund Services (an administrator) and Old Mutual Shareholder Services (a shareholder servicing center); Executive Vice President, General Counsel and Secretary, Old Mutual Capital, Inc. (an investment adviser); and Vice President and Secretary, Old Mutual Advisors Funds (an investment company)
Lisa O. Brinkley — 1959 Vice President	2004	Global Compliance Director, Invesco Ltd.; Chief Compliance Officer, Invesco Aim Distributors, Inc. and Invesco Aim Investment Services, Inc.; and Vice President, The AIM Family of Funds®	N/A
		Formerly: Senior Vice President, Invesco Aim Management Group, Inc.; Senior Vice President and Chief Compliance Officer, Invesco Aim Advisors, Inc. and The AIM Family of Funds®; Vice President and Chief Compliance Officer, Invesco Aim Capital Management, Inc. and Invesco Aim Distributors, Inc.; Vice President, Invesco Aim Investment Services, Inc. and Fund Management Company
Kevin M. Carome — 1956 Vice President	2003	General Counsel, Secretary and Senior Managing Director, Invesco Ltd.; Director, Invesco Holding Company Limited and INVESCO Funds Group, Inc.; Director and Executive Vice President, IVZ, Inc., Invesco Group Services, Inc., Invesco North American Holdings, Inc. and Invesco Investments (Bermuda) Ltd.; Director and Secretary, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); and Vice President, The AIM Family of Funds® Formerly: Senior Managing Director and Secretary, Invesco North American Holdings, Inc.; Vice President and Secretary, IVZ, Inc. and Invesco Group Services, Inc.; Senior Managing Director and Secretary, Invesco Holding Company Limited; Director, Senior Vice President, Secretary and General Counsel, Invesco Aim Management Group, Inc. and Invesco Aim Advisors, Inc.; Senior Vice President, Invesco Aim Distributors, Inc.; Director, General Counsel and Vice President, Fund Management Company; Vice President, Invesco Aim Capital Management, Inc. and Invesco Aim Investment Services, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The AIM Family of Funds®; Director and Vice President, INVESCO Distributors, Inc.; and Chief Executive Officer and President, INVESCO Funds Group, Inc.	N/A
Sheri Morris — 1964 Vice President, Treasurer and Principal Financial Officer	1999	Vice President, Treasurer and Principal Financial Officer, The AIM Family of Funds®; and Vice President, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.)	N/A
		Formerly: Vice President, Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.; Assistant Vice President and Assistant Treasurer, The AIM Family of Funds® and Assistant Vice President, Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.
Karen Dunn Kelley — 1960 Vice President	1993	Head of Invesco’s World Wide Fixed Income and Cash Management Group; Senior Vice President, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Executive Vice President, Invesco Aim Distributors, Inc.; Senior Vice President, Invesco Aim Management Group, Inc.; and Director, Invesco Mortgage Capital Inc.; Vice President, The AIM Family of Funds® (other than AIM Treasurer’s Series Trust and Short-Term Investments Trust); and President and Principal Executive Officer, The AIM Family of Funds® (AIM Treasurer’s Series Trust and Short-Term Investments Trust only)	N/A
		Formerly: Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Director of Cash Management and Senior Vice President, Invesco Aim Advisors, Inc. and Invesco Aim Capital Management, Inc.; President and Principal Executive Officer, Tax-Free Investments Trust; Director and President, Fund Management Company; Chief Cash Management Officer, Director of Cash Management, Senior Vice President, and Managing Director, Invesco Aim Capital Management, Inc.; Director of Cash Management, Senior Vice President, and Vice President, Invesco Aim Advisors, Inc. and The AIM Family of Funds® (AIM Treasurer’s Series Trust, Short-Term Investments Trust and Tax-Free Investments Trust only)
Lance A. Rejsek — 1967 Anti-Money Laundering Compliance Officer	2005	Anti-Money Laundering Compliance Officer, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Invesco Aim Distributors, Inc., Invesco Aim Investment Services, Inc., and The AIM Family of Funds®	N/A
		Formerly: Anti-Money Laundering Compliance Officer, Fund Management Company, Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.
Todd L. Spillane — 1958 Chief Compliance Officer	2006	Senior Vice President, Invesco Aim Management Group, Inc.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Chief Compliance Officer, The AIM Family of Funds®, INVESCO Private Capital Investments, Inc. (holding company), Invesco Private Capital, Inc. (registered investment adviser) and Invesco Senior Secured Management, Inc. (registered investment adviser); Vice President, Invesco Aim Distributors, Inc. and Invesco Aim Investment Services, Inc.	N/A
		Formerly: Senior Vice President and Chief Compliance Officer, Invesco Aim Advisors, Inc. and Invesco Aim Capital Management, Inc.; Chief Compliance Officer, Invesco Global Asset Management (N.A.), Inc.; Vice President, Invesco Aim Capital Management, Inc. and Fund Management Company

The Statement of Additional Information of the Trust includes additional information about the Fund’s Trustees and is available upon request, without charge, by calling 1.800.959.4246. Please refer to the Fund’s prospectus for information on the Fund’s sub-advisers.

Office of the Fund 11 Greenway Plaza, Suite 100 Houston, TX 77046-1173	Investment Adviser Invesco Advisers, Inc. 1555 Peachtree Street, N.E. Atlanta, GA 30309	Distributor Invesco Aim Distributors, Inc. 11 Greenway Plaza, Suite 100 Houston, TX 77046-1173	Auditors PricewaterhouseCoopers LLP 1201 Louisiana Street, Suite 2900 Houston, TX 77002-5678
Counsel to the Fund Stradley Ronon Stevens & Young, LLP 2600 One Commerce Square Philadelphia, PA 19103	Counsel to the Independent Trustees Kramer, Levin, Naftalis & Frankel LLP 1177 Avenue of the Americas New York, NY 10036-2714	Transfer Agent Invesco Aim Investment Services, Inc. P.O. Box 4739 Houston, TX 77210-4739	Custodian State Street Bank and Trust Company 225 Franklin Boston, MA 02110-2801

T-2

AIM V.I. Diversified Income Fund
Annual Report to Shareholders § December 31, 2009

The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter-ends. For the second and fourth quarters, the lists appear in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The Fund’s Form N-Q filings are available on the SEC website, sec.gov. Copies of the Fund’s Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers for the Fund are 811-07452 and 033-57340. The Fund’s most recent portfolio holdings, as filed on Form N-Q, have also been made available to insurance companies issuing variable annuity contracts and variable life insurance policies (“variable products”) that invest in the Fund.

A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, from our Client Services department at 800 410 4246 or on the Invesco Aim website, invescoaim.com. On the home page, scroll down and click on Proxy Policy. The information is also available on the SEC website, sec.gov.

Information regarding how the Fund voted proxies related to its portfolio securities during the 12 months ended June 30, 2009, is available at our website, invescoaim.com. Click the About Us tab at the top of the home page; click Legal Information; and then click Proxy Voting Search. The information is also available on the SEC website, sec.gov.

Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Aim Distributors, Inc. is the U.S. distributor for Invesco Ltd.’s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd.

This report must be accompanied or preceded by a currently effective Fund prospectus and variable product prospectus, which contain more complete information, including sales charges and expenses. Investors should read each carefully before investing.

Invesco Aim Distributors, Inc.

NOT FDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEE

Management’s Discussion of Fund Performance

Performance summary

For the year ended December 31, 2009, Series I shares of AIM V.I. Diversified Income Fund, excluding variable product issuer charges, outperformed the Fund’s broad market index, but underperformed its style-specific index. Our underweight exposure to corporate credit was the largest detractor from performance relative to our style-specific index, which is primarily investment-grade corporate credit in composition. Outperformance of the broad market index was due to our underweight positions in government bond sectors, which underperformed other credit sectors.

     Your Fund’s long-term performance appears later in this report.

Fund vs. Indexes

Total returns, 12/31/08 to 12/31/09, excluding variable product issuer charges.

If variable product issuer charges were included, returns would be lower.

Series I Shares	11.08	%
Series II Shares	10.89
Barclays Capital U.S. Aggregate Index6 (Broad Market Index)	5.93
Barclays Capital U.S. Credit Index6 (Style-Specific Index)	16.04
Lipper VUF Corporate Debt BBB-Rated Funds Index6 (Peer Group Index)	15.37

⁶ Lipper Inc.

How we invest

We invest primarily in fixed-rate U.S. dollar-denominated corporate bonds. We may invest up to 40% of total assets in foreign securities. Up to 35% of the Fund’s assets may be invested in lower quality, high yield debt securities; however, we have historically stayed closer to a 10% allocation to this asset class. The Fund may invest in derivative instruments such as futures contracts and swap agreements, including but not limited to credit default swaps, and engage in mortgage dollar roll transactions, a form of repurchase agreement activity in the to-be-announced (TBA) market for agency mortgage-backed securities (MBS).

     Consistent with our investment philosophy and belief that markets are increasingly complex, we use a distributed approach to decision making where proven specialists closest to the information have authority to make decisions. Investment decisions are made continuously and shared instantly for timely implementation in our portfolios. This is true for fundamental research decisions, macro decisions and security selection decisions, all made by specialists.

     We record and measure the performance of every investment decision. In this way, we develop a detailed understanding of the quality and skill of our decision makers to enhance quality control.

     We implement investment decisions made by specialists into portfolios. We believe that this separation of construction from decision making ensures objectivity in the investment process by removing behavioral biases linked to historic performance that may arise in portfolios where there is a sole decision maker also responsible for portfolio positioning. The primary role of the portfolio manager is the efficient implementation of investment decisions within portfolios. The portfolio managers work closely with sector specialists and traders to determine how best to express each investment decision at the security level.

     Our risk management process combines the evaluation of expected portfolio risks, a strong commitment to oversight of portfolio construction and actual performance and risk oversight. There are four key components to the investment risk management process applied within Invesco Fixed Income, namely;

n	Design: Portfolio Design Calculator/ Alpha Source Oversight.
n	Decisions: Decision Quality Analysis.
n	Portfolio Construction: Portfolio Management Oversight.
n	Invesco Fixed Income Oversight: Global Investment Policy Committee.

     Each investment decision is assigned to an individual within the firm. Specialists are required to explain the rationale behind every investment decision thereby enabling the firm to distinguish skill from good fortune. Each security includes pricing review levels. The upper level is the objective that the security is expected to reach, whereas the lower level is the point at which the rationale for persisting with the position must be reevaluated by the specialist. Specialists receive alerts from our proprietary investment system when a security is approaching or has reached these levels. While specialists are not forced to sell when these levels are reached, the investment decision must be reevaluated. Pricing levels are monitored continuously by senior management, which is integral to the firm’s risk management oversight.

     In addition to the realignment of a security’s valuation targets, sell decisions may also be based on:

n	A conscious decision to alter the Fund’s macro risk exposure (for example, duration, yield curve positioning, sector exposure).
n	The need to limit or reduce exposure to a particular sector or issuer.
n	Degradation of an issuer’s credit quality.
n	Presentation of a better relative value opportunity.

Portfolio Composition
By industry

U.S. Treasury Securities		10.2	%
Other Diversified Financial Services		9.5
Investment Banking & Brokerage		5.8
Electric Utilities		4.1
Integrated Telecommunication Services		3.8
Diversified Banks		3.2
Other Industries, Each with Less Than 3% of Total Net Assets		56.0
Money Market Funds Plus Other Assets Less Liabilities		7.4
Top 10 Fixed Income Issuers*
1. U.S. Treasury Bonds		6.7	%
2. U.S. Treasury Notes		3.5
3. Morgan Stanley		2.5
4. Citigroup Inc.		2.2
5. DirecTVHoldings LLC/DirecTV Financing Co. Inc.		2.2
6. General Electric Capital Corp.		1.6
7. DCP Midstream LLC		1.6
8. MetLife Inc.		1.6
9. Anadarko Petroleum Corp.		1.6
10. COX Communications Inc.		1.5
Total Net Assets	$	24.6 million
Total Number of Holdings*		261

The Fund’s holdings are subject to change, and there is no assurance that the Fund will continue to hold any particular security.

* Excluding money market fund holdings.

AIM V.I. Diversified Income Fund

Market conditions and your Fund

The global economic environment at the beginning of 2009 was characterized by the carryover of 2008’s financial market turmoil, which contributed to one of the weakest economic periods on record.¹ Gross domestic product (GDP), the broadest measure of overall U.S. economic activity, reflected a shrinking economy during the first half of 2009 before turning positive during the second half of the year.¹

     The U.S. Federal Reserve Board (the Fed) maintained a very accommodative monetary policy through the Fund’s fiscal year, with the federal funds target rate unchanged in its range of zero to 0.25%.² The Fed also continued programs of quantitative easing by buying up U.S. Treasuries, agency MBS and agency debentures. In doing so, the Fed worked to stimulate economic recovery by keeping long-term interest rates low and making more money available to consumers and businesses.²

     Beginning in early 2009, demand for credit sensitive bonds returned. Renewed concerns about future inflation and the ability of the market to absorb heavy government issuance pushed government bond yields higher (and prices lower) throughout 2009, especially for intermediate and longer maturity Treasuries.³ In fact, U.S. Treasury 10-year note and 30-year bond returns had their worst year of performance on record in 2009 following one of their best years on record.

     With this market environment as a backdrop, sector allocation and security selection were dominant factors affecting Fund performance relative to the style-specific index.⁴

     For the year, corporate credit outperformed government bonds, MBS and cash, and our underweight corporate credit was a detractor to performance relative to our corporate credit oriented style-specific index. Investment-grade credit, the largest sector exposure within the Fund, was maintained chiefly through the cash bond market, but also with credit derivatives carried over from 2008 that were sold during the first quarter. An overweight in the financials sector had a negative effect on Fund performance during the first quarter of 2009 when this sector was among the worst within the bond market.⁴

     From the second quarter on, our overall credit allocation rallied strongly, outperforming the government bonds and structured securities positions held in the Fund. The Fund’s structured securities exposure was mostly in agency MBS passthroughs and TBAs. Although MBS returns were positive for the year, their performance lagged returns of the corporate credit and negatively influenced performance versus the style-specific index. The Fund maintained an investment-grade average credit quality, but benefited from tactical allocations to lower quality high yield bonds, as higher quality issues underperformed lower quality issues during the year. Allocations to emerging markets also proved beneficial as the emerging market bond sector was one of the top-performing areas of the bond market in 2009⁴.

     Security selection was a contributor to Fund performance for the year. Time Warner Cable’s positive contribution exemplified the performance of credits whose credit spread (the yield difference over comparable Treasuries that investors require for taking credit risk) tightened significantly over the year, pushing prices higher. Weaker performers within the portfolio included several financial sector securities, such as a Citicorp Lease, whose credit spreads did not fully participate in the credit recovery experienced by the broader market. We sold the holding.

     Duration management had a negative impact on performance relative to our style-specific index during 2009. The portfolio was generally long duration (more price sensitive to interest rate movements than the benchmark) during the first half of the year as rates rose, putting downward pressure on bond prices. The Fund was generally shorter in duration (less price sensitive to interest rate movements than the benchmark) during the second half of the year, and did not fully benefit from the positive impact of falling rates on bond prices. We regularly use U.S. Treasury bond futures contracts as an efficient means for managing the Fund’s duration.

     While the yield curve fluctuated greatly over the year, the general steepening of the curve was a negative factor in Fund performance relative to the style-specific index. We positioned the portfolio for a flattening of the yield curve (long maturities falling more than short rates) during the second quarter of 2009, which negatively affected performance. In June, the portfolio returned to a neutral stance and remained there for the rest of the year.

     Thank you for your investment in AIM V.I. Diversified Income Fund.

1	U.S. Bureau of Economic Analysis
2	Federal Reserve Board
3	Bloomberg L.P.
4	Barclays Capital

The views and opinions expressed in management’s discussion of Fund performance are those of Invesco Advisers, Inc. These views and opinions are subject to change at any time based on factors such as market and economic conditions. These views and opinions may not be relied upon as investment advice or recommendations, or as 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 Invesco Advisers, Inc. 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.

See important Fund and index disclosures later in this report.

Chuck Burge

Senior portfolio manager, is manager of AIM V.I. Diversified Income Fund. He joined Invesco Aim in 2002. Mr. Burge earned a B.S. in economics from Texas A&M University and an M.B.A. in finance and accounting from Rice University.

Cynthia Brien

Chartered Financial Analyst, portfolio manager, is manager of AIM V.I. Diversified Income Fund. She joined Invesco Aim in 1996. Ms. Brien earned a B.B.A. from The University of Texas at Austin. She is a director, and a past president, of the CFA Society of Houston.

Peter Ehret

Chartered Financial Analyst, senior portfolio manager, is manager of AIM V.I. Diversified Income Fund. Mr. Ehret joined Invesco Aim in 2001. He graduated cum laude with a B.S. in economics from the University of Minnesota. He also earned an M.S. in real estate appraisal and investment analysis from the University of Wisconsin-Madison.

Darren Hughes

Chartered Financial Analyst, senior portfolio manager, is manager of AIM V.I. Diversified Income Fund. He joined Invesco Aim in 1992. Mr. Hughes earned a B.B.A. in finance and economics from Baylor University.

AIM V.I. Diversified Income Fund

Your Fund’s Long-Term Performance

Results of a $10,000 Investment — Oldest Share Class since Inception
Index data from 4/30/93, Fund data from 5/5/93

1 Lipper Inc.

Past performance cannot guarantee comparable future results.

     This chart, which is a logarithmic chart, presents the fluctuations in the value of the Fund and its indexes. We believe that a logarithmic chart is more effective than other types of charts in illustrating changes in value during the early years shown in the chart. The vertical axis, the one that indicates the dollar value of an investment, is constructed with each segment representing a percent change in the value of the investment. In this chart, each segment represents a doubling, or 100% change, in the value of the investment. In other words, the space between $5,000 and $10,000 is the same size as the space between $10,000 and $20,000, and so on.

Average Annual Total Returns
As of 12/31/09

Series I Shares
Inception (5/5/93)	3.73	%
10 Years	2.28
5 Years	0.47
1 Year	11.08
Series II Shares
10 Years	2.04	%
5 Years	0.24
1 Year	10.89

Series II shares’ inception date is March 14, 2002. Returns since that date are historical. All other returns are the blended returns of the historical performance of Series II shares since their inception and the restated historical performance of Series I shares (for periods prior to inception of Series II shares) adjusted to reflect the Rule 12b-1 fees applicable to Series II shares. The inception date of Series I shares is May 5, 1993. The performance of the Fund’s Series I and Series II share classes will differ primarily due to different class expenses.

     The performance data quoted represent past performance and cannot guarantee comparable future results; current performance may be lower or higher. Please contact your variable product issuer or financial adviser for the most recent month-end variable product performance. Performance figures reflect Fund expenses, reinvested distributions and changes in net asset value. Investment return and principal value will fluctuate so that you may have a gain or loss when you sell shares.

     The net annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 0.75% and 1.00%, respectively.¹ The total annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 1.31% and 1.56%, respectively. The expense ratios presented above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

     AIM V.I. Diversified Income Fund, a series portfolio of AIM Variable Insurance Funds, is currently offered through insurance companies issuing variable products. You cannot purchase shares of the Fund directly. Performance figures given represent the Fund and are not intended to reflect actual variable product values. They do not reflect sales charges, expenses and fees assessed in connection with a variable product. Sales charges, expenses and fees, which are determined by the variable product issuers, will vary and will lower the total return.

     The most recent month-end performance data at the Fund level, excluding variable product charges, is available on the Invesco Aim automated information line, 866 702 4402. As mentioned above, for the most recent month-end performance including variable product charges, please contact your variable product issuer or financial adviser.

     Had the adviser not waived fees and/ or reimbursed expenses, performance would have been lower.

1 Total annual operating expenses less any contractual fee waivers and/or expense reimbursements by the adviser in effect through at least April 30, 2011. See current prospectus for more information.

AIM V.I. Diversified Income Fund

AIM V.I. Diversified Income Fund’s investment objective is to achieve a high level of current income.

n	Unless otherwise stated, information presented in this report is as of December 31, 2009, and is based on total net assets.
n	Unless otherwise noted, all data provided by Invesco.

Principal risks of investing in the Fund

The Fund may invest in debt securities, such as notes and bonds, which carry interest rate and credit risk.

     Investing in developing countries can add additional risk, such as high rates of inflation or sharply devalued currencies against the U.S. dollar. Transaction costs are often higher, and there may be delays in settlement procedures.

     Prices of equity securities change in response to many factors, including the historical and prospective earnings of the issuer, the value of its assets, general economic conditions, interest rates, investor perceptions and market.

     Foreign securities have additional risks, including exchange rate changes, political and economic upheaval, relative lack of information, relatively low market liquidity, and the potential lack of strict financial and accounting controls and standards.

     The Fund may invest in lower quality debt securities, commonly known as “junk bonds.” Compared to higher quality debt securities, junk bonds involve greater risk of default or price changes due to changes in credit quality of the issuer because they are generally unsecured and may be subordinated to other creditors’ claims. Credit ratings on junk bonds do not necessarily reflect their actual market risk.

     Leveraging entails risks such as magnifying changes in the value of the portfolio’s securities.

     There is no guarantee that the investment techniques and risk analysis used by the Fund’s portfolio managers will produce the desired results.

     The prices of securities held by the Fund may decline in response to market risks.

     The Fund may use enhanced investment techniques such as derivatives. The principal risk of derivatives is that the fluctuations in their values may not correlate perfectly with the overall securities markets. Derivatives are subject to counterparty risk—the risk that the other party will not complete the transaction with the Fund.

     The Fund may invest in mortgage- and asset-backed securities. These securities are subject to prepayment or call risk, which is the risk that payments from the borrower may be received earlier or later than expected due to changes in the rate at which the underlying loans are prepaid.

     The Fund may engage in active and frequent trading of portfolio securities to achieve its investment objective. If a fund does trade in this way, it may incur increased costs, which can lower the actual return of the fund. Active trading may also increase short term gains and losses, which may affect taxes that must be paid.

About indexes used in this report

The Barclays Capital U.S. Credit Index is an unmanaged index considered representative of publicly issued, SEC-registered U.S. corporate and specified foreign debentures and secured notes.

     The Barclays Capital U.S. Aggregate Index is an unmanaged index considered representative of the U.S. investment-grade, fixed-rate bond market.

     The Lipper VUF Corporate Debt BBB-Rated Funds Index is an unmanaged index considered representative of corporate debt BBB-rated variable insurance underlying funds tracked by Lipper.

     The Fund is not managed to track the performance of any particular index, including the indexes defined here, and consequently, the performance of the Fund may deviate significantly from the performance of the indexes.

     A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of a peer group reflects fund expenses; performance of a market index does not.

Other information

The Chartered Financial Analyst^® (CFA^®) designation is globally recognized and attests to a charterholder’s success in a rigorous and comprehensive study program in the field of investment management and research analysis.

     The returns shown in management’s discussion of Fund performance are based on net asset values calculated for shareholder transactions. Generally accepted accounting principles require adjustments to be made to the net assets of the Fund at period end for financial reporting purposes, and as such, the net asset values for shareholder transactions and the returns based on those net asset values may differ from the net asset values and returns reported in the Financial Highlights. Additionally, the returns and net asset values shown throughout this report are at the Fund level only and do not include variable product issuer charges. If such charges were included, the total returns would be lower.

     Industry classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s.

AIM V.I. Diversified Income Fund

Schedule of Investments^(a)

December 31, 2009

	Principal
	Amount		Value
Bonds & Notes–77.39%
Advertising–0.14%
Lamar Media Corp., Sr. Unsec. Gtd. Sub. Global Notes, 7.25%, 01/01/13	$	35,000	$	35,000
Aerospace & Defense–1.42%
Alliant Techsystems Inc., Sr. Unsec. Gtd. Sub. Notes, 6.75%, 04/01/16		25,000		24,875
BAE Systems Holdings Inc., Sr. Unsec. Gtd. Notes,
4.95%, 06/01/14(b)		65,000		66,840
6.38%, 06/01/19(b)		90,000		95,830
BE Aerospace, Inc., Sr. Unsec. Unsub. Notes, 8.50%, 07/01/18		25,000		26,625
L-3 Communications Corp., Sr. Notes, 5.20%, 10/15/19(b)		135,000		135,506
				349,676
Agricultural Products–0.65%
Bunge Limited Finance Corp., Sr. Unsec. Gtd. Notes, 8.50%, 06/15/19		140,000		159,801
Airlines–2.23%
American Airlines Pass Through Trust,
–Series 2001-2, Class A-1, Sec. Global Pass Through Ctfs.,
6.98%, 04/01/11		32,764		32,723
–Series 2009-1A, Sec. Pass Through Ctfs., 10.38%, 07/02/19		45,000		50,569
Continental Airlines Inc., Pass Through Ctfs.,
9.00%, 07/08/16		210,000		225,356
Series A,
Global Pass Through Ctfs.,
7.25%, 11/10/19		55,000		56,478
Delta Air Lines, Inc., Sr. Sec. Notes,
9.50%, 09/15/14(b)		10,000		10,450
–Series A,
Pass Through Ctfs.,
7.75%, 12/17/19		70,000		72,406
Series 2002-1, Class C,
Sec. Pass Through Ctfs., 7.78%, 01/02/12		15,539		15,073
United Air Lines Inc., Gtd. Global Pass Through Ctfs.,
9.75%, 01/15/17		30,000		31,069
Sr. Sec. Gtd. Global Pass Through Ctfs., 10.40%, 11/01/16		50,000		53,281
				547,405
Alternative Carriers–0.32%
Intelsat Intermediate Holding Co. Ltd. (Bermuda), Sr. Unsec. Gtd. Disc. Global Notes, 9.50%, 02/01/15(c)		35,000		36,137
Level 3 Financing Inc., Sr. Unsec. Gtd. Unsub. Global Notes, 9.25%, 11/01/14		45,000		43,200
				79,337
Aluminum–0.10%
Novelis Inc. (Canada), Sr. Unsec. Gtd. Global Notes, 7.25%, 02/15/15		25,000		24,000
Apparel Retail–0.69%
Collective Brands, Inc., Sr. Unsec. Gtd. Sub. Global Notes, 8.25%, 08/01/13		50,000		51,125
Limited Brands Inc., Sr. Notes, 8.50%, 06/15/19(b)		50,000		54,125
TJX Companies, Inc. (The), Sr. Unsec. Notes, 6.95%, 04/15/19		55,000		63,822
				169,072
Asset Management & Custody Banks–0.31%
Bank of New York Mellon Corp. (The), Sr. Unsec. Notes, 4.30%, 05/15/14		50,000		52,679
Graham Packaging Co. L.P./GPC Capital Corp. I, Sr. Gtd. Notes, 8.25%, 01/01/17(b)		25,000		24,688
				77,367
Auto Parts & Equipment–0.17%
Allison Transmission Inc., Sr. Unsec. Gtd. Notes, 11.00%, 11/01/15(b)		25,000		26,437
Tenneco Inc., Sr. Unsec. Gtd. Global Notes, 8.13%, 11/15/15		15,000		15,225
				41,662
Automobile Manufacturers–0.20%
Case New Holland Inc., Sr. Unsec. Gtd. Unsub. Notes, 7.75%, 09/01/13(b)		25,000		25,562
Ford Motor Co., Sr. Unsec. Unsub. Global Notes, 7.45%, 07/16/31		25,000		22,375
				47,937
Automotive Retail–0.92%
AutoZone Inc., Sr. Unsec. Notes, 5.75%, 01/15/15		210,000		225,648
Brewers–0.37%
Anheuser-Busch InBev Worldwide Inc., Sr. Unsec. Gtd. Unsub. Notes, 4.13%, 01/15/15(b)		90,000		91,297
Broadcasting–2.32%
Belo Corp., Sr. Unsec. Unsub. Notes,
6.75%, 05/30/13		25,000		24,750
8.00%, 11/15/16		25,000		25,750
Clear Channel Worldwide Holdings Inc., Sr. Unsec. Gtd. Unsub. Notes, 9.25%, 12/15/17(b)		25,000		25,875

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

AIM V.I. Diversified Income Fund

	Principal
	Amount		Value
Broadcasting–(continued)
COX Communications Inc., Sr. Unsec. Bonds,
8.38%, 03/01/39(b)	$	75,000	$	92,096
Sr. Unsec. Global Notes,
5.45%, 12/15/14		95,000		102,028
Sr. Unsec. Notes,
9.38%, 01/15/19(b)		140,000		176,059
COX Enterprises Inc., Sr. Unsec. Notes, 7.88%, 09/15/10(b)		120,000		124,850
				571,408
Building Products–0.46%
Building Materials Corp. of America, Sec. Gtd. Second Lien Global Notes, 7.75%, 08/01/14		50,000		49,750
Goodman Global Group Inc., Sr. Disc. Notes, 11.70%, 12/15/14(b)(d)		20,000		11,400
Ply Gem Industries Inc., Sr. Sec. Gtd. First & Second Lien Global Notes, 11.75%, 06/15/13		35,000		35,175
USG Corp., Sr. Unsec. Gtd. Notes, 9.75%, 08/01/14(b)		15,000		16,012
				112,337
Cable & Satellite–2.76%
Cablevision Systems Corp., Sr. Notes, 8.63%, 09/15/17(b)		25,000		26,156
DirecTV Holdings LLC/DirecTV Financing Co. Inc., Sr. Unsec. Gtd. Unsub. Global Notes, 7.63%, 05/15/16		350,000		383,250
Sr. Unsec. Gtd. Unsub. Notes,
4.75%, 10/01/14(b)		160,000		163,111
Time Warner Cable Inc., Sr. Unsec. Gtd. Unsub. Notes, 5.00%, 02/01/20		60,000		58,584
XM Satellite Radio Inc., Sr. Sec. Notes, 11.25%, 06/15/13(b)		45,000		48,262
				679,363
Casinos & Gaming–0.53%
MGM Mirage, Sr. Sec. Notes,
11.13%, 11/15/17(b)		15,000		16,725
Sr. Unsec. Gtd. Unsub. Notes,
8.50%, 09/15/10		25,000		25,000
Pinnacle Entertainment, Inc., Sr. Notes, 8.63%, 08/01/17(b)		30,000		30,600
Snoqualmie Entertainment Authority, Sr. Sec. Floating Rate Notes, 4.68%, 02/01/14(b)(e)		15,000		7,950
Wynn Las Vegas Capital LLC/Corp., Sec. First Mortgage Notes, 7.88%, 11/01/17(b)		50,000		50,875
				131,150
Communications Equipment–0.04%
Corning Inc., Sr. Unsec. Unsub. Notes, 6.63%, 05/15/19		10,000		10,788
Computer Hardware–0.65%
Hewlett-Packard Co., Sr. Unsec. Global Notes, 4.75%, 06/02/14		55,000		58,849
International Business Machines Corp., Sr. Unsec. Unsub. Global Notes, 2.10%, 05/06/13		100,000		100,062
				158,911
Computer Storage & Peripherals–0.11%
Seagate Technology International, Sr. Sec. Gtd. Notes, 10.00%, 05/01/14(b)		25,000		27,813
Construction Materials–0.46%
Holcim U.S. Finance Sarl & Cie SCS (Switzerland), Gtd. Notes, 6.00%, 12/30/19(b)		110,000		113,418
Construction, Farm Machinery & Heavy Trucks–0.25%
CNH America LLC, Sr. Unsec. Gtd. Notes, 7.25%, 01/15/16		25,000		24,813
Navistar International Corp., Sr. Unsec. Gtd. Notes, 8.25%, 11/01/21		25,000		25,656
Titan International, Inc., Sr. Unsec. Gtd. Global Notes, 8.00%, 01/15/12		10,000		9,850
				60,319
Consumer Finance–0.27%
Ford Motor Credit Co. LLC, Sr. Unsec. Notes, 8.00%, 12/15/16		65,000		65,325
Data Processing & Outsourced Services–0.20%
First Data Corp., Sr. Unsec. Gtd. Global Notes, 9.88%, 09/24/15		25,000		23,312
SunGard Data Systems Inc., Sr. Unsec. Gtd. Sub. Global Notes, 10.25%, 08/15/15		25,000		26,750
				50,062
Diversified Banks–3.19%
Barclays Bank PLC (United Kingdom), Sr. Unsec. Unsub. Global Notes, 6.75%, 05/22/19		155,000		174,655
ING Bank N.V. (Netherlands), Unsec. Sub. Bonds, 5.13%, 05/01/15(b)		100,000		100,066
JPMorgan Chase Capital XXVII–Series AA, Jr. Unsec. Gtd. Sub. Notes, 7.00%, 11/01/39		160,000		163,291
Lloyds TSB Bank PLC (United Kingdom), Sr. Unsec. Unsub. Floating Rate Medium-Term Euro Notes, 3.78%, 04/17/14(e)		81,000		84,592
Standard Chartered PLC (United Kingdom), Sr. Notes, 5.50%, 11/18/14(b)		55,000		58,010
Wachovia Corp.–Series G, Sr. Unsec. Medium-Term Notes, 5.50%, 05/01/13		50,000		53,534
Wells Fargo & Co., Sr. Unsec. Unsub. Global Notes, 4.38%, 01/31/13		145,000		150,433
				784,581

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

AIM V.I. Diversified Income Fund

	Principal
	Amount		Value
Diversified Capital Markets–0.42%
UBS AG (Switzerland), Sr. Unsec. Medium-Term Notes, 5.75%, 04/25/18	$	100,000	$	102,400
Diversified Metals & Mining–0.29%
Rio Tinto Finance USA Ltd. (United Kingdom), Sr. Unsec. Gtd. Global Notes, 8.95%, 05/01/14		60,000		71,955
Drug Retail–1.18%
CVS Caremark Corp., Unsec. Notes, 6.60%, 03/15/19		190,000		208,007
Rite Aid Corp., Sr. Sec. Gtd. Notes,
10.38%, 07/15/16		50,000		53,750
Sr. Sec. Unsub. Global Notes,
9.75%, 06/12/16		25,000		27,344
				289,101
Electric Utilities–4.05%
Carolina Power & Light Co., Sec. First Mortgage Bonds, 5.30%, 01/15/19		40,000		41,800
DCP Midstream LLC, Notes,
9.70%, 12/01/13(b)		100,000		116,373
Sr. Unsec. Notes,
7.88%, 08/16/10		200,000		208,530
Sr. Unsec. Unsub. Notes,
9.75%, 03/15/19(b)		55,000		67,280
Enel Finance International S.A. (Luxembourg), Sr. Unsec. Gtd. Notes, 3.88%, 10/07/14(b)		100,000		101,333
Indiana Michigan Power Co.–Series I, Sr. Unsec. Unsub. Notes, 7.00%, 03/15/19		140,000		156,756
LSP Energy L.P./LSP Batesville Funding Corp.–Series D, Sr. Sec. Bonds, 8.16%, 07/15/25		25,000		16,875
Ohio Power Co.–Series 1, Sr. Unsec. Notes, 5.38%, 10/01/21		180,000		182,991
PPL Electric Utilities Corp., Sec. First Mortgage Bonds, 6.25%, 05/15/39		45,000		47,502
Virginia Electric & Power Co., Sr. Unsec. Unsub Notes, 5.00%, 06/30/19		55,000		55,690
				995,130
Electrical Components & Equipment–0.11%
Belden Inc., Sr. Gtd. Sub. Notes, 9.25%, 06/15/19(b)		25,000		26,500
Electronic Manufacturing Services–0.06%
Jabil Circuit, Inc., Sr. Unsec. Notes, 7.75%, 07/15/16		15,000		15,863
Gold–1.47%
Newmont Mining Corp., Sr. Unsec. Gtd. Notes, 5.13%, 10/01/19		145,000		145,993
6.25%, 10/01/39		215,000		216,468
				362,461
Health Care Equipment–0.36%
Boston Scientific Corp., Sr. Unsec. Unsub. Notes, 6.00%, 01/15/20		85,000		87,346
Health Care Facilities–0.43%
HCA, Inc., Sec. Gtd. Global Notes,
9.25%, 11/15/16		25,000		27,062
Sr. Sec. Gtd. Notes,
7.88%, 02/15/20(b)		50,000		52,375
Tenet Healthcare Corp., Sr. Unsec. Notes, 7.38%, 02/01/13		25,000		25,188
				104,625
Health Care Services–1.74%
Express Scripts Inc., Sr. Unsec. Gtd. Global Notes,
5.25%, 06/15/12		45,000		47,939
6.25%, 06/15/14		125,000		137,190
7.25%, 06/15/19		40,000		45,779
Orlando Lutheran Towers Inc., Putable Bonds,
7.75%, 07/01/11		45,000		44,900
8.00%, 07/01/17		125,000		125,348
US Oncology Inc., Sr. Sec. Gtd. Global Notes, 9.13%, 08/15/17		25,000		26,375
				427,531
Hotels, Resorts & Cruise Lines–0.84%
Hyatt Hotels Corp., Sr. Unsec. Unsub. Notes, 5.75%, 08/15/15(b)		165,000		170,198
Starwood Hotels & Resorts Worldwide, Inc., Sr. Unsec. Unsub. Notes, 7.15%, 12/01/19		35,000		35,175
				205,373
Independent Power Producers & Energy Traders–0.43%
AES Corp. (The), Sr. Unsec. Notes, 9.75%, 04/15/16(b)		50,000		55,000
NRG Energy, Inc., Sr. Unsec. Gtd. Notes,
7.38%, 02/01/16		25,000		25,125
Sr. Unsec. Gtd. Unsub. Notes,
7.38%, 01/15/17		25,000		25,187
				105,312
Industrial Conglomerates–1.01%
Hutchison Whampoa International Ltd. (Cayman Islands), Gtd. Notes,
5.75%, 09/11/19(b)		100,000		99,033
Sr. Unsec. Gtd. Notes,
7.63%, 04/09/19(b)		130,000		149,617
				248,650

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

AIM V.I. Diversified Income Fund

	Principal
	Amount		Value
Insurance Brokers–0.81%
Marsh & McLennan Cos. Inc., Sr. Unsec. Notes,
5.15%, 09/15/10	$	75,000	$	76,733
9.25%, 04/15/19		100,000		123,037
				199,770
Integrated Oil & Gas–1.25%
Lukoil International Finance B.V. (Netherlands), Sr. Unsec. Gtd. Unsub. Notes, 6.38%, 11/05/14(b)		300,000		306,348
Integrated Telecommunication Services–3.83%
AT&T Inc., Sr. Unsec. Unsub. Global Notes, 6.55%, 02/15/39		70,000		74,261
British Telecommunications PLC (United Kingdom), Sr. Unsec. Unsub. Global Notes, 9.13%, 12/15/10		250,000		267,912
Cellco Partnership/ Verizon Wireless Capital LLC, Sr. Unsec. Unsub. Global Notes, 7.38%, 11/15/13		140,000		161,183
Qwest Communications International Inc., Sr. Unsec. Gtd. Notes, 8.00%, 10/01/15(b)		25,000		25,875
Telefonica Europe B.V. (Netherlands), Unsec. Gtd. Unsub. Global Notes, 7.75%, 09/15/10		200,000		209,482
Telemar Norte Leste S.A. (Brazil), Sr. Unsec. Notes, 9.50%, 04/23/19(b)		125,000		148,673
Wind Acquisition Finance S.A. (Luxembourg), Sr. Sec. Gtd. Sub. Notes, 11.75%, 07/15/17(b)		50,000		55,000
				942,386
Investment Banking & Brokerage–5.81%
E*Trade Financial Corp., Sr. Unsec. Unsub. Global Notes, 7.38%, 09/15/13		10,000		9,450
Goldman Sachs Group Inc. (The), Sr. Medium-Term Notes,
6.00%, 05/01/14		50,000		54,885
Unsec. Sub. Global Notes,
6.75%, 10/01/37		140,000		144,690
Jefferies Group Inc., Sr. Unsec. Notes, 6.45%, 06/08/27		375,000		316,994
Macquarie Group Ltd. (Australia), Sr. Unsec. Notes, 7.30%, 08/01/14(b)		110,000		120,968
Morgan Stanley, Sr. Unsec. Medium-Term Global Notes, 6.00%, 05/13/14		315,000		338,768
–Series F,
Sr. Unsec. Medium-Term Global Notes,
5.95%, 12/28/17		130,000		135,738
5.63%, 09/23/19		130,000		131,463
Schwab Capital Trust I, Jr. Unsec. Gtd. Sub. Variable Rate Notes, 7.50%, 11/15/37(e)		50,000		46,923
TD Ameritrade Holding Corp., Sr. Unsec. Gtd. Unsub. Notes,
4.15%, 12/01/14		15,000		14,848
5.60%, 12/01/19		115,000		114,707
				1,429,434
Leisure Facilities–0.14%
Universal City Development Partners Ltd., Sr. Notes,
8.88%, 11/15/15(b)		25,000		24,625
Sr. Sub. Notes,
10.88%, 11/15/16(b)		10,000		10,250
				34,875
Life & Health Insurance–2.54%
MetLife Inc., Sr. Unsec. Global Notes,
7.72%, 02/15/19		180,000		211,447
Sr. Unsec. Unsub. Notes,
6.75%, 06/01/16		155,000		174,793
Prudential Financial Inc., Jr. Unsec. Sub. Variable Rate Global Notes, 8.88%, 06/15/38(e)		130,000		137,745
–Series D, Sr. Unsec. Unsub. Medium-Term Notes, 7.38%, 06/15/19		90,000		101,763
				625,748
Mortgage Backed Securities–0.74%
U.S. Bank N.A., Sr. Unsec. Unsub. Medium-Term Global Notes, 5.92%, 05/25/12		172,231		182,951
Movies & Entertainment–0.46%
Cinemark USA Inc., Sr. Gtd. Notes, 8.63%, 06/15/19(b)		25,000		26,063
Time Warner Cable Inc., Sr. Unsec. Gtd. Unsub. Global Notes, 6.75%, 07/01/18		55,000		60,830
Tunica-Biloxi Gaming Authority, Sr. Unsec. Notes, 9.00%, 11/15/15(b)		30,000		27,150
				114,043
Multi-Line Insurance–1.22%
American Financial Group Inc., Sr. Unsec. Unsub. Notes, 9.88%, 06/15/19		180,000		201,805
Liberty Mutual Group Inc., Sr. Unsec. Notes, 5.75%, 03/15/14(b)		100,000		98,560
				300,365
Multi-Utilities–0.25%
Pacific Gas & Electric Co., Sr. Unsec. Unsub. Notes, 5.40%, 01/15/40		65,000		62,654
Office REIT’s–0.58%
Boston Properties L.P., Sr. Unsec. Unsub. Notes, 5.88%, 10/15/19		140,000		141,357
Oil & Gas Equipment & Services–0.04%
Bristow Group, Inc., Sr. Unsec. Gtd. Global Notes, 7.50%, 09/15/17		10,000		10,000
Oil & Gas Exploration & Production–2.83%
Anadarko Petroleum Corp., Sr. Unsec. Notes,
7.63%, 03/15/14		100,000		114,939
Sr. Unsec. Unsub. Global Notes,
5.75%, 06/15/14		250,000		270,916

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

AIM V.I. Diversified Income Fund

	Principal
	Amount		Value
Oil & Gas Exploration & Production–(continued)
Cimarex Energy Co., Sr. Unsec. Gtd. Notes, 7.13%, 05/01/17	$	50,000	$	50,687
Concho Resources Inc., Sr. Unsec. Gtd. Notes, 8.63%, 10/01/17		25,000		26,312
Continental Resources Inc., Sr. Unsec. Unsub. Notes, 8.25%, 10/01/19(b)		15,000		15,806
Encore Acquisition Co., Sr. Gtd. Sub. Notes, 9.50%, 05/01/16		10,000		10,563
McMoRan Exploration Co., Sr. Unsec. Gtd. Notes, 11.88%, 11/15/14		25,000		25,719
Petrobras International Finance Co. (Cayman Islands), Sr. Unsec. Gtd. Unsub. Global Notes, 5.75%, 01/20/20		40,000		40,606
6.88%, 01/20/40		45,000		46,033
Pioneer Natural Resources Co., Sr. Unsec. Notes, 7.50%, 01/15/20		25,000		25,188
Plains Exploration & Production Co., Sr. Unsec. Gtd. Unsub. Notes, 8.63%, 10/15/19		15,000		15,469
Range Resources Corp., Sr. Unsec. Gtd. Sub. Notes, 7.50%, 10/01/17		25,000		25,875
Southwestern Energy Co., Sr. Gtd. Global Notes, 7.50%, 02/01/18		25,000		26,687
				694,800
Oil & Gas Refining & Marketing–0.75%
Petronas Capital Ltd. (Malaysia), Unsec. Gtd. Unsub. Notes, 5.25%, 08/12/19(b)		100,000		100,124
Tesoro Corp., Sr. Unsec. Gtd. Unsub. Global Bonds, 6.50%, 06/01/17		15,000		14,025
United Refining Co.–Series 2, Sr. Unsec. Gtd. Global Notes, 10.50%, 08/15/12		75,000		71,063
				185,212
Oil & Gas Storage & Transportation–1.97%
Enterprise Products Operating LLC, Sr. Unsec. Gtd. Unsub. Global Notes, 6.13%, 10/15/39		125,000		121,295
Plains All American Pipeline L.P./ PAA Finance Corp., Sr. Unsec. Gtd. Unsub. Notes, 5.75%, 01/15/20		135,000		136,190
Spectra Energy Capital LLC, Sr. Unsec. Gtd. Notes, 5.65%, 03/01/20		155,000		157,564
Williams Cos., Inc., Sr. Unsec. Global Notes, 8.75%, 01/15/20		40,000		47,903
Williams Partners L.P./Williams Partners Finance Corp., Sr. Unsec. Global Notes, 7.25%, 02/01/17		20,000		20,400
				483,352
Other Diversified Financial Services–9.52%
Bank of America Corp., Sr. Unsec. Unsub. Global Notes, 6.50%, 08/01/16		130,000		140,458
Bear Stearns Cos. LLC (The), Sr. Unsec. Unsub. Floating Rate Notes, 0.68%, 07/19/10(e)		260,000		260,600
Cantor Fitzgerald L.P., Bonds, 7.88%, 10/15/19(b)		315,000		317,022
CDP Financial Inc. (Canada), Sr. Unsec. Gtd. Notes, 3.00%, 11/25/14(b)		275,000		269,577
Citigroup Inc., Sr. Unsec. Notes, 6.38%, 08/12/14		505,000		529,202
Countrywide Financial Corp., Sr. Unsec. Gtd. Unsub. Medium-Term Global Notes, 5.80%, 06/07/12		40,000		42,531
General Electric Capital Corp.–Series A, Sr. Unsec. Unsub. Medium-Term Global Notes, 6.88%, 01/10/39		380,000		393,557
JPMorgan Chase & Co., Sr. Unsec. Unsub. Global Notes,
4.75%, 05/01/13		15,000		15,854
6.30%, 04/23/19		145,000		160,968
Merrill Lynch & Co. Inc.–Series C, Sr. Unsec. Medium-Term Global Notes, 5.45%, 02/05/13		200,000		210,801
Twin Reefs Pass-Through Trust, Floating Rate Pass Through Ctfs., 1.39% (Acquired 12/07/04-04/03/06; Cost $130,332)(b)(e)(f)(g)		130,000		423
				2,340,993
Packaged Foods & Meats–0.15%
Del Monte Corp., Sr. Sub. Notes, 7.50%, 10/15/19(b)		10,000		10,325
Dole Food Co. Inc., Sr. Sec. Notes, 8.00%, 10/01/16(b)		25,000		25,687
				36,012
Paper Packaging–0.06%
Cascades Inc. (Canada), Sr. Gtd. Notes, 7.88%, 01/15/20(b)		10,000		10,175
Sealed Air Corp., Sr. Notes, 7.88%, 06/15/17(b)		5,000		5,342
				15,517
Paper Products–0.96%
Georgia-Pacific LLC, Deb., 7.70%, 06/15/15		25,000		26,375
International Paper Co., Sr. Unsec. Unsub. Global Bonds, 7.50%, 08/15/21		110,000		123,314
Mercer International Inc., Sr. Unsec. Global Notes, 9.25%, 02/15/13		105,000		86,363
				236,052
Personal Products–0.38%
Mead Johnson Nutrition Co., Sr. Unsec. Gtd. Unsub. Notes, 3.50%, 11/01/14(b)		95,000		94,493
Pharmaceuticals–0.31%
Valeant Pharmaceuticals International, Sr. Unsec. Gtd. Notes, 8.38%, 06/15/16(b)		25,000		25,875
Watson Pharmaceuticals Inc., Sr. Unsec. Global Notes, 5.00%, 08/15/14		50,000		51,260
				77,135
Property & Casualty Insurance–0.66%
CNA Financial Corp., Sr. Unsec. Unsub. Notes, 7.35%, 11/15/19		160,000		161,434

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

AIM V.I. Diversified Income Fund

	Principal
	Amount		Value
Publishing–0.20%
Nielsen Finance LLC/Co., Sr. Unsec. Gtd. Sub. Disc. Global Notes, 12.50%, 08/01/16(c)	$	25,000	$	22,937
Reed Elsevier Capital Inc., Sr. Unsec. Gtd. Unsub. Global Notes, 6.75%, 08/01/11		25,000		26,791
				49,728
Regional Banks–0.25%
PNC Capital Trust C, Jr. Unsec. Gtd. Sub. Floating Rate Trust Pfd. Capital Securities Bonds, 0.83%, 06/01/28(e)		100,000		61,293
Research & Consulting Services–1.45%
Erac USA Finance Co., Sr. Unsec.
Gtd. Notes,
7.00%, 10/15/37(b)		70,000		68,461
Unsec. Gtd. Notes,
5.80%, 10/15/12(b)		275,000		288,077
				356,538
Restaurants–1.31%
Yum! Brands Inc., Sr. Unsec. Notes, 5.30%, 09/15/19		320,000		322,781
Semiconductors–0.33%
Viasystems Inc., Sr. Unsec. Gtd. Global Notes, 10.50%, 01/15/11		80,000		80,000
Soft Drinks–0.50%
Coca-Cola Amatil Ltd. (Australia), Sr. Gtd. Notes, 3.25%, 11/02/14(b)		125,000		123,833
Sovereign Debt–1.85%
Brazilian Government International Bond (Brazil), Sr. Unsec. Unsub. Global Notes, 5.88%, 01/15/19		120,000		127,950
United Mexican States (Mexico), Sr. Unsec. Global Notes, 5.88%, 02/17/14		300,000		326,812
				454,762
Specialized Finance–0.25%
National Rural Utilities Cooperative Finance Corp., Sr. Sec. Notes, 2.63%, 09/16/12		60,000		60,710
Specialty Chemicals–0.06%
Huntsman International LLC, Sr. Unsec. Gtd. Sub. Global Notes, 7.88%, 11/15/14		15,000		14,888
Specialty Properties–0.56%
Healthcare Realty Trust Inc., Sr. Unsec. Notes, 6.50%, 01/17/17		140,000		137,239
Specialty Stores–0.89%
Sally Holdings LLC/Sally Capital Inc., Sr. Unsec. Gtd. Global Notes, 9.25%, 11/15/14		25,000		26,156
Staples Inc., Sr. Unsec. Gtd. Unsub. Global Notes, 9.75%, 01/15/14		25,000		30,547
Sr. Unsec. Gtd. Unsub. Notes,
7.75%, 04/01/11		150,000		161,240
				217,943
Steel–0.82%
ArcelorMittal (Luxembourg), Sr. Unsec. Unsub. Global Notes,
9.00%, 02/15/15		55,000		64,144
7.00%, 10/15/39		130,000		137,802
				201,946
Textiles–0.21%
Invista, Sr. Unsec. Unsub. Notes, 9.25%, 05/01/12(b)		50,000		51,000
Tires & Rubber–0.30%
Cooper Tire & Rubber Co., Sr. Unsec. Unsub. Notes, 7.63%, 03/15/27		25,000		21,750
Goodyear Tire & Rubber Co. (The), Sr. Unsec. Gtd. Unsub. Global Notes, 9.00%, 07/01/15		50,000		52,250
				74,000
Trading Companies & Distributors–0.10%
United Rentals North America, Inc., Sr. Unsec. Gtd. Global Notes, 6.50%, 02/15/12		25,000		25,063
Trucking–0.10%
Hertz Corp. (The), Sr. Unsec. Gtd. Global Notes, 8.88%, 01/01/14		25,000		25,688
Wireless Telecommunication Services–1.80%
American Tower Corp., Sr. Unsec. Notes, 4.63%, 04/01/15(b)		90,000		90,961
Clearwire Communications LLC/Clearwire Finance Inc., Sr. Sec. Gtd. Notes,
12.00%, 12/01/15(b)		5,000		5,125
12.00%, 12/01/15(b)		35,000		35,875
SBA Telecommunications Inc., Sr. Gtd. Notes,
8.00%, 08/15/16(b)		10,000		10,500
8.25%, 08/15/19(b)		25,000		26,469
Sprint Capital Corp., Sr. Unsec. Gtd. Unsub. Global Notes, 6.88%, 11/15/28		50,000		42,000
Sprint Nextel Corp., Sr. Unsec. Unsub. Notes, 8.38%, 08/15/17		10,000		10,225
Vodafone Group PLC (United Kingdom), Sr. Unsec. Unsub. Global Notes, 7.75%, 02/15/10		220,000		221,646
				442,801
Total Bonds & Notes (Cost $18,180,349)				19,031,068

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

AIM V.I. Diversified Income Fund

	Principal
	Amount		Value
U.S. Treasury Securities–10.19%
U.S. Treasury Notes–3.47%
1.50%, 12/31/13	$	875,000	$	852,168
U.S. Treasury Bonds–6.72%
5.38%, 02/15/31(h)		1,095,000		1,211,173
3.50%, 02/15/39		65,000		53,300
4.25%, 05/15/39		100,000		93,891
4.50%, 08/15/39		300,000		293,531
				1,651,895
Total U.S. Treasury Securities (Cost $2,582,074)				2,504,063
Asset-Backed Securities–2.04%
Countrywide Asset-Backed Ctfs.–Series 2007-4, Class A1B, Pass Through Ctfs., 5.81%, 09/25/37		95,015		93,779
Credit Suisse Mortgage Capital Ctfs.–Series 2009-2R, Class 1A11, Floating Rate Pass Through Ctfs., 3.10%, 09/26/34(b)(e)		152,630		146,098
TIAA Seasoned Commercial Mortgage Trust–Series 2007-C4, Class A2, Variable Rate Pass Through Ctfs., 5.79%, 08/15/39(e)		45,000		46,731
Wells Fargo Mortgage Backed Securities Trust–Series 2004-Z, Class 2A1, Floating Rate Pass Through Ctfs., 2.97%, 12/25/34(e)		229,941		216,105
Total Asset-Backed Securities (Cost $476,191)				502,713
U.S. Government Sponsored Mortgage-Backed Securities–1.97%
Federal Home Loan Mortgage Corp. (FHLMC)–0.94%
Pass Through Ctfs.,
6.50%, 05/01/16 to 08/01/32		13,055		14,093
6.00%, 05/01/17 to 12/01/31		68,889		73,859
5.50%, 09/01/17		48,979		52,146
7.00%, 08/01/21		80,909		89,955
				230,053
Federal National Mortgage Association (FNMA)–0.88%
Pass Through Ctfs.,
7.00%, 02/01/16 to 09/01/32		27,797		30,666
6.50%, 05/01/16 to 10/01/35		21,377		23,253
5.00%, 11/01/18		47,412		49,959
7.50%, 04/01/29 to 10/01/29		93,282		105,246
8.00%, 04/01/32		6,057		6,944
				216,068
Government National Mortgage Association (GNMA)–0.15%
Pass Through Ctfs.,
7.50%, 06/15/23		11,914		13,415
8.50%, 11/15/24		6,277		7,242
7.00%, 07/15/31 to 08/15/31		3,251		3,621
6.50%, 11/15/31 to 03/15/32		6,351		6,856
6.00%, 11/15/32		6,075		6,491
				37,625
Total U.S. Government Sponsored Mortgage-Backed Securities (Cost $450,897)				483,746
U.S. Government Sponsored Agency Securities–0.79%
Student Loan Marketing Association–0.79%
–Series-BED4, Sr. Unsec. Unsub. Floating Rate Medium-Term Notes, 0.56%, 03/15/10 (Cost $199,176)(e)		200,000		194,686
Municipal Obligations–0.22%
Florida (State of) Development Finance Corp. (Palm Bay Academy Inc.); Series 2006 B, Taxable RB, 7.50%, 05/15/17 (Cost $64,523)		65,000		53,698
	Shares
Common Stocks & Other Equity Interests–0.02%
Broadcasting–0.02%
Adelphia Communications Corp.,(i)		—		1,800
Adelphia Recovery Trust–Series ACC-1(i)		87,412		2,797
Total Common Stocks & Other Equity Interests (Cost $22,181)				4,597
Money Market Funds–6.43%
Liquid Assets Portfolio–Institutional Class(j)		791,064		791,064
Premier Portfolio–Institutional Class(j)		791,064		791,064
Total Money Market Funds (Cost $1,582,128)				1,582,128
TOTAL INVESTMENTS–99.05% (Cost $23,557,519)				24,356,699
OTHER ASSETS LESS LIABILITIES–0.95%				233,167
NET ASSETS–100.00%			$	24,589,866

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

AIM V.I. Diversified Income Fund

Investment Abbreviations:

Ctfs.	– Certificates
Deb.	– Debentures
Disc.	– Discounted
Gtd.	– Guaranteed
Jr.	– Junior
Pfd.	– Preferred
RB	– Revenue Bonds
REIT	– Real Estate Investment Trust
Sec.	– Secured
Sr.	– Senior
Sub.	– Subordinated
Unsec.	– Unsecured
Unsub.	– Unsubordinated

Notes to Schedule of Investments:

(a)	Industry and/or sector classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s.
(b)	Security purchased or received in a transaction exempt from registration under the Securities Act of 1933, as amended. The security may be resold pursuant to an exemption from registration under the 1933 Act, typically to qualified institutional buyers. The aggregate value of these securities at December 31, 2009 was $5,022,482, which represented 20.43% of the Fund’s Net Assets.
(c)	Step coupon bond issued at discount. The interest rate represents the coupon rate at which the bond will accrue at a specified future date.
(d)	Security traded on a discount basis. The interest rate shown represents the discount rate at the time of purchase by the Fund.
(e)	Interest or dividend rate is redetermined periodically. Rate shown is the rate in effect on December 31, 2009.
(f)	Perpetual bond with no specified maturity date.
(g)	Defaulted security. Currently, the issuer is partially or fully in default with respect to interest payments. The value of this security at December 31, 2009 represented less than 0.01% of the Fund’s Net Assets.
(h)	All or a portion of the value was pledged as collateral to cover margin requirements for open futures contracts. See Note 1K and Note 4.
(i)	Non-income producing security acquired as part of the Adelphia Communications bankruptcy reorganization.
(j)	The money market fund and the Fund are affiliated by having the same investment adviser.

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

AIM V.I. Diversified Income Fund

Statement of Assets and Liabilities

December 31, 2009

Assets:
Investments, at value (Cost $21,975,391)	$	22,774,571
Investments in affiliated money market funds, at value and cost		1,582,128
Total investments, at value (Cost $23,557,519)		24,356,699
Receivables for:
Fund shares sold		2,540
Dividends and interest		332,124
Investment for trustee deferred compensation and retirement plans		35,155
Other assets		369
Total assets		24,726,887
Liabilities:
Payables for:
Fund shares reacquired		25,694
Amount due custodian		6,106
Variation margin		7,445
Accrued fees to affiliates		14,581
Accrued other operating expenses		40,483
Trustee deferred compensation and retirement plans		42,712
Total liabilities		137,021
Net assets applicable to shares outstanding	$	24,589,866
Net assets consist of:
Shares of beneficial interest	$	39,447,510
Undistributed net investment income		1,356,293
Undistributed net realized gain (loss)		(16,970,317	)
Unrealized appreciation		756,380
	$	24,589,866
Net Assets:
Series I	$	24,299,345
Series II	$	290,521
Shares outstanding, $0.001 par value per share, unlimited number of shares authorized:
Series I		4,129,498
Series II		49,676
Series I:
Net asset value per share	$	5.88
Series II:
Net asset value per share	$	5.85

Statement of Operations

For the year ended December 31, 2009

Investment income:
Interest	$	1,523,745
Dividends		53,617
Dividends from affiliated money market funds		4,855
Total investment income		1,582,217
Expenses:
Advisory fees		142,633
Administrative services fees		90,870
Custodian fees		14,743
Distribution fees — Series II		845
Transfer agent fees		8,562
Trustees’ and officers’ fees and benefits		20,359
Professional services fees		51,589
Other		24,107
Total expenses		353,708
Less: Fees waived and expenses reimbursed		(175,934	)
Net expenses		177,774
Net investment income		1,404,443
Realized and unrealized gain (loss) from:
Net realized gain (loss) from:
Investment securities		(6,999,487	)
Futures contracts		(75,702	)
Swap agreements		22,514
		(7,052,675	)
Change in net unrealized appreciation (depreciation) of:
Investment securities		8,391,038
Futures contracts		(310,449	)
Swap agreements		26,769
		8,107,358
Net realized and unrealized gain		1,054,683
Net increase in net assets resulting from operations	$	2,459,126

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

AIM V.I. Diversified Income Fund

Statement of Changes in Net Assets

For the years ended December 31, 2009 and 2008

	2009			2008
Operations:
Net investment income	$	1,404,443		$	2,195,663
Net realized gain (loss)		(7,052,675	)		(2,233,230	)
Change in net unrealized appreciation (depreciation)		8,107,358			(5,040,130	)
Net increase (decrease) in net assets resulting from operations		2,459,126			(5,077,697	)
Distributions to shareholders from net investment income:
Series I		(2,398,080	)		(2,560,300	)
Series II		(27,960	)		(44,345	)
Total distributions from net investment income		(2,426,040	)		(2,604,645	)
Share transactions-net:
Series I		201,049			(6,708,387	)
Series II		(122,516	)		(73,155	)
Net increase (decrease) in net assets resulting from share transactions		78,533			(6,781,542	)
Net increase (decrease) in net assets		111,619			(14,463,884	)
Net assets:
Beginning of year		24,478,247			38,942,131
End of year (includes undistributed net investment income of $1,356,293 and $2,373,638, respectively)	$	24,589,866		$	24,478,247

Notes to Financial Statements

December 31, 2009

NOTE 1—Significant Accounting Policies

AIM V.I. Diversified Income Fund (the “Fund”) is a series portfolio of AIM Variable Insurance Funds (the “Trust”). The Trust is a Delaware statutory trust registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end series management investment company consisting of twenty-one separate portfolios, (each constituting a “Fund”). The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Matters affecting each Fund or class will be voted on exclusively by the shareholders of such Fund or class. Current Securities and Exchange Commission (“SEC”) guidance, however, requires participating insurance companies offering separate accounts to vote shares proportionally in accordance with the instructions of the contract owners whose investments are funded by shares of each Fund or class.

  The Fund’s investment objective is to achieve a high level of current income.

  The Fund currently offers two classes of shares, Series I and Series II, both of which are offered to insurance company separate accounts funding variable annuity contracts and variable life insurance policies (“variable products”).

  The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements.

A.	Security Valuations — Securities, including restricted securities, are valued according to the following policy.
	Debt obligations (including convertible bonds) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution-size trading in similar groups of securities, developments related to specific securities, dividend rate, yield, quality, type of issue, coupon rate, maturity, individual trading characteristics and other market data. Short-term obligations, including commercial paper, having 60 days or less to maturity are recorded at amortized cost which approximates value. Debt securities are subject to interest rate and credit risks. In addition, all debt securities involve some risk of default with respect to interest and/or principal payments.
	A security listed or traded on an exchange (except convertible bonds) is valued at its last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales or official closing price on a particular day, the security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based on prices furnished by independent pricing services or market makers. When such securities are valued by an independent pricing service they may be considered fair valued. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean between the last bid and ask prices from the exchange on which they are principally traded. Options not listed on an exchange are valued by an independent source at the mean between the last bid and ask prices. For purposes of determining net asset value per share, futures and option contracts generally are valued 15 minutes after the close of the customary trading session of the New York Stock Exchange (“NYSE”).

AIM V.I. Diversified Income Fund

	Investments in open-end and closed-end registered investment companies that do not trade on an exchange are valued at the end of day net asset value per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded.
	Swap agreements are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service are valued based on a model which may include end of day net present values, spreads, ratings, industry, and company performance.
	Foreign securities (including foreign exchange contracts) are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the NYSE. If market quotations are available and reliable for foreign exchange traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that are significant and make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economical upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
	Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities and Corporate Loans. The mean between the last bid and asked prices may be used to value debt obligations other than Corporate Loans.
	Securities for which market quotations are not readily available or are unreliable are valued at fair value as determined in good faith by or under the supervision of the Trust’s officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a security’s fair value.
	Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
B.	Securities Transactions and Investment Income — Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income is recorded on the accrual basis from settlement date. Paydown gains and losses on mortgage and asset-backed securities are recorded as adjustments to interest income. Dividend income is recorded on the ex-dividend date. Bond premiums and discounts are amortized and/or accreted for financial reporting purposes.
	The Fund may periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain/loss for investments no longer held and as unrealized gain/loss for investments still held.
	Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the realized and unrealized net gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the Fund’s net asset value and, accordingly, they reduce the Fund’s total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in the Statement of Operations and Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the adviser.
	The Fund allocates income and realized and unrealized capital gains and losses to a class based on the relative net assets of each class.
C.	Country Determination — For the purposes of making investment selection decisions and presentation in the Schedule of Investments, the investment adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuer’s securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted.
D.	Distributions — Distributions from income and net realized capital gain, if any, are generally paid to separate accounts of participating insurance companies annually and recorded on ex-dividend date.
E.	Federal Income Taxes — The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code necessary to qualify as a regulated investment company and to distribute substantially all of the Fund’s taxable earnings to shareholders. As such, the Fund will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements.
	The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.
F.	Expenses — Fees provided for under the Rule 12b-1 plan of a particular class of the Fund and which are directly attributable to that class are charged to the operations of such class. All other expenses are allocated among the classes based on relative net assets.

AIM V.I. Diversified Income Fund

G.	Accounting Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print, which is generally 45 days from the period-end date.
H.	Indemnifications — Under the Trust’s organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Fund’s servicing agreements, that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote.
I.	Lower-Rated Securities — The Fund may invest in lower-quality debt securities, i.e., “junk bonds”. Investments in lower-rated securities or unrated securities of comparable quality tend to be more sensitive to economic conditions than higher rated securities. Junk bonds involve a greater risk of default by the issuer because such securities are generally unsecured and are often subordinated to other creditors’ claims.
J.	Dollar Roll and Forward Commitment Transactions — The Fund may engage in dollar roll and forward commitment transactions with respect to mortgage-backed securities issued by GNMA, FNMA and FHLMC. These transactions are often conducted on a to be announced (“TBA”) basis. In a TBA mortgage-backed transaction, the seller does not specify the particular securities to be delivered. Rather, a Fund agrees to accept any security that meets specified terms, such as an agreed upon issuer, coupon rate and terms of the underlying mortgages. TBA mortgage-backed transactions generally settle once a month on a specific date.
	In a dollar roll transaction, the Fund sells a mortgage-backed security held in the Fund to a financial institution such as a bank or broker-dealer, and simultaneously agrees to purchase a substantially similar security (same type, coupon and maturity) from the institution at an agreed upon price and future date. The mortgage-backed securities to be purchased will bear the same coupon as those sold, but generally will be collateralized by different pools of mortgages with different prepayment histories. Based on the typical structure of dollar roll transactions by the Fund, the dollar roll transactions are accounted for as financing transactions in which the Fund receives compensation as either a “fee” or a “drop”. “Fee” income which is agreed upon amongst the parties at the commencement of the dollar roll and the “drop” which is the difference between the selling price and the repurchase price of the mortgage-backed securities are amortized to income. During the period between the sale and purchase settlement dates, the Fund will not be entitled to receive interest and principal payments on securities purchased and not yet settled. Proceeds of the sale may be invested in short-term instruments, and the income from these investments, together with any additional fee income received on the sale, could generate income for the Fund exceeding the yield on the security sold. Dollar roll transactions are considered borrowings under the 1940 Act.
	Forward commitment transactions involve commitments by the Fund to acquire or sell TBA mortgage-backed securities from/to a financial institution, such as a bank or broker-dealer at a specified future date and amount. The TBA mortgage-backed security is marked to market until settlement and the unrealized appreciation or depreciation is recorded in the statement of operations.
	At the time the Fund enters into the dollar roll or forward commitment transaction, mortgage-backed securities or other liquid assets held by the Fund having a dollar value equal to the purchase price or in an amount sufficient to honor the forward commitment will be segregated.
	Dollar roll transactions involve the risk that the market value of the securities retained by the Fund may decline below the price of the securities that the Fund has sold but is obligated to purchase under the agreement. In the event that the buyer of securities in a dollar roll transaction files for bankruptcy or becomes insolvent, the Fund’s use of the proceeds from the sale of the securities may be restricted pending a determination by the other party, or its trustee or receiver, whether to enforce the Fund’s obligation to purchase the securities. The return earned by the Fund with the proceeds of the dollar roll transaction may not exceed the return on the securities sold.
	Forward commitment transactions involve the risk that a counter-party to the transaction may fail to complete the transaction. If this occurs, the Fund may lose the opportunity to purchase or sell the security at the agreed upon price. Settlement dates of forward commitment transactions may be a month or more after entering into these transactions and as a result the market values of the securities may vary from the purchase or sale prices. Therefore, forward commitment transactions may increase the Fund’s overall interest rate exposure.
K.	Futures Contracts — The Fund may enter into futures contracts to manage exposure to interest rate, equity and market price movements and/or currency risks. A futures contract is an agreement between two parties to purchase or sell a specified underlying security, currency or commodity (or delivery of a cash settlement price, in the case of an index future) for a fixed price at a future date. The Fund currently invests only in exchange-traded futures and they are standardized as to maturity date and underlying financial instrument. Initial margin deposits required upon entering into futures contracts are satisfied by the segregation of specific securities or cash as collateral at the futures commission merchant (broker). During the period the futures contracts are open, changes in the value of the contracts are recognized as unrealized gains or losses by recalculating the value of the contracts on a daily basis. Subsequent or variation margin payments are received or made depending upon whether unrealized gains or losses are incurred. These amounts are reflected as receivables or payables on the Statement of Assets and Liabilities. When the contracts are closed or expire, the Fund recognizes a realized gain or loss equal to the difference between the proceeds from, or cost of, the closing transaction and the Fund’s basis in the contract. The net realized gain (loss) and the change in unrealized gain (loss) on futures contracts held during the period is included on the Statement of Operations. The primary risks associated with futures contracts are market risk and the absence of a liquid secondary market. If the Fund were unable to liquidate a futures contract and/or enter into an offsetting closing transaction, the Fund would continue to be subject to market risk with respect to the value of the contracts and continue to be required to maintain the margin deposits on the futures contracts. Futures contracts have minimal counterparty risk since the exchange’s clearinghouse, as counterparty to all exchange traded futures, guarantees the futures against default. Risks may exceed amounts recognized in the Statement of Assets and Liabilities.

AIM V.I. Diversified Income Fund

L.	Swap Agreements — The Fund may enter into various swap transactions, including interest rate, total return, index, currency exchange rate and credit default swap contracts (“CDS”) for investment purposes or to manage interest rate, currency or credit risk.
	Interest rate, total return, index, and currency exchange rate swap agreements are two-party contracts entered into primarily to exchange the returns (or differentials in rates of returns) earned or realized on particular predetermined investments or instruments. The gross returns to be exchanged or “swapped” between the parties are calculated with respect to a notional amount, i.e., the return on or increase in value of a particular dollar amount invested at a particular interest rate or return of an underlying asset, in a particular foreign currency, or in a “basket” of securities representing a particular index.
	A CDS is an agreement between two parties (“Counterparties”) to exchange the credit risk of an issuer. A buyer of a CDS is said to buy protection by paying a fixed payment over the life of the agreement and in some situations an upfront payment to the seller of the CDS. If a defined credit event occurs (such as payment default or bankruptcy), the Fund as a protection buyer would cease paying its fixed payment, the Fund would deliver eligible bonds issued by the reference entity to the seller, and the seller would pay the full notional value, or the “par value”, of the referenced obligation to the Fund. A seller of a CDS is said to sell protection and thus would receive a fixed payment over the life of the agreement and an upfront payment, if applicable. If a credit event occurs, the Fund as a protection seller would cease to receive the fixed payment stream, the Fund would pay the buyer “par value” or the full notional value of the referenced obligation, and the Fund would receive the eligible bonds issued by the reference entity. In turn, these bonds may be sold in order to realize a recovery value. Alternatively, the seller of the CDS and its counterparty may agree to net the notional amount and the market value of the bonds and make a cash payment equal to the difference to the buyer of protection. If no credit event occurs, the Fund receives the fixed payment over the life of the agreement. As the seller, the Fund would effectively add leverage to its portfolio because, in addition to its total net assets, the Fund would be subject to investment exposure on the notional amount of the CDS. In connection with these agreements, cash and securities may be identified as collateral in accordance with the terms of the respective swap agreements to provide assets of value and recourse in the event of default under the swap agreement or bankruptcy/insolvency of a party to the swap agreement.
	Implied credit spreads represent the current level at which protection could be bought or sold given the terms of the existing CDS contract and serve as an indicator of the current status of the payment/performance risk of the CDS. An implied spread that has widened or increased since entry into the initial contract may indicate a deteriorating credit profile and increased risk of default for the reference entity. A declining or narrowing spread may indicate an improving credit profile or decreased risk of default for the reference entity. Alternatively, credit spreads may increase or decrease reflecting the general tolerance for risk in the credit markets.
	Changes in the value of swap agreements are recognized as unrealized gains (losses) in the Statement of Operations by “marking to market” on a daily basis to reflect the value of the swap agreement at the end of each trading day. Payments received or paid at the beginning of the agreement are reflected as such on the Statement of Assets and Liabilities and may be referred to as upfront payments. The Fund accrues for the fixed payment stream and amortizes upfront payments, if any, on swap agreements on a daily basis with the net amount, recorded as a component of realized gain (loss) on the Statement of Operations. A liquidation payment received or made at the termination of a swap agreement is recorded as realized gain (loss) on the Statement of Operations. The Fund segregates liquid securities having a value at least equal to the amount of the potential obligation of a Fund under any swap transaction. The Fund’s maximum risk of loss from counterparty risk, either as the protection seller or as the protection buyer, is the value of the contract. The risk may be mitigated by having a master netting arrangement between the Fund and the counterparty and by the posting of collateral by the counterparty to cover the Fund’s exposure to the counterparty. Entering into these agreements involves, to varying degrees, lack of liquidity and elements of credit, market, and counterparty risk in excess of amounts recognized on the Statement of Assets and Liabilities. Such risks involve the possibility that a swap is difficult to sell or liquidate; the counterparty does not honor its obligations under the agreement and unfavorable interest rates and market fluctuations.
M.	Collateral — To the extent the Fund has pledged or segregated a security as collateral and that security is subsequently sold, it is the Fund’s practice to replace such collateral no later than the next business day.

NOTE 2—Advisory Fees and Other Fees Paid to Affiliates

The Trust has entered into a master investment advisory agreement with Invesco Advisers, Inc. (the “Adviser” or “Invesco”). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Adviser based on the annual rate of the Fund’s average daily net assets as follows:

Average Net Assets	Rate
First $250 million		0	.60%
Over $250 million		0	.55%

  Under the terms of a master sub-advisory agreement approved by shareholders of the Funds between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Trimark Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Funds, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide discretionary investment management services to each Fund based on the percentage of assets allocated to such Sub-Adviser(s).

  On December 31, 2009, Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc., Invesco Private Asset Management, Inc. and Invesco Global Asset Management (N.A.), Inc. merged into Invesco Institutional (N.A.), Inc. and the consolidated adviser firm was renamed Invesco Advisers, Inc.

  The Adviser has contractually agreed to waive advisory fees and/or reimburse expenses of all shares to the extent necessary to limit total annual fund operating expenses after fee waiver [and/or expense reimbursed] (excluding certain items discussed below) of Series I shares to 0.75% and Series II shares to 1.00% of average daily net assets, through at least April 30, 2011. In determining the Adviser’s obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the total annual fund operating expenses after fee waiver [and/or expense reimbursed] to exceed

AIM V.I. Diversified Income Fund

the numbers reflected above: (1) interest; (2) taxes; (3) dividend expense on short sales; (4) extraordinary items or non-routine items; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. The Board of Trustees or Invesco may terminate the fee waiver arrangement at any time.

  Further, the Adviser has contractually agreed, through at least June 30, 2010, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash in such affiliated money market funds.

  For the year ended December 31, 2009, the Adviser waived advisory fees of $142,633 and reimbursed Fund expenses of $33,301.

  At the request of the Trustees of the Trust, Invesco Ltd. agreed to reimburse expenses incurred by the Fund in connection with market timing matters in the AIM Funds, which may include legal, audit, shareholder reporting, communications and trustee expenses. For the year ended December 31, 2009, Invesco Ltd. did not reimburse any expenses.

  The Trust has entered into a master administrative services agreement with Invesco pursuant to which the Fund has agreed to pay Invesco a fee for costs incurred in providing accounting services and fund administrative services to the Fund and to reimburse Invesco for administrative services fees paid to insurance companies that have agreed to provide services to the participants of separate accounts. These administrative services provided by the insurance companies may include, among other things: the printing of prospectuses, financial reports and proxy statements and the delivery of the same to existing participants; the maintenance of master accounts; the facilitation of purchases and redemptions requested by the participants; and the servicing of participants’ accounts. Pursuant to such agreement, for the year ended December 31, 2009, Invesco was paid $50,000 for accounting and fund administrative services and reimbursed $40,870 for services provided by insurance companies.

  The Trust has entered into a transfer agency and service agreement with Invesco Aim Investment Services, Inc. (“IAIS”) pursuant to which the Fund has agreed to pay IAIS a fee for providing transfer agency and shareholder services to the Fund and reimburse IAIS for certain expenses incurred by IAIS in the course of providing such services. For the year ended December 31, 2009, expenses incurred under the agreement are shown in the Statement of Operations as transfer agent fees.

  The Trust has entered into a master distribution agreement with Invesco Aim Distributors, Inc. (“IADI”) to serve as the distributor for the Fund. The Trust has adopted a plan pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund’s Series II shares (the “Plan”). The Fund, pursuant to the Plan, pays IADI compensation at the annual rate of 0.25% of the Fund’s average daily net assets of Series II shares. Of the Plan payments, up to 0.25% of the average daily net assets of the Series II shares may be paid to insurance companies who furnish continuing personal shareholder services to customers who purchase and own Series II shares of the Fund. For the year ended December 31, 2009, expenses incurred under the Plan are detailed in the Statement of Operations as distribution fees.

  Certain officers and trustees of the Trust are officers and directors of Invesco, IAIS and/or IADI.

NOTE 3—Additional Valuation Information

Generally Accepted Accounting Principles (“GAAP”) defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3) generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment’s assigned level:

Level 1 —	Prices are determined using quoted prices in an active market for identical assets.
Level 2 —	Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk and others.
Level 3 —	Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information.

AIM V.I. Diversified Income Fund

  The following is a summary of the tiered valuation input levels, as of December 31, 2009. The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.

	Level 1			Level 2		Level 3		Total
Equity Securities	$	1,584,925		$		$	1,800	$	1,586,725
U.S. Treasury Securities		—			2,504,063		—		2,504,063
U.S. Government Sponsored Securities		—			678,432		—		678,432
Corporate Debt Securities		—			19,031,068		—		19,031,068
Asset Backed Securities		—			502,713		—		502,713
Municipal Obligations		—			53,698		—		53,698
	$	1,584,925		$	22,769,974	$	1,800		24,356,699
Other Investments*		(42,800	)		—		—		(42,800	)
Total Investments	$	1,542,125		$	22,769,974	$	1,800	$	24,313,899

*  Other Investments include futures, which are included at unrealized appreciation (depreciation).

NOTE 4—Derivative Investments

Effective with the beginning of the Fund’s fiscal year, the Fund has implemented new required disclosures about derivative instruments and hedging activities in accordance with GAAP. GAAP has intended to improve financial reporting about derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity’s financial position and financial performance. The enhanced disclosure has no impact on the results of operations reported in the financial statements.

Value of Derivative Instruments at Period-End

The Table below summarizes the value of the Fund’s derivative instruments, detailed by primary risk exposure, held as of December 31, 2009:

	Value
Risk Exposure/ Derivative Type	Assets		Liabilities
Interest rate risk
Futures contracts(a)	$	41,914	$	(84,714	)

^(a) Includes cumulative appreciation of futures contracts. Only current day’s variation margin receivable (payable) is reported within the Statement of Assets & Liabilities.

Effect of Derivative Instruments for the year ended December 31, 2009

The table below summarizes the gains (losses) on derivative instruments, detailed by primary risk exposure, recognized in earnings during the period:

	Location of Gain (Loss) on
	Statement of Operations
				Swap
	Futures*			Agreements*
Realized Gain (Loss)
Credit risk	$	—		$	22,514
Interest rate risk		(75,702	)		—
Change in Unrealized Appreciation (Depreciation)
Credit risk		—			26,769
Interest rate risk		(310,449	)		—
Total	$	(386,151	)	$	49,283

*  The average value of futures and swap agreements outstanding during the period was $5,808,406, and $575,000, respectively.

AIM V.I. Diversified Income Fund

Open Futures Contracts
								Unrealized
	Number of		Month/					Appreciation
Contract	Contracts		Commitment		Value			(Depreciation)
U.S. Treasury 2 Year Notes		12		March-2010/Long	$	2,595,188		$	(11,651	)
U.S. Treasury 5 Year Notes		19		March-2010/Long		2,173,273			(31,858	)
U.S. Treasury 30 Year Bonds		8		March-2010/Long		923,000			(41,205	)
Subtotal					$	5,691,461		$	(84,714	)
U.S. Treasury 10 Year Notes		11		March-2010/Short		(1,269,984	)		41,914
Total					$	4,421,477		$	(42,800	)

NOTE 5—Trustees’ and Officers’ Fees and Benefits

“Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and “Trustees’ and Officers’ Fees and Benefits” also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various AIM Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees are eligible to participate in a retirement plan that provides for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former Trustees who also participate in a retirement plan and receive benefits under such plan. “Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund.

  During the year ended December 31, 2009, the Fund paid legal fees of $2,820 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A member of that firm is a Trustee of the Trust.

NOTE 6—Cash Balances

The Fund may borrow for leveraging in an amount up to 5% of the Fund’s total assets (excluding the amount borrowed) at the time the borrowing is made. In doing so, the Fund is permitted to temporarily carry a negative or overdrawn balance in its account with The State Street Bank and Trust Company, the custodian bank. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (i) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (ii) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate. A Fund may not purchase additional securities when any borrowings from banks exceeds 5% of the Fund’s total assets.

NOTE 7—Distributions to Shareholders and Tax Components of Net Assets

Tax Character of Distributions to Shareholders Paid During the Years Ended December 31, 2009 and 2008:

	2009		2008
Ordinary income	$	2,426,040	$	2,604,645

Tax Components of Net Assets at Period-End:

	2009
Undistributed ordinary income	$	1,401,698
Net unrealized appreciation — investments		799,180
Temporary book/tax differences		(45,405	)
Post-October deferrals		(13,750	)
Capital loss carryforward		(16,999,367	)
Shares of beneficial interest		39,447,510
Total net assets	$	24,589,866

  The temporary book/tax differences are a result of timing differences between book and tax recognition of income and/or expenses. The Fund’s temporary book/tax differences are the result of the trustee deferral of compensation and retirement plan benefits.

  Capital loss carryforward is calculated and reported as of a specific date. Results of transactions and other activity after that date may affect the amount of capital loss carryforward actually available for the Fund to utilize. The ability to utilize capital loss carryforward in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.

AIM V.I. Diversified Income Fund

  The Fund has a capital loss carryforward as of December 31, 2009 which expires as follows:

	Capital Loss
Expiration	Carryforward*
December 31, 2010	$	6,879,052
December 31, 2014		341,884
December 31, 2015		221,396
December 31, 2016		2,197,944
December 31, 2017		7,359,091
Total capital loss carryforward	$	16,999,367

*  Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code.

NOTE 8—Investment Securities

The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the year ended December 31, 2009 was $41,196,846 and $44,640,939, respectively. Cost of investments on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed Federal income tax reporting period-end.

Unrealized Appreciation (Depreciation) of Investment Securities on a Tax Basis
Aggregate unrealized appreciation of investment securities	$	1,176,130
Aggregate unrealized (depreciation) of investment securities		(376,950	)
Net unrealized appreciation of investment securities	$	799,180
Investments have the same cost for tax and financial statement purposes.

NOTE 9—Reclassification of Permanent Differences

Primarily as a result of differing book/tax treatment of expired capital loss carryforward, on December 31, 2009, undistributed net investment income was increased by $4,252, undistributed net realized gain (loss) was increased by $6,100,816 and shares of beneficial interest decreased by $6,105,068. This reclassification had no effect on the net assets of the Fund.

NOTE 10—Share Information

	Summary of Share Activity
	Years ended December 31,
	2009(a)						2008
	Shares			Amount			Shares			Amount
Sold:
Series I		503,808		$	3,031,480			263,402		$	1,949,370
Series II		961			5,848			5,542			36,732
Issued as reinvestment of dividends:
Series I		406,455			2,398,080			450,757			2,560,300
Series II		4,771			27,960			7,863			44,345
Reacquired:
Series I		(882,462	)		(5,228,511	)		(1,527,553	)		(11,218,057	)
Series II		(26,192	)		(156,324	)		(21,536	)		(154,232	)
Net increase (decrease) in share activity		7,341		$	78,533			(821,525	)	$	(6,781,542	)

^(a) There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 78% of the outstanding shares of the Fund. The Fund and the Fund’s principal underwriter or adviser, are parties to participation agreements with these entities whereby these entities sell units of interest in separate accounts funding variable products that are invested in the Fund. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as, securities brokerage, third party record keeping and account servicing and administrative services. The Trust has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially.

AIM V.I. Diversified Income Fund

NOTE 11—Financial Highlights

The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.

																					Ratio of			Ratio of
																					expenses			expenses
					Net gains																to average			to average net			Ratio of net
	Net asset				(losses) on						Dividends										net assets			assets without			investment
	value,		Net		securities (both			Total from			from net			Net asset					Net assets,		with fee waivers			fee waivers			income
	beginning		investment		realized and			investment			investment			value, end		Total			end of period		and/or expenses			and/or expenses			to average			Portfolio
	of period		income(a)		unrealized)			operations			income			of period		Return(b)			(000s omitted)		absorbed			absorbed			net assets			turnover(c)
Series I
Year ended 12/31/09	$	5.87	$	0.35	$	0.29		$	0.64		$	(0.63	)	$	5.88		10.89	%	$	24,299		0.74	%(d)		1.48	%(d)		5.91	%(d)		200	%
Year ended 12/31/08		7.80		0.50		(1.74	)		(1.24	)		(0.69	)		5.87		(15.59	)		24,070		0.75			1.31			6.83			35
Year ended 12/31/07		8.28		0.51		(0.37	)		0.14			(0.62	)		7.80		1.72			38,336		0.75			1.17			6.04			67
Year ended 12/31/06		8.43		0.46		(0.08	)		0.38			(0.53	)		8.28		4.48			46,743		0.75			1.10			5.47			78
Year ended 12/31/05		8.74		0.40		(0.15	)		0.25			(0.56	)		8.43		2.90			55,065		0.89			1.08			4.54			92
Series II
Year ended 12/31/09		5.83		0.34		0.29			0.63			(0.61	)		5.85		10.70			291		0.99	(d)		1.73	(d)		5.66	(d)		200
Year ended 12/31/08		7.74		0.48		(1.72	)		(1.24	)		(0.67	)		5.83		(15.78	)		409		1.00			1.56			6.58			35
Year ended 12/31/07		8.21		0.48		(0.36	)		0.12			(0.59	)		7.74		1.51			606		1.00			1.42			5.79			67
Year ended 12/31/06		8.36		0.44		(0.09	)		0.35			(0.50	)		8.21		4.17			713		1.00			1.35			5.22			78
Year ended 12/31/05		8.67		0.38		(0.15	)		0.23			(0.54	)		8.36		2.67			902		1.14			1.33			4.29			92

(a)	Calculated using average shares outstanding.
(b)	Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Total returns do not reflect charges assessed in connection with a variable product, which if included would reduce total returns.
(c)	Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable.
(d)	Ratios are based on average daily net assets (000’s omitted) of $23,434 and $338 for Series I and Series II shares, respectively.

AIM V.I. Diversified Income Fund

Report of Independent Registered Public Accounting Firm

To the Board of Trustees of AIM Variable Insurance Funds

and Shareholders of AIM V.I. Diversified Income Fund:

In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of AIM V.I. Diversified Income Fund (one of the funds constituting AIM Variable Insurance Funds, hereafter referred to as the “Fund”) at December 31, 2009, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at December 31, 2009 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP

February 10, 2010

Houston, Texas

AIM V.I. Diversified Income Fund

Calculating your ongoing Fund expenses

Example

As a shareholder of the Fund, you incur ongoing costs, including management fees; distribution and/or service fees (12b-1); and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period July 1, 2009 through December 31, 2009.

  The actual and hypothetical expenses in the examples below do not represent the effect of any fees or other expenses assessed in connection with a variable product; if they did, the expenses shown would be higher while the ending account values shown would be lower.

Actual expenses

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

Hypothetical example for comparison purposes

The table below also provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return.

  The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

  Please note that the expenses shown in the table are meant to highlight your ongoing costs. Therefore, the hypothetical information is useful in comparing ongoing costs, and will not help you determine the relative total costs of owning different funds.

							HYPOTHETICAL
							(5% annual return before
			ACTUAL				expenses)
	Beginning		Ending		Expenses		Ending		Expenses		Annualized
	Account Value		Account Value		Paid During		Account Value		Paid During		Expense
Class	(07/01/09)		(12/31/09)1		Period2		(12/31/09)		Period2		Ratio
Series I	$	1,000.00	$	1,092.10	$	3.90	$	1,021.48	$	3.77		0.74	%
Series II		1,000.00		1,092.00		5.22		1,020.21		5.04		0.99

1	The actual ending account value is based on the actual total return of the Fund for the period July 1, 2009 through December 31, 2009, after actual expenses and will differ from the hypothetical ending account value which is based on the Fund’s expense ratio and a hypothetical annual return of 5% before expenses.
2	Expenses are equal to the Fund’s annualized expense ratio as indicated above multiplied by the average account value over the period, multiplied by 184/365 to reflect the most recent fiscal half year.

AIM V.I. Diversified Income Fund

Tax Information

Form 1099-DIV, Form 1042-S and other year-end tax information provide shareholders with actual calendar year amounts that should be included in their tax returns. Shareholders should consult their tax advisors.

  The following distribution information is being provided as required by the Internal Revenue Code or to meet a specific state’s requirement.

  The Fund designates the following amounts or, if subsequently determined to be different, the maximum amount allowable for its fiscal year ended December 31, 2009:

Federal and State Income Tax
Corporate Dividends Received Deduction*	2.98%
U.S. Treasury Obligations*	2.64%

*  The above percentages are based on ordinary income dividends paid to shareholders during the Fund’s fiscal year.

AIM V.I. Diversified Income Fund

Trustees and Officers

The address of each trustee and officer of AIM Variable Insurance Funds (the “Trust”), is 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173. Each trustee oversees 105 portfolios in the AIM Funds complex. The trustees serve for the life of the Trust, subject to their earlier death, incapacitation, resignation, retirement or removal as more specifically provided in the Trust’s organizational documents. Each officer serves for a one year term or until their successors are elected and qualified. Column two below includes length of time served with predecessor entities, if any.

	Trustee and/
Name, Year of Birth and	or Officer	Principal Occupation(s)	Other Directorship(s)
Position(s) Held with the Trust	Since	During Past 5 Years	Held by Trustee
Interested Persons
Martin L. Flanagan1 — 1960 Trustee	2007	Executive Director, Chief Executive Officer and President, Invesco Ltd. (ultimate parent of Invesco Aim and a global investment management firm); Adviser to the Board, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Trustee, The AIM Family of Funds®; Board of Governors, Investment Company Institute; and Member of Executive Board, SMU Cox School of Business	None
		Formerly: Chairman, Invesco Aim Advisors, Inc. (registered investment adviser); Director, Chairman, Chief Executive Officer and President, IVZ Inc. (holding company), INVESCO Group Services, Inc. (service provider) and Invesco North American Holdings, Inc. (holding company); Director, Chief Executive Officer and President, Invesco Holding Company Limited (parent of Invesco Aim and a global investment management firm); Director, Invesco Ltd.; Chairman and Vice Chairman, Investment Company Institute
Philip A. Taylor2 — 1954 Trustee, President and Principal Executive Officer	2006	Head of North American Retail and Senior Managing Director, Invesco Ltd.; Director, Co-Chairman, Co-President and Co- Chief Executive Officer, Invesco Advisers, inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Director, Chief Executive Officer and President, Invesco Aim Advisors, Inc. and 1371 Preferred Inc. (holding company); Director, Chairman, Chief Executive Officer and President, Invesco Aim Management Group, Inc. (financial services holding company); Director, Co-Chairman, Co-President and Co-Chief Executive Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Director and President, INVESCO Funds Group, Inc. (registered investment adviser and registered transfer agent) and AIM GP Canada Inc. (general partner for limited partnerships); Director, Invesco Aim Distributors, Inc. (registered broker dealer); Director and Chairman, Invesco Aim Investment Services, Inc. (registered transfer agent) and INVESCO Distributors, Inc. (registered broker dealer); Director, President and Chairman, INVESCO Inc. (holding company) and Invesco Canada Holdings Inc. (holding company); Chief Executive Officer, AIM Trimark Corporate Class Inc. (corporate mutual fund company) and AIM Trimark Canada Fund Inc. (corporate mutual fund company); Director and Chief Executive Officer, Invesco Trimark Ltd./Invesco Trimark Ltèe (registered investment adviser and registered transfer agent) and Invesco Trimark Dealer Inc. (registered broker dealer); Trustee, President and Principal Executive Officer, The AIM Family of Funds® (other than AIM Treasurer’s Series Trust and Short-Term Investments Trust); Trustee and Executive Vice President, The AIM Family of Funds® (AIM Treasurer’s Series Trust and Short-Term Investments Trust only); and Manager, Invesco PowerShares Capital Management LLC Formerly: Manager, Invesco PowerShares Capital Management LLC; Director, Chief Executive Officer and President, Invesco Aim Advisors, Inc.; Director, Chairman, Chief Executive Officer and President, Invesco Aim Capital Management, Inc.; President, Invesco Trimark Dealer Inc. and Invesco Trimark Ltd./Invesco Trimark Ltèe; Director and President, AIM Trimark Corporate Class Inc. and AIM Trimark Canada Fund Inc.; Senior Managing Director, Invesco Holding Company Limited; Trustee and Executive Vice President, Tax-Free Investments Trust; Director and Chairman, Fund Management Company (former registered broker dealer); President and Principal Executive Officer, The AIM Family of Funds® (AIM Treasurer’s Series Trust, Short-Term Investments Trust and Tax-Free Investments Trust only); President, AIM Trimark Global Fund Inc. and AIM Trimark Canada Fund Inc.	None
Independent Trustees
Bruce L. Crockett — 1944 Trustee and Chair	1993	Chairman, Crockett Technology Associates (technology consulting company)	ACE Limited (insurance company); Captaris, Inc. (unified messaging provider); and Investment Company Institute
Bob R. Baker — 1936 Trustee	2004	Retired	None
Frank S. Bayley — 1939 Trustee	2001	Retired Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios)	None
James T. Bunch — 1942 Trustee	2004	Founder, Green, Manning & Bunch Ltd., (investment banking firm)	Board of Governors, Western Golf Association/Evans Scholars Foundation and Executive Committee, United States Golf Association
Albert R. Dowden — 1941 Trustee	2000	Director of a number of public and private business corporations, including the Boss Group, Ltd. (private investment and management); Reich & Tang Funds (registered investment company); and Homeowners of America Holding Corporation/Homeowners of America Insurance Company (property casualty company)	Board of Nature’s Sunshine Products, Inc.
		Formerly: Director, Continental Energy Services, LLC (oil and gas pipeline service); Director, CompuDyne Corporation (provider of product and services to the public security market) and Director, Annuity and Life Re (Holdings), Ltd. (reinsurance company); Director, President and Chief Executive Officer, Volvo Group North America, Inc.; Senior Vice President, AB Volvo; Director of various public and private corporations
Jack M. Fields — 1952 Trustee	1997	Chief Executive Officer, Twenty First Century Group, Inc. (government affairs company); and Owner and Chief Executive Officer, Dos Angelos Ranch, L.P. (cattle, hunting, corporate entertainment), Discovery Global Education Fund (non-profit) and Cross Timbers Quail Research Ranch (non-profit)	Administaff
		Formerly: Chief Executive Officer, Texana Timber LP (sustainable forestry company)
Carl Frischling — 1937 Trustee	1993	Partner, law firm of Kramer Levin Naftalis and Frankel LLP	Director, Reich & Tang Funds (16 portfolios)
Prema Mathai-Davis — 1950 Trustee	1998	Retired	None
Lewis F. Pennock — 1942 Trustee	1993	Partner, law firm of Pennock & Cooper	None
Larry Soll — 1942 Trustee	2004	Retired	None
Raymond Stickel, Jr. — 1944 Trustee	2005	Retired Formerly: Director, Mainstay VP Series Funds, Inc. (25 portfolios)	None

1	Mr. Flanagan is considered an interested person of the Trust because he is an officer of the adviser to the Trust, and an officer and a director of Invesco Ltd., ultimate parent of the adviser to the Trust.
2	Mr. Taylor is considered an interested person of the Trust because he is an officer and a director of the adviser to, and a director of the principal underwriter of, the Trust.

T-1

Trustees and Officers — (continued)

	Trustee and/
Name, Year of Birth and	or Officer	Principal Occupation(s)	Other Directorship(s)
Position(s) Held with the Trust	Since	During Past 5 Years	Held by Trustee
Other Officers
Russell C. Burk — 1958 Senior Vice President and Senior Officer	2005	Senior Vice President and Senior Officer of The AIM Family of Funds®	N/A
John M. Zerr — 1962 Senior Vice President, Chief Legal Officer and Secretary	2006	Director, Senior Vice President, Secretary and General Counsel, Invesco Aim Management Group, Inc., Senior Vice President, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Director, Senior Vice President and Secretary, Invesco Aim Distributors, Inc.; Director, Vice President and Secretary, Invesco Aim Investment Services, Inc. and INVESCO Distributors, Inc.; Director and Vice President, INVESCO Funds Group, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The AIM Family of Funds®; and Manager, Invesco PowerShares Capital Management LLC	N/A
		Formerly: Director, Senior Vice President, General Counsel and Secretary, Invesco Aim Advisors, Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco Aim Capital Management, Inc.; Chief Operating Officer and General Counsel, Liberty Ridge Capital, Inc. (an investment adviser); Vice President and Secretary, PBHG Funds (an investment company) and PBHG Insurance Series Fund (an investment company); Chief Operating Officer, General Counsel and Secretary, Old Mutual Investment Partners (a broker-dealer); General Counsel and Secretary, Old Mutual Fund Services (an administrator) and Old Mutual Shareholder Services (a shareholder servicing center); Executive Vice President, General Counsel and Secretary, Old Mutual Capital, Inc. (an investment adviser); and Vice President and Secretary, Old Mutual Advisors Funds (an investment company)
Lisa O. Brinkley — 1959 Vice President	2004	Global Compliance Director, Invesco Ltd.; Chief Compliance Officer, Invesco Aim Distributors, Inc. and Invesco Aim Investment Services, Inc.; and Vice President, The AIM Family of Funds®	N/A
		Formerly: Senior Vice President, Invesco Aim Management Group, Inc.; Senior Vice President and Chief Compliance Officer, Invesco Aim Advisors, Inc. and The AIM Family of Funds®; Vice President and Chief Compliance Officer, Invesco Aim Capital Management, Inc. and Invesco Aim Distributors, Inc.; Vice President, Invesco Aim Investment Services, Inc. and Fund Management Company
Kevin M. Carome — 1956 Vice President	2003	General Counsel, Secretary and Senior Managing Director, Invesco Ltd.; Director, Invesco Holding Company Limited and INVESCO Funds Group, Inc.; Director and Executive Vice President, IVZ, Inc., Invesco Group Services, Inc., Invesco North American Holdings, Inc. and Invesco Investments (Bermuda) Ltd.; Director and Secretary, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); and Vice President, The AIM Family of Funds®	N/A
		Formerly: Senior Managing Director and Secretary, Invesco North American Holdings, Inc.; Vice President and Secretary, IVZ, Inc. and Invesco Group Services, Inc.; Senior Managing Director and Secretary, Invesco Holding Company Limited; Director, Senior Vice President, Secretary and General Counsel, Invesco Aim Management Group, Inc. and Invesco Aim Advisors, Inc.; Senior Vice President, Invesco Aim Distributors, Inc.; Director, General Counsel and Vice President, Fund Management Company; Vice President, Invesco Aim Capital Management, Inc. and Invesco Aim Investment Services, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The AIM Family of Funds®; Director and Vice President, INVESCO Distributors, Inc.; and Chief Executive Officer and President, INVESCO Funds Group, Inc.
Sheri Morris — 1964 Vice President, Treasurer and Principal Financial Officer	1999	Vice President, Treasurer and Principal Financial Officer, The AIM Family of Funds®; and Vice President, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.) Formerly: Vice President, Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.; Assistant Vice President and Assistant Treasurer, The AIM Family of Funds® and Assistant Vice President, Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A
Karen Dunn Kelley — 1960 Vice President	1993	Head of Invesco’s World Wide Fixed Income and Cash Management Group; Senior Vice President, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Executive Vice President, Invesco Aim Distributors, Inc.; Senior Vice President, Invesco Aim Management Group, Inc.; and Director, Invesco Mortgage Capital Inc.; Vice President, The AIM Family of Funds® (other than AIM Treasurer’s Series Trust and Short-Term Investments Trust); and President and Principal Executive Officer, The AIM Family of Funds® (AIM Treasurer’s Series Trust and Short-Term Investments Trust only)	N/A
		Formerly: Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Director of Cash Management and Senior Vice President, Invesco Aim Advisors, Inc. and Invesco Aim Capital Management, Inc.; President and Principal Executive Officer, Tax-Free Investments Trust; Director and President, Fund Management Company; Chief Cash Management Officer, Director of Cash Management, Senior Vice President, and Managing Director, Invesco Aim Capital Management, Inc.; Director of Cash Management, Senior Vice President, and Vice President, Invesco Aim Advisors, Inc. and The AIM Family of Funds® (AIM Treasurer’s Series Trust, Short-Term Investments Trust and Tax-Free Investments Trust only)
Lance A. Rejsek — 1967 Anti-Money Laundering Compliance Officer	2005	Anti-Money Laundering Compliance Officer, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Invesco Aim Distributors, Inc., Invesco Aim Investment Services, Inc., and The AIM Family of Funds®	N/A
		Formerly: Anti-Money Laundering Compliance Officer, Fund Management Company, Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.
Todd L. Spillane — 1958 Chief Compliance Officer	2006	Senior Vice President, Invesco Aim Management Group, Inc.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Chief Compliance Officer, The AIM Family of Funds®, INVESCO Private Capital Investments, Inc. (holding company), Invesco Private Capital, Inc. (registered investment adviser) and Invesco Senior Secured Management, Inc. (registered investment adviser); Vice President, Invesco Aim Distributors, Inc. and Invesco Aim Investment Services, Inc.	N/A
		Formerly: Senior Vice President and Chief Compliance Officer, Invesco Aim Advisors, Inc. and Invesco Aim Capital Management, Inc.; Chief Compliance Officer, Invesco Global Asset Management (N.A.), Inc.; Vice President, Invesco Aim Capital Management, Inc. and Fund Management Company

The Statement of Additional Information of the Trust includes additional information about the Fund’s Trustees and is available upon request, without charge, by calling 1.800.959.4246. Please refer to the Fund’s prospectus for information on the Fund’s sub-advisers.

Office of the Fund	Investment Adviser	Distributor	Auditors
11 Greenway Plaza, Suite 100	Invesco Advisers, Inc.	Invesco Aim Distributors, Inc.	PricewaterhouseCoopers LLP
Houston, TX 77046-1173	1555 Peachtree Street, N.E.	11 Greenway Plaza, Suite 100	1201 Louisiana Street, Suite 2900
	Atlanta, GA 30309	Houston, TX 77046-1173	Houston, TX 77002-5678
Counsel to the Fund	Counsel to the	Transfer Agent	Custodian
Stradley Ronon Stevens & Young, LLP	Independent Trustees	Invesco Aim Investment Services, Inc.	State Street Bank and Trust Company
2600 One Commerce Square	Kramer, Levin, Naftalis & Frankel LLP	P.O. Box 4739	225 Franklin
Philadelphia, PA 19103	1177 Avenue of the Americas	Houston, TX 77210-4739	Boston, MA 02110-2801
	New York, NY 10036-2714

T-2

AIM V.I. Dynamics Fund
Annual Report to Shareholders n December 31, 2009

The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter-ends. For the second and fourth quarters, the lists appear in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The Fund’s Form N-Q filings are available on the SEC website, sec.gov. Copies of the Fund’s Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers for the Fund are 811-07452 and 033-57340. The Fund’s most recent portfolio holdings, as filed on Form N-Q, have also been made available to insurance companies issuing variable annuity contracts and variable life insurance policies (“variable products”) that invest in the Fund.

A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, from our Client Services department at 800 410 4246 or on the Invesco Aim website, invescoaim.com. On the home page, scroll down and click on Proxy Policy. The information is also available on the SEC website, sec.gov.

Information regarding how the Fund voted proxies related to its portfolio securities during the 12 months ended June 30, 2009, is available at our website, invescoaim.com. Click the About Us tab at the top of the home page; click Legal Information; and then click Proxy Voting Search. The information is also available on the SEC website, sec.gov.

Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Aim Distributors, Inc. is the U.S. distributor for Invesco Ltd.’s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd.

This report must be accompanied or preceded by a currently effective Fund prospectus and variable product prospectus, which contain more complete information, including sales charges and expenses. Investors should read each carefully before investing.

Invesco Aim Distributors, Inc.

NOT FDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEE

Management’s Discussion of Fund Performance

Performance summary

For the fiscal year ended December 31, 2009, AIM V.I. Dynamics Fund, excluding variable product issuer charges, had positive double-digit returns but underper-formed the Fund’s style-specific benchmark, the Russell Midcap Growth Index. Underperformance was driven primarily by stock selection in several sectors.

     The Fund outperformed the broad market as represented by the S&P 500 Index as mid-cap stocks generally outperformed large-cap stocks.

     Your Fund’s long-term performance appears later in this report.

Fund vs. Indexes

Total returns, 12/31/08 to 12/31/09, excluding variable product issuer charges.

If variable product issuer charges were included, returns would be lower.

Series I Shares	42.44	%
Series II Shares	42.31
S&P 500 Index6 (Broad Market Index)	26.47
Russell Midcap Growth Index6 (Style-Specific Index)	46.29
Lipper VUF Mid-Cap Growth Funds Index6 (Peer Group Index)	45.97

⁶ Lipper Inc.

How we invest

We believe a growth investment strategy is an essential component of a diversified portfolio.

     Our investment process combines fundamental and quantitative analysis to uncover companies exhibiting long-term, sustainable revenue, earnings and cash flow growth that is not yet reflected by the stock’s market price.

     Our quantitative model ranks companies based on a set of fundamental, valuation and timeliness factors. This quantitative model is designed to identify stocks with the highest probability of meeting our team’s investment criteria. Stocks that are ranked highest by our quantitative model are the focus of our fundamental research efforts.

     Our fundamental analysis focuses on identifying companies and industries with strong drivers of growth. To accomplish this goal, we develop a fully integrated financial model to gain a more complete understanding of the financial health of each investment candidate. Additionally, our research involves due diligence of the company, which includes a detailed analysis of the strategic plans of the company’s management team. We also analyze key competitors, customers and suppliers to assess the overall attractiveness and growth potential of the industry.

     Risk management plays an important role in portfolio construction as our target portfolio attempts to limit volatility and downside risk. We seek to accomplish this goal by investing in sectors, industries and companies with attractive fundamental prospects. We limit the Fund’s sector exposure and also seek to minimize stock-specific risk by building a diversified portfolio.

     We consider selling a stock for any of the following reasons:

n	There is a change in fundamentals, market capitalization or deterioration in the timeliness profile.
n	The price target set at purchase has been reached.
n	The investment thesis is no longer valid.
n	Insider selling indicates potential issues.

Market conditions and your Fund

The fiscal year was truly a tale of two markets. During the second half of 2008 and the first two months of 2009, equity markets experienced steep declines as severe problems in the credit markets, a rapidly deteriorating housing market, rising energy and food prices and a deteriorating outlook for corporate earnings led to a global economic recession. However, the U.S. economy began to show signs that the economic contraction was moderating, and equity markets rapidly reversed direction beginning in March 2009 and rallied strongly for most of the remaining months of the fiscal year.

     In this environment, indexes measuring the performance of large-, mid- and small-cap stocks all had positive returns, with mid-cap stocks outperforming large- and small-cap stocks.¹ In terms of investment style, growth stocks outperformed value stocks.¹ The sectors with the highest returns in the broad market as represented by the S&P 500 Index included more economically sensitive sectors such as information technology (IT), materials and consumer discretionary.¹

     The Fund had double-digit absolute returns, but underperformed the Russell Midcap Growth Index during the fiscal year. The Fund underperformed by the widest margin in the utilities, industrials, health care and materials sectors. The Fund’s cash position also detracted from relative performance as equity markets rallied. Some of this underperformance was offset by outperformance in other sectors, including financials, telecommunication services, consumer discretionary and consumer staples.

     The Fund underperformed most significantly in the utilities sector, driven by stock selection. Despite reasonable stock valuation, NRG Energy spent much of the year defending itself against a hostile takeover and had double-digit losses in its share price, which detracted from Fund performance during the reporting period.

Portfolio Composition

By sector

Information Technology	23.0	%
Industrials	18.2
Consumer Discretionary	17.1
Health Care	11.6
Energy	10.0
Financials	8.2
Materials	6.1
Consumer Staples	2.4
Utilities	1.3
Telecommunication Services	1.0
Money Market Funds Plus Other Assets Less Liabilities	1.1

Top 10 Equity Holdings*

1. Continental Resources, Inc.	1.7	%
2. Avago Technologies Ltd.	1.6
3. American Eagles Outfitters, Inc.	1.6
4. Estee Lauder Cos. Inc. (The)-Class A	1.5
5. Jarden Corp.	1.5
6. Autodesk, Inc.	1.5
7. Jones Lang LaSalle Inc.	1.5
8. Capella Education Co.	1.5
9. Macy’s, Inc.	1.5
10. Altera Corp.	1.5

Top Five Industries*

1. Semiconductors		7.5	%
2. Oil & Gas Exploration & Production		5.8
3. Trucking		3.8
4. Application Software		3.7
5. Apparel, Accessories & Luxury Goods		3.5
Total Net Assets	$50.5 million
Total Number of Holdings*		96

The Fund’s holdings are subject to change, and there is no assurance that the Fund will continue to hold any particular security.

* Excluding money market fund holdings.

AIM V.I. Dynamics Fund

     The Fund underperformed in the industrials sector due to stock selection. Much of the Fund’s underperformance was driven by stock selection in the transportation industry group, which normally outperforms as the economy exits recession. While several of the Fund’s holdings in this area had strong performance, two holdings detracted from absolute and relative performance during the period: truckload freight carrier Landstar System and cargo shipping services provider Diana Shipping. While we continued to own Landstar Systems at the end of the period, we sold our small position in Diana Shipping to concentrate the Fund’s holdings.

     The Fund also underperformed in the health care sector. Within this sector, key detractors from performance included contract research organization holding Pharmaceutical Product Development, as well as Genzyme, a company that develops and markets products designed to treat genetic disorders and other debilitating diseases. While we continued to own Pharmaceutical Product Development at the close of the reporting period, we sold the Fund’s position in Genzyme due to deteriorating fundamentals.

     In the materials sector, underperformance was driven primarily by stock selection. Within this sector, one of the leading detractors from performance was glass container manufacturer Owens-Illinois.

     Some of this underperformance was offset by outperformance in other sectors. The Fund outperformed the Russell Midcap Growth Index by the widest margin in the financials sector. Within this sector, one area of strength for the Fund was its capital markets holdings. Many of these holdings had strong performance as economic and stock market conditions improved dramatically after the March rebound. Fund holding Morgan Stanley was a key contributor to performance. We sold this holding during the summer because the strong recovery in the shares caused the market capitalization to exceed our mid-cap mandate.

     The Fund also outperformed in the telecommunication services, consumer staples, consumer discretionary and IT sectors. Outperformance in these sectors was driven largely by stock selection. An underweight position in the more defensive consumer staples sector was also a driver of outperformance. Key contributors to performance included hard-disk maker Western Digital, IT services provider Cognizant Technology Solutions, consumer products maker Jarden and undergarment maker Hanesbrands.

     During the fiscal year, we increased the Fund’s exposure to more economically sensitive sectors including energy, IT, consumer discretionary and industrials. The largest reduction was in more defensive sectors such as utilities and consumer staples.

     As we’ve discussed, the stock market experienced significant volatility during the fiscal year. We would like to caution investors against making investment decisions based on short-term performance. As always, we recommend that you consult a financial adviser to discuss your individual financial program. We thank you for your commitment to AIM V.I. Dynamics Fund.

1 Lipper Inc.

The views and opinions expressed in management’s discussion of Fund performance are those of Invesco Advisers, Inc. These views and opinions are subject to change at any time based on factors such as market and economic conditions. These views and opinions may not be relied upon as investment advice or recommendations, or as 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 Invesco Advisers, Inc. 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.

See important Fund and index disclosures later in this report.

Paul Rasplicka

Chartered Financial Analyst, senior portfolio manager, is lead manager of AIM V.I. Dynamics Fund. Mr. Rasplicka has been associated with the adviser and/or its affiliates since 1994. He began his investment career in 1982 as an equity research analyst. A native of Denver, Mr. Rasplicka is a magna cum laude graduate of the University of Colorado in Boulder with a B.S. in business administration. He earned an M.B.A. from the University of Chicago. He is a Chartered Investment Counselor.

Brent Lium

Chartered Financial Analyst, portfolio manager, is manager of AIM V.I. Dynamics Fund. He joined Invesco in 1999 in its corporate associate program and joined Invesco Aim in 2003. Mr. Lium earned a B.B.A. from Texas A&M University and an M.B.A. from The University of Texas at Austin.

Assisted by the Mid Cap Growth Team

AIM V.I. Dynamics Fund

Your Fund’s Long-Term Performance

Results of a $10,000 Investment – Oldest Share Class since Inception

Fund data from 8/22/97, index data from 8/31/97

$40,000 $17,292 Russell Midcap Growth Index¹ 20,000 $16,342 Lipper VUF Mid-Cap Growth Funds Index¹ $15,352 S&P 500 Index¹ 10,000 $14,473 AIM V.I. Dynamics Fund- Series I Shares 5,000 8/22/97 12/98 12/99 12/00 12/01 12/02 12/03 12/04 12/05 12/06 12/07 12/08 12/09

1 Lipper Inc.

Past performance cannot guarantee comparable future results.

     This chart, which is a logarithmic chart, presents the fluctuations in the value of the Fund and its indexes. We believe that a logarithmic chart is more effective than other types of charts in illustrating changes in value during the early years shown in the chart. The vertical axis, the one that indicates the dollar value of an investment, is constructed with each segment representing a percent change in the value of the investment. In this chart, each segment represents a doubling, or 100% change, in the value of the investment. In other words, the space between $5,000 and $10,000 is the same size as the space between $10,000 and $20,000, and so on.

Average Annual Total Returns
As of 12/31/09

Series I Shares
Inception (8/22/97)	3.04	%
10 Years	-2.79
5 Years	1.30
1 Year	42.44
Series II Shares
10 Years	-3.01	%
5 Years	1.09
1 Year	42.31

Series II shares’ inception date is April 30, 2004. Returns since that date are historical. All other returns are the blended returns of the historical performance of Series II shares since their inception and the restated historical performance of Series I shares (for periods prior to inception of Series II shares) adjusted to reflect the Rule 12b-1 fees applicable to Series II shares. The inception date of Series I shares is August 22, 1997. The performance of the Fund’s Series I and Series II share classes will differ primarily due to different class expenses.

     The performance data quoted represent past performance and cannot guarantee comparable future results; current performance may be lower or higher. Please contact your variable product issuer or financial adviser for the most recent month-end variable product performance. Performance figures reflect Fund expenses, reinvested distributions and changes in net asset value. Investment return and principal value will fluctuate so that you may have a gain or loss when you sell shares.

     The net annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 1.22% and 1.45%, respectively.¹ The total annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 1.22% and 1.47%, respectively. The expense ratios presented above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

     AIM V.I. Dynamics Fund, a series portfolio of AIM Variable Insurance Funds, is currently offered through insurance companies issuing variable products. You cannot purchase shares of the Fund directly. Performance figures given represent the Fund and are not intended to reflect actual variable product values. They do not reflect sales charges, expenses and fees assessed in connection with a variable product. Sales charges, expenses and fees, which are determined by the variable product issuers, will vary and will lower the total return.

     The most recent month-end performance data at the Fund level, excluding variable product charges, is available on the Invesco Aim automated information line, 866 702 4402. As mentioned above, for the most recent month-end performance including variable product charges, please contact your variable product issuer or financial adviser.

1 Total annual operating expenses less any contractual fee waivers and/or expense reimbursements by the adviser in effect through at least April 30, 2011. See current prospectus for more information.

AIM V.I. Dynamics Fund

AIM V.I. Dynamics Fund’s investment objective is long-term capital growth.

n	Unless otherwise stated, information presented in this report is as of December 31, 2009, and is based on total net assets.
n	Unless otherwise noted, all data provided by Invesco.

Principal risks of investing in the Fund

Prices of equity securities change in response to many factors, including the historical and prospective earnings of the issuer, the value of its assets, general economic conditions, interest rates, investor perceptions and market The Fund invests in “growth” stocks, which may be more volatile than other investment styles because growth stocks are more sensitive to investor perceptions of an issuing company’s growth potential.

     There is no guarantee that the investment techniques and risk analysis used by the Fund’s portfolio managers will produce the desired results.

     Stocks fall into three broad market capitalization categories — large, medium, and small. Investing primarily in one category carries the risk that, due to current market conditions, that category may be out of favor with investors. Small and mid-sized companies may tend to be more vulnerable to adverse developments and more volatile than larger companies. Investments in small and mid-sized companies may involve special risks, including those associated with dependence on a small management group, little of no operating history, little or no track record of success, and limited product lines, market and financial resources. Also, there may be less publicly available information about the issuers of the securities or less market interest in such securities than in the case of larger companies, each of which can cause significant price volatility. The securities of small and mid-sized companies may be illiquid, restricted as to resale, or may trade less frequently and in smaller volume than more widely held securities, which may make it difficult for fund to establish or close out a position in these securities at prevailing market prices. The prices of securities held by the Fund may decline in response to market risks.

     The prices of securities held by the Fund may decline in response to market risks.

About indexes used in this report

The S&P 500® Index is an unmanaged index considered representative of the U.S. stock market.

     The Russell Midcap^® Growth Index is an unmanaged index considered representative of mid-cap growth stocks. The Russell Midcap Growth Index is a trademark/service mark of the Frank Russell Co. Russell® is a trademark of the Frank Russell Co.

     The Lipper VUF Mid-Cap Growth Funds Index is an unmanaged index considered representative of mid-cap growth variable insurance underlying funds tracked by Lipper.

     The Fund is not managed to track the performance of any particular index, including the indexes defined here, and consequently, the performance of the Fund may deviate significantly from the performance of the indexes.

     A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group reflects fund expenses; performance of a market index does not.

Other information

The Chartered Financial Analyst® (CFA®) designation is globally recognized and attests to a charterholder’s success in a rigorous and comprehensive study program in the field of investment management and research analysis.

     The returns shown in management’s discussion of Fund performance are based on net asset values calculated for shareholder transactions. Generally accepted accounting principles require adjustments to be made to the net assets of the Fund at period end for financial reporting purposes, and as such, the net asset values for shareholder transactions and the returns based on those net asset values may differ from the net asset values and returns reported in the Financial Highlights. Additionally, the returns and net asset values shown throughout this report are at the Fund level only and do not include variable product issuer charges. If such charges were included, the total returns would be lower.

     Industry classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s.

AIM V.I. Dynamics Fund

Schedule of Investments^(a)

December 31, 2009

	Shares		Value
Common Stocks–98.93%
Aerospace & Defense–1.14%
BE Aerospace, Inc.(b)		24,591	$	577,889
Air Freight & Logistics–0.91%
UTI Worldwide, Inc.		32,156		460,474
Apparel Retail–1.56%
American Eagle Outfitters, Inc.		46,304		786,242
Apparel, Accessories & Luxury Goods–3.47%
Carter’s, Inc.(b)		22,929		601,886
Coach, Inc.		13,574		495,858
Hanesbrands, Inc.(b)		27,097		653,309
				1,751,053
Application Software–3.70%
Adobe Systems Inc.(b)		13,895		511,058
Autodesk, Inc.(b)		29,860		758,743
Solera Holdings Inc.		16,715		601,907
				1,871,708
Asset Management & Custody Banks–1.94%
Affiliated Managers Group, Inc.(b)		8,926		601,166
State Street Corp.		8,761		381,454
				982,620
Automotive Retail–0.41%
O’Reilly Automotive, Inc.(b)		5,417		206,496
Biotechnology–2.09%
Talecris Biotherapeutics Holdings Corp.(b)		24,407		543,544
United Therapeutics Corp.(b)		9,699		510,652
				1,054,196
Casinos & Gaming–0.88%
International Game Technology		23,738		445,562
Coal & Consumable Fuels–1.06%
CONSOL Energy Inc.		10,734		534,553
Communications Equipment–0.77%
Brocade Communications Systems, Inc.(b)		50,846		387,955
Computer Storage & Peripherals–2.33%
NetApp, Inc.(b)		16,801		577,786
Western Digital Corp.(b)		13,620		601,323
				1,179,109
Construction & Engineering–1.50%
Quanta Services, Inc.(b)		16,624		346,444
Shaw Group Inc. (The)(b)		14,304		411,240
				757,684
Construction, Farm Machinery & Heavy Trucks–0.55%
Bucyrus International, Inc.		4,917		277,171
Consumer Finance–0.49%
Capital One Financial Corp.		6,424		246,296
Data Processing & Outsourced Services–1.22%
Alliance Data Systems Corp.(b)(c)		9,578		618,643
Department Stores–2.54%
Macy’s, Inc.		44,815		751,100
Nordstrom, Inc.		14,135		531,193
				1,282,293
Distributors–0.99%
LKQ Corp.(b)		25,641		502,307
Diversified Metals & Mining–1.99%
Freeport-McMoRan Copper & Gold Inc.		4,763		382,422
Walter Energy, Inc.		8,246		621,006
				1,003,428
Diversified Support Services–1.98%
Copart, Inc.(b)		13,136		481,172
KAR Auction Services Inc.(b)		37,517		517,359
				998,531
Education Services–2.79%
Capella Education Co.(b)		10,025		754,882
ITT Educational Services, Inc.(b)		6,836		655,983
				1,410,865
Electrical Components & Equipment–2.40%
Baldor Electric Co.		19,151		537,952
Cooper Industries PLC (Ireland)		15,822		674,650
				1,212,602
Electronic Components–1.27%
Amphenol Corp.–Class A		13,855		639,824
Environmental & Facilities Services–1.00%
Republic Services, Inc.		17,832		504,824
Fertilizers & Agricultural Chemicals–1.17%
Intrepid Potash, Inc.(b)		20,319		592,705

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

AIM V.I. Dynamics Fund

	Shares		Value
Health Care Equipment–2.05%
American Medical Systems Holdings, Inc.(b)		30,435	$	587,091
NuVasive, Inc.(b)		5,631		180,080
ResMed Inc.(b)		5,142		268,772
				1,035,943
Health Care Facilities–1.52%
Psychiatric Solutions, Inc.(b)		16,716		353,376
VCA Antech, Inc.(b)		16,739		417,136
				770,512
Health Care Services–1.63%
Express Scripts, Inc.(b)		5,641		487,665
Fresenius Medical Care AG & Co. KGaA (Germany)		6,398		338,346
				826,011
Hotels, Resorts & Cruise Lines–1.04%
Starwood Hotels & Resorts Worldwide, Inc.		14,404		526,754
Household Products–0.91%
Energizer Holdings, Inc.(b)		7,464		457,394
Housewares & Specialties–1.52%
Jarden Corp.		24,790		766,259
Human Resource & Employment Services–0.98%
Robert Half International, Inc.		18,471		493,730
Independent Power Producers & Energy Traders–1.29%
KGEN Power Corp. (Acquired 01/12/07; Cost $613,032)(b)(d)		43,788		262,728
NRG Energy, Inc.(b)		16,567		391,147
				653,875
Industrial Machinery–0.96%
Flowserve Corp.		5,152		487,019
Investment Banking & Brokerage–1.16%
TD Ameritrade Holding Corp.(b)		30,293		587,078
IT Consulting & Other Services–1.48%
Cognizant Technology Solutions Corp.–Class A(b)		16,515		748,129
Life & Health Insurance–2.09%
Aflac, Inc.		11,533		533,401
Lincoln National Corp.		21,059		523,948
				1,057,349
Life Sciences Tools & Services–1.59%
Pharmaceutical Product Development, Inc.		11,714		274,576
Thermo Fisher Scientific, Inc.(b)		11,074		528,119
				802,695
Managed Health Care–2.14%
AMERIGROUP Corp.(b)		22,269		600,372
Aveta, Inc. (Acquired 12/21/05-05/22/06; Cost $1,165,095)(b)(d)		80,000		480,000
				1,080,372
Metal & Glass Containers–1.01%
Crown Holdings, Inc.(b)		20,042		512,674
Multi-Line Insurance–1.03%
Genworth Financial Inc.–Class A(b)		45,994		522,032
Oil & Gas Drilling–1.46%
Noble Corp.		12,101		492,511
Patterson-UTI Energy, Inc.		15,926		244,464
				736,975
Oil & Gas Equipment & Services–1.74%
Key Energy Services, Inc.(b)		66,994		588,877
Petroleum Geo-Services A.S.A. (Norway)(b)		25,571		290,080
				878,957
Oil & Gas Exploration & Production–5.76%
Atlas Energy, Inc.		17,956		541,721
Continental Resources, Inc.(b)		20,499		879,202
EXCO Resources, Inc.		30,727		652,334
SandRidge Energy, Inc.(b)		50,368		474,970
Southwestern Energy Co.(b)		7,553		364,055
				2,912,282
Personal Products–1.54%
Estee Lauder Cos. Inc. (The)–Class A		16,048		776,081
Pharmaceuticals–0.60%
Shire PLC (United Kingdom)		15,524		303,527
Real Estate Services–1.50%
Jones Lang LaSalle Inc.		12,536		757,174
Research & Consulting Services–1.00%
IHS Inc.–Class A(b)		9,235		506,170
Security & Alarm Services–0.98%
Corrections Corp. of America(b)		20,274		497,727
Semiconductor Equipment–2.19%
ASML Holding N.V. (Netherlands)		16,311		554,029
KLA-Tencor Corp.		15,249		551,404
				1,105,433
Semiconductors–7.47%
Altera Corp.		33,159		750,388
Avago Technologies Ltd. (Singapore)(b)		43,291		791,792
Broadcom Corp.–Class A(b)		15,609		490,903

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

AIM V.I. Dynamics Fund

	Shares		Value
Semiconductors–(continued)
Marvell Technology Group Ltd.(b)		32,753	$	679,625
ON Semiconductor Corp.(b)		58,791		517,949
Xilinx, Inc.		21,759		545,281
				3,775,938
Specialty Chemicals–0.99%
Albemarle Corp.		13,810		502,270
Specialty Stores–0.91%
Ulta Salon, Cosmetics & Fragrance, Inc.(b)		25,363		460,592
Steel–0.94%
Steel Dynamics, Inc.		26,701		473,142
Systems Software–2.58%
Check Point Software Technologies Ltd. (Israel)(b)		20,629		698,910
McAfee Inc.(b)		14,866		603,114
				1,302,024
Tires & Rubber–0.96%
Goodyear Tire & Rubber Co. (The)(b)		34,282		483,376
Trading Companies & Distributors–0.96%
Fastenal Co.(c)		11,640		484,690
Trucking–3.78%
Con-way Inc.		13,652		476,591
J.B. Hunt Transport Services, Inc.		15,526		501,024
Knight Transportation, Inc.		23,741		457,964
Landstar System, Inc.		12,301		476,910
				1,912,489
Wireless Telecommunication Services–1.02%
Crown Castle International Corp.(b)		13,197		515,211
Total Common Stocks (Cost $44,389,928)				49,996,914
Money Market Funds–1.38%
Liquid Assets Portfolio–Institutional Class(e)		348,790		348,790
Premier Portfolio–Institutional Class(e)		348,790		348,790
Total Money Market Funds (Cost $697,580)				697,580
TOTAL INVESTMENTS (excluding investments purchased with cash collateral from securities on loan)–100.31% (Cost $45,087,508)				50,694,494
Investments Purchased with Cash Collateral from Securities on Loan
Money Market Funds–1.67%
Liquid Assets Portfolio–Institutional Class (Cost $843,711)(e)(f)		843,711		843,711
TOTAL INVESTMENTS–101.98% (Cost $45,931,219)				51,538,205
OTHER ASSETS LESS LIABILITIES–(1.98)%				(1,002,905	)
NET ASSETS–100.00%			$	50,535,300

Notes to Schedule of Investments:

(a)	Industry and/or sector classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s.
(b)	Non-income producing security.
(c)	All or a portion of this security was out on loan at December 31, 2009.
(d)	Security purchased or received in a transaction exempt from registration under the Securities Act of 1933, as amended. The security may be resold pursuant to an exemption from registration under the 1933 Act, typically to qualified institutional buyers. The aggregate value of these securities at December 31, 2009 was $742,728, which represented 1.47% of the Fund’s Net Assets.
(e)	The money market fund and the Fund are affiliated by having the same investment adviser.
(f)	The security has been segregated to satisfy the commitment to return the cash collateral received in securities lending transactions upon the borrower’s return of the securities loaned. See Note 1I.

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

AIM V.I. Dynamics Fund

Statement of Assets and Liabilities

December 31, 2009

Assets:
Investments, at value (Cost $44,389,928)*	$	49,996,914
Investments in affiliated money market funds, at value and cost		1,541,291
Total investments, at value (Cost $45,931,219)		51,538,205
Receivables for:
Fund shares sold		5,045
Dividends		29,838
Investment for trustee deferred compensation and retirement plans		11,175
Total assets		51,584,263
Liabilities:
Payables for:
Fund shares reacquired		85,645
Amount due custodian		38,166
Collateral upon return of securities loaned		843,711
Accrued fees to affiliates		29,709
Accrued other operating expenses		30,742
Trustee deferred compensation and retirement plans		20,990
Total liabilities		1,048,963
Net assets applicable to shares outstanding	$	50,535,300
Net assets consist of:
Shares of beneficial interest	$	126,325,621
Undistributed net investment income (loss)		(20,836	)
Undistributed net realized gain (loss)		(81,376,526	)
Unrealized appreciation		5,607,041
	$	50,535,300
Net Assets:
Series I	$	50,528,148
Series II	$	7,152
Shares outstanding, $0.001 par value per share, unlimited number of shares authorized:
Series I		3,550,838
Series II		508.7
Series I:
Net asset value per share	$	14.23
Series II:
Net asset value per share	$	14.06

*  At December 31, 2009, securities with an aggregate value of $820,857 were on loan to brokers.

Statement of Operations

For the year ended December 31, 2009

Investment income:
Dividends (net of foreign withholding taxes of $3,060)	$	257,755
Dividends from affiliated money market funds (includes securities lending income of $2,127)		7,530
Total investment income		265,285
Expenses:
Advisory fees		328,847
Administrative services fees		160,093
Custodian fees		12,550
Distribution fees — Series II		15
Transfer agent fees		16,913
Trustees’ and officers’ fees and benefits		21,253
Professional services fees		37,630
Other		11,250
Total expenses		588,551
Less: Fees waived		(16,133	)
Net expenses		572,418
Net investment income (loss)		(307,133	)
Realized and unrealized gain (loss) from:
Net realized gain (loss) from:
Investment securities (includes net gains from securities sold to affiliates of $75,594)		(5,128,094	)
Foreign currencies		(1,416	)
		(5,129,510	)
Change in net unrealized appreciation of:
Investment securities		21,019,220
Foreign currencies		41
		21,019,261
Net realized and unrealized gain		15,889,751
Net increase in net assets resulting from operations	$	15,582,618

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

AIM V.I. Dynamics Fund

Statement of Changes in Net Assets

For the years ended December 31, 2009 and 2008

	2009			2008
Operations:
Net investment income (loss)	$	(307,133	)	$	(495,009	)
Net realized gain (loss)		(5,129,510	)		(20,959,904	)
Change in net unrealized appreciation (depreciation)		21,019,261			(25,826,186	)
Net increase (decrease) in net assets resulting from operations		15,582,618			(47,281,099	)
Share transactions-net:
Series I		(6,716,157	)		(33,243,831	)
Series II		—			—
Net increase (decrease) in net assets resulting from share transactions		(6,716,157	)		(33,243,831	)
Net increase (decrease) in net assets		8,866,461			(80,524,930	)
Net assets:
Beginning of year		41,668,839			122,193,769
End of year (includes undistributed net investment income (loss) of $(20,836) and $(31,157), respectively)	$	50,535,300		$	41,668,839

Notes to Financial Statements

December 31, 2009

NOTE 1—Significant Accounting Policies

AIM V.I. Dynamics Fund (the “Fund”) is a series portfolio of AIM Variable Insurance Funds (the “Trust”). The Trust is a Delaware statutory trust registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end series management investment company consisting of twenty-one separate portfolios, (each constituting a “Fund”). The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Matters affecting each Fund or class will be voted on exclusively by the shareholders of such Fund or class. Current Securities and Exchange Commission (“SEC”) guidance, however, requires participating insurance companies offering separate accounts to vote shares proportionally in accordance with the instructions of the contract owners whose investments are funded by shares of each Fund or class.

  The Fund’s investment objective is long-term capital growth.

  The Fund currently offers two classes of shares, Series I and Series II, both of which are offered to insurance company separate accounts funding variable annuity contracts and variable life insurance policies (“variable products”).

  The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements.

A.	Security Valuations — Securities, including restricted securities, are valued according to the following policy.
	A security listed or traded on an exchange (except convertible bonds) is valued at its last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales or official closing price on a particular day, the security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based on prices furnished by independent pricing services or market makers. When such securities are valued by an independent pricing service they may be considered fair valued. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean between the last bid and ask prices from the exchange on which they are principally traded. Options not listed on an exchange are valued by an independent source at the mean between the last bid and ask prices. For purposes of determining net asset value per share, futures and option contracts generally are valued 15 minutes after the close of the customary trading session of the New York Stock Exchange (“NYSE”).
	Investments in open-end and closed-end registered investment companies that do not trade on an exchange are valued at the end of day net asset value per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded.
	Debt obligations (including convertible bonds) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution-size trading in similar groups of securities, developments related to specific securities, dividend rate, yield, quality, type of issue, coupon rate, maturity, individual trading characteristics and other market data. Short-term obligations, including commercial paper, having 60 days or less to maturity are recorded at amortized cost which approximates value. Debt securities are subject to interest rate and credit risks. In addition, all debt securities involve some risk of default with respect to interest and/or principal payments.
	Foreign securities (including foreign exchange contracts) are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the NYSE. If market quotations are available and reliable for foreign exchange traded equity securities, the securities will be valued at the market

AIM V.I. Dynamics Fund

	quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that are significant and make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economical upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
	Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities and Corporate Loans. The mean between the last bid and asked prices may be used to value debt obligations other than Corporate Loans.
	Securities for which market quotations are not readily available or are unreliable are valued at fair value as determined in good faith by or under the supervision of the Trust’s officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a security’s fair value.
	Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
B.	Securities Transactions and Investment Income — Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income is recorded on the accrual basis from settlement date. Dividend income is recorded on the ex-dividend date.
	The Fund may periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain/loss for investments no longer held and as unrealized gain/loss for investments still held.
	Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the realized and unrealized net gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the Fund’s net asset value and, accordingly, they reduce the Fund’s total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in the Statement of Operations and Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the adviser.
	The Fund allocates income and realized and unrealized capital gains and losses to a class based on the relative net assets of each class.
C.	Country Determination — For the purposes of making investment selection decisions and presentation in the Schedule of Investments, the investment adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuer’s securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted.
D.	Distributions — Distributions from income and net realized capital gain, if any, are generally paid to separate accounts of participating insurance companies annually and recorded on ex-dividend date.
E.	Federal Income Taxes — The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code necessary to qualify as a regulated investment company and to distribute substantially all of the Fund’s taxable earnings to shareholders. As such, the Fund will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements.
	The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.
F.	Expenses — Fees provided for under the Rule 12b-1 plan of a particular class of the Fund and which are directly attributable to that class are charged to the operations of such class. All other expenses are allocated among the classes based on relative net assets.
G.	Accounting Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print, which is generally 45 days from the period-end date.
H.	Indemnifications — Under the Trust’s organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into

AIM V.I. Dynamics Fund

	contracts, including the Fund’s servicing agreements, that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote.
I.	Securities Lending — The Fund may lend portfolio securities having a market value up to one-third of the Fund’s total assets. Such loans are secured by collateral equal to no less than the market value of the loaned securities determined daily by the securities lending provider. Such collateral will be cash or debt securities issued or guaranteed by the U.S. Government or any of its sponsored agencies. Cash collateral received in connection with these loans is invested in short-term money market instruments or affiliated money market funds and is shown as such on the Schedule of Investments. It is the Fund’s policy to obtain additional collateral from or return excess collateral to the borrower by the end of the next business day, following the valuation date of the securities loaned. Therefore, the value of the collateral held may be temporarily less than the value of the securities on loan. Lending securities entails a risk of loss to the Fund if and to the extent that the market value of the securities loaned were to increase and the borrower did not increase the collateral accordingly, and the borrower fails to return the securities. Upon the failure of the borrower to return the securities, collateral may be liquidated and the securities may be purchased on the open market to replace the loaned securities. The Fund could experience delays and costs in gaining access to the collateral. The Fund bears the risk of any deficiency in the amount of the collateral available for return to the borrower due to any loss on the collateral invested. Dividends received on cash collateral investments for securities lending transactions, which are net of compensation to counterparties, is included in Dividends from affiliates on the Statement of Operations. The aggregate value of securities out on loan is shown as a footnote on the Statement of Assets and Liabilities, if any.
J.	Foreign Currency Translations — Foreign currency is valued at the close of the NYSE based on quotations posted by banks and major currency dealers. Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at date of valuation. Purchases and sales of portfolio securities (net of foreign taxes withheld on disposition) and income items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. The Fund does not separately account for the portion of the results of operations resulting from changes in foreign exchange rates on investments and the fluctuations arising from changes in market prices of securities held. The combined results of changes in foreign exchange rates and the fluctuation of market prices on investments (net of estimated foreign tax withholding) are included with the net realized and unrealized gain or loss from investments in the Statement of Operations. Reported net realized foreign currency gains or losses arise from (i) sales of foreign currencies, (ii) currency gains or losses realized between the trade and settlement dates on securities transactions, and (iii) the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign currency gains and losses arise from changes in the fair values of assets and liabilities, other than investments in securities at fiscal period end, resulting from changes in exchange rates.
	The Fund may invest in foreign securities which may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable.
K.	Foreign Currency Contracts — The Fund may enter into foreign currency contracts to manage or minimize currency or exchange rate risk. The Fund may also enter into foreign currency contracts for the purchase or sale of a security denominated in a foreign currency in order to “lock in” the U.S. dollar price of that security. A foreign currency contract is an obligation to purchase or sell a specific currency for an agreed-upon price at a future date. The use of foreign currency contracts does not eliminate fluctuations in the price of the underlying securities the Fund owns or intends to acquire but establishes a rate of exchange in advance. Fluctuations in the value of these contracts are measured by the difference in the contract date and reporting date exchange rates and are recorded as unrealized appreciation (depreciation) until the contracts are closed. When the contracts are closed, realized gains (losses) are recorded. Realized and unrealized gains (losses) on the contracts are included in the Statement of Operations. The primary risks associated with foreign currency contracts include failure of the counterparty to meet the terms of the contract and the value of the foreign currency changing unfavorably. These risks may be in excess of the amounts reflected in the Statement of Assets and Liabilities.

NOTE 2—Advisory Fees and Other Fees Paid to Affiliates

The Trust has entered into a master investment advisory agreement with Invesco Advisers, Inc. (the “Adviser” or “Invesco”). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Adviser based on the annual rate of the Fund’s average daily net assets as follows:

Average Net Assets	Rate
First $250 million		0	.745%
Next $250 million		0	.73%
Next $500 million		0	.715%
Next $1.5 billion		0	.70%
Next $2.5 billion		0	.685%
Next $2.5 billion		0	.67%
Next $2.5 billion		0	.655%
Over $10 billion		0	.64%

  Under the terms of a master sub-advisory agreement approved by shareholders of the Funds between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Trimark Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Funds, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide discretionary investment management services to each Fund based on the percentage of assets allocated to such Sub-Adviser(s).

AIM V.I. Dynamics Fund

  On December 31, 2009, Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc., Invesco Private Asset Management, Inc. and Invesco Global Asset Management (N.A.), Inc. merged into Invesco Institutional (N.A.), Inc. and the consolidated adviser firm was renamed Invesco Advisers, Inc.

  The Adviser has contractually agreed to waive advisory fees and/or reimburse expenses of all shares to the extent necessary to limit total annual fund operating expenses after fee waiver (excluding certain items discussed below) of Series I shares to 1.30% and Series II shares to 1.45% of average daily net assets, through at least April 30, 2011. In determining the Adviser’s obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the total annual fund operating expenses after fee waiver to exceed the numbers reflected above: (1) interest; (2) taxes; (3) dividend expense on short sales; (4) extraordinary items or non-routine items; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. The Board of Trustees or Invesco may terminate the fee waiver arrangement at any time.

  Further, the Adviser has contractually agreed, through at least June 30, 2010, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash (excluding investments of cash collateral from securities lending) in such affiliated money market funds.

  For the year ended December 31, 2009, the Adviser waived advisory fees of $16,127 and class level expenses of $6 for Series II shares.

  At the request of the Trustees of the Trust, Invesco Ltd. agreed to reimburse expenses incurred by the Fund in connection with market timing matters in the AIM Funds, which may include legal, audit, shareholder reporting, communications and trustee expenses. For the year ended December 31, 2009, Invesco Ltd. did not reimburse any expenses.

  The Trust has entered into a master administrative services agreement with Invesco pursuant to which the Fund has agreed to pay Invesco a fee for costs incurred in providing accounting services and fund administrative services to the Fund and to reimburse Invesco for administrative services fees paid to insurance companies that have agreed to provide services to the participants of separate accounts. These administrative services provided by the insurance companies may include, among other things: the printing of prospectuses, financial reports and proxy statements and the delivery of the same to existing participants; the maintenance of master accounts; the facilitation of purchases and redemptions requested by the participants; and the servicing of participants’ accounts. Pursuant to such agreement, for the year ended December 31, 2009, Invesco was paid $50,000 for accounting and fund administrative services and reimbursed $110,093 for services provided by insurance companies.

  The Trust has entered into a transfer agency and service agreement with Invesco Aim Investment Services, Inc. (“IAIS”) pursuant to which the Fund has agreed to pay IAIS a fee for providing transfer agency and shareholder services to the Fund and reimburse IAIS for certain expenses incurred by IAIS in the course of providing such services. For the year ended December 31, 2009, expenses incurred under the agreement are shown in the Statement of Operations as transfer agent fees.

  The Trust has entered into a master distribution agreement with Invesco Aim Distributors, Inc. (“IADI”) to serve as the distributor for the Fund. The Trust has adopted a plan pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund’s Series II shares (the “Plan”). The Fund, pursuant to the Plan, pays IADI compensation at the annual rate of 0.25% of the Fund’s average daily net assets of Series II shares. Of the Plan payments, up to 0.25% of the average daily net assets of the Series II shares may be paid to insurance companies who furnish continuing personal shareholder services to customers who purchase and own Series II shares of the Fund. For the year ended December 31, 2009, expenses incurred under the Plan are detailed in the Statement of Operations as distribution fees.

  Certain officers and trustees of the Trust are officers and directors of Invesco, IAIS and/or IADI.

NOTE 3—Additional Valuation Information

Generally Accepted Accounting Principles (“GAAP”) defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3) generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment’s assigned level:

Level 1 —	Prices are determined using quoted prices in an active market for identical assets.
Level 2 —	Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk and others.
Level 3 —	Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information.

  The following is a summary of the tiered valuation input levels, as of December 31, 2009. The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.

	Level 1		Level 2		Level 3		Total
Equity Securities	$	49,951,368	$	844,109	$	742,728	$	51,538,205

AIM V.I. Dynamics Fund

NOTE 4—Security Transactions with Affiliated Funds

The Fund is permitted to purchase or sell securities from or to certain other AIM Funds under specified conditions outlined in procedures adopted by the Board of Trustees of the Trust. The procedures have been designed to ensure that any purchase or sale of securities by the Fund from or to another fund or portfolio that is or could be considered an affiliate by virtue of having a common investment adviser (or affiliated investment advisers), common Trustees and/or common officers complies with Rule 17a-7 of the 1940 Act. Further, as defined under the procedures, each transaction is effected at the current market price. Pursuant to these procedures, for the year ended December 31, 2009, the Fund engaged in securities purchases of $359,901 and securities sales of $456,769, which resulted in net realized gains of $75,594.

NOTE 5—Trustees’ and Officers’ Fees and Benefits

“Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and “Trustees’ and Officers’ Fees and Benefits” also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various AIM Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees are eligible to participate in a retirement plan that provides for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former Trustees who also participate in a retirement plan and receive benefits under such plan. “Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund.

  During the year ended December 31, 2009, the Fund paid legal fees of $2,865 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A member of that firm is a Trustee of the Trust.

NOTE 6—Cash Balances

The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with The State Street Bank and Trust Company, the custodian bank. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (i) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (ii) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.

NOTE 7—Distributions to Shareholders and Tax Components of Net Assets

Tax Character of Distributions to Shareholders Paid During the Years Ended December 31, 2009 and 2008:

There were no ordinary income or long-term capital gain distibutions paid during the years ended December 31, 2009 and 2008.

Tax Components of Net Assets at Period-End:

	2009
Net unrealized appreciation — investments	$	5,571,588
Net unrealized appreciation — other investments		55
Temporary book/tax differences		(20,836	)
Capital loss carryforward		(81,341,128	)
Shares of beneficial interest		126,325,621
Total net assets	$	50,535,300

  The difference between book-basis and tax-basis unrealized appreciation is due to differences in the timing of recognition of gains and losses on investments for tax and book purposes. The Fund’s net unrealized appreciation difference is attributable primarily to wash sales.

  The temporary book/tax differences are a result of timing differences between book and tax recognition of income and/or expenses. The Fund’s temporary book/tax differences are the result of the trustee deferral of compensation and retirement plan benefits.

  Capital loss carryforward is calculated and reported as of a specific date. Results of transactions and other activity after that date may affect the amount of capital loss carryforward actually available for the Fund to utilize. The ability to utilize capital loss carryforward in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.

  The Fund has a capital loss carryforward as of December 31, 2009 which expires as follows:

	Capital Loss
Expiration	Carryforward*
December 31, 2010	$	55,297,523
December 31, 2016		15,509,594
December 31, 2017		10,534,011
Total capital loss carryforward	$	81,341,128

*  Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code.

AIM V.I. Dynamics Fund

NOTE 8—Investment Securities

The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the year ended December 31, 2009 was $41,724,993 and $48,711,143, respectively. Cost of investments on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed Federal income tax reporting period-end.

Unrealized Appreciation (Depreciation) of Investment Securities on a Tax Basis
Aggregate unrealized appreciation of investment securities	$	8,528,018
Aggregate unrealized (depreciation) of investment securities		(2,956,430	)
Net unrealized appreciation of investment securities	$	5,571,588
Cost of investments for tax purposes is $45,966,617.

NOTE 9—Reclassification of Permanent Differences

Primarily as a result of differing book/tax treatment of partnerships and net operating losses, on December 31, 2009, undistributed net investment income (loss) was increased by $317,454, undistributed net realized gain (loss) was increased by $60,712 and shares of beneficial interest decreased by $378,166. This reclassification had no effect on the net assets of the Fund.

NOTE 10—Share Information

	Summary of Share Activity
	Year ended December 31,
	2009(a)						2008
	Shares			Amount			Shares			Amount
Sold:
Series I		838,528		$	9,769,860			972,706		$	15,255,323
Series II		—			—			—			—
Reacquired:
Series I		(1,457,783	)		(16,486,017	)		(3,154,261	)		(48,499,154	)
Series II		—			—			—			—
Net increase (decrease) in share activity		(619,255	)	$	(6,716,157	)		(2,181,555	)	$	(33,243,831	)

^(a) There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 68% of the outstanding shares of the Fund. The Fund and the Fund’s principal underwriter or adviser, are parties to participation agreements with these entities whereby these entities sell units of interest in separate accounts funding variable products that are invested in the Fund. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and or Invesco affiliates including but not limited to services such as, securities brokerage, third party record keeping and account servicing and administrative services. The Trust has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially.

AIM V.I. Dynamics Fund

NOTE 11—Financial Highlights

The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.

																			Ratio of			Ratio of
																			expenses			expenses
						Net gains													to average			to average net			Ratio of net
	Net asset		Net			(losses) on													net assets			assets without			investment
	value,		investment			securities (both			Total from			Net asset					Net assets,		with fee waivers			fee waivers			income (loss)
	beginning		income			realized and			investment			value, end		Total			end of period		and/or expenses			and/or expenses			to average			Portfolio
	of period		(loss)			unrealized)			operations			of period		Return(a)			(000s omitted)		absorbed			absorbed			net assets			turnover(b)
Series I
Year ended 12/31/09	$	9.99	$	(0.08	)(c)	$	4.32		$	4.24		$	14.23		42.44	%	$	50,528		1.30	%(d)		1.33	%(d)		(0.70	)%(d)		97	%
Year ended 12/31/08		19.24		(0.10	)(c)		(9.15	)		(9.25	)		9.99		(48.08	)		41,664		1.22			1.22			(0.62	)		106
Year ended 12/31/07		17.15		(0.11	)(c)		2.20			2.09			19.24		12.19			122,184		1.11			1.11			(0.58	)		115
Year ended 12/31/06		14.77		(0.09	)		2.47			2.38			17.15		16.11			120,792		1.12			1.13			(0.51	)		142
Year ended 12/31/05		13.34		(0.04	)		1.47			1.43			14.77		10.72			111,655		1.16			1.17			(0.29	)		110
Series II
Year ended 12/31/09		9.88		(0.09	)(c)		4.27			4.18			14.06		42.31			7		1.45	(d)		1.58	(d)		(0.85	)(d)		97
Year ended 12/31/08		19.06		(0.12	)(c)		(9.06	)		(9.18	)		9.88		(48.16	)		5		1.45			1.47			(0.85	)		106
Year ended 12/31/07		17.04		(0.15	)(c)		2.17			2.02			19.06		11.85			10		1.36			1.36			(0.83	)		115
Year ended 12/31/06		14.71		(0.12	)		2.45			2.33			17.04		15.84			14		1.37			1.38			(0.76	)		142
Year ended 12/31/05		13.32		(0.07	)		1.46			1.39			14.71		10.44			12		1.41			1.42			(0.54	)		110

(a)	Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Total returns do not reflect charges assessed in connection with a variable product, which if included would reduce total returns.
(b)	Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable.
(c)	Calculated using average shares outstanding.
(d)	Ratios are based on average daily net assets (000’s omitted) of $44,135 and $6 for Series I and Series II shares, respectively.

AIM V.I. Dynamics Fund

Report of Independent Registered Public Accounting Firm

To the Board of Trustees of AIM Variable Insurance Funds

and Shareholders of AIM V.I. Dynamics Fund:

In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of AIM V.I. Dynamics Fund (one of the funds constituting AIM Variable Insurance Funds, hereafter referred to as the “Fund”) at December 31, 2009, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at December 31, 2009 by correspondence with the custodian, provide a reasonable basis for our opinion.

PRICEWATERHOUSECOOPERS LLP

February 10, 2010

Houston, Texas

AIM V.I. Dynamics Fund

Calculating Your Ongoing Fund Expenses

Example

As a shareholder of the Fund, you incur ongoing costs, including management fees; distribution and/or service fees (12b-1); and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period July 1, 2009, through December 31, 2009.

  The actual and hypothetical expenses in the examples below do not represent the effect of any fees or other expenses assessed in connection with a variable product; if they did, the expenses shown would be higher while the ending account values shown would be lower.

Actual expenses

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

Hypothetical example for comparison purposes

The table below also provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return.

  The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

  Please note that the expenses shown in the table are meant to highlight your ongoing costs. Therefore, the hypothetical information is useful in comparing ongoing costs, and will not help you determine the relative total costs of owning different funds.

							HYPOTHETICAL
							(5% annual return before
			ACTUAL				expenses)
	Beginning		Ending		Expenses		Ending		Expenses		Annualized
	Account Value		Account Value		Paid During		Account Value		Paid During		Expense
Class	(07/01/09)		(12/31/09)1		Period2		(12/31/09)		Period2		Ratio
Series I	$	1,000.00	$	1,283.10	$	7.48	$	1,018.65	$	6.61		1.30	%
Series II		1,000.00		1,282.80		8.34		1,017.90		7.38		1.45

1	The actual ending account value is based on the actual total return of the Fund for the period July 1, 2009 through December 31, 2009, after actual expenses and will differ from the hypothetical ending account value which is based on the Fund’s expense ratio and a hypothetical annual return of 5% before expenses.
2	Expenses are equal to the Fund’s annualized expense ratio as indicated above multiplied by the average account value over the period, multiplied by 184/365 to reflect the most recent fiscal half year.

AIM V.I. Dynamics Fund

Trustees and Officers

The address of each trustee and officer of AIM Variable Insurance Funds (the “Trust”), is 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173. Each trustee oversees 105 portfolios in the AIM Funds complex. The trustees serve for the life of the Trust, subject to their earlier death, incapacitation, resignation, retirement or removal as more specifically provided in the Trust’s organizational documents. Each officer serves for a one year term or until their successors are elected and qualified. Column two below includes length of time served with predecessor entities, if any.

	Trustee and/
Name, Year of Birth and	or Officer	Principal Occupation(s)	Other Directorship(s)
Position(s) Held with the Trust	Since	During Past 5 Years	Held by Trustee
Interested Persons
Martin L. Flanagan1 — 1960 Trustee	2007	Executive Director, Chief Executive Officer and President, Invesco Ltd. (ultimate parent of Invesco Aim and a global investment management firm); Adviser to the Board, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Trustee, The AIM Family of Funds®; Board of Governors, Investment Company Institute; and Member of Executive Board, SMU Cox School of Business	None
		Formerly: Chairman, Invesco Aim Advisors, Inc. (registered investment adviser); Director, Chairman, Chief Executive Officer and President, IVZ Inc. (holding company), INVESCO Group Services, Inc. (service provider) and Invesco North American Holdings, Inc. (holding company); Director, Chief Executive Officer and President, Invesco Holding Company Limited (parent of Invesco Aim and a global investment management firm); Director, Invesco Ltd.; Chairman and Vice Chairman, Investment Company Institute
Philip A. Taylor2 — 1954 Trustee, President and Principal Executive Officer	2006	Head of North American Retail and Senior Managing Director, Invesco Ltd.; Director, Co-Chairman, Co-President and Co- Chief Executive Officer, Invesco Advisers, inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Director, Chief Executive Officer and President, Invesco Aim Advisors, Inc. and 1371 Preferred Inc. (holding company); Director, Chairman, Chief Executive Officer and President, Invesco Aim Management Group, Inc. (financial services holding company); Director, Co-Chairman, Co-President and Co-Chief Executive Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Director and President, INVESCO Funds Group, Inc. (registered investment adviser and registered transfer agent) and AIM GP Canada Inc. (general partner for limited partnerships); Director, Invesco Aim Distributors, Inc. (registered broker dealer); Director and Chairman, Invesco Aim Investment Services, Inc. (registered transfer agent) and INVESCO Distributors, Inc. (registered broker dealer); Director, President and Chairman, INVESCO Inc. (holding company) and Invesco Canada Holdings Inc. (holding company); Chief Executive Officer, AIM Trimark Corporate Class Inc. (corporate mutual fund company) and AIM Trimark Canada Fund Inc. (corporate mutual fund company); Director and Chief Executive Officer, Invesco Trimark Ltd./Invesco Trimark Ltèe (registered investment adviser and registered transfer agent) and Invesco Trimark Dealer Inc. (registered broker dealer); Trustee, President and Principal Executive Officer, The AIM Family of Funds® (other than AIM Treasurer’s Series Trust and Short-Term Investments Trust); Trustee and Executive Vice President, The AIM Family of Funds® (AIM Treasurer’s Series Trust and Short-Term Investments Trust only); and Manager, Invesco PowerShares Capital Management LLC	None
		Formerly: Manager, Invesco PowerShares Capital Management LLC; Director, Chief Executive Officer and President, Invesco Aim Advisors, Inc.; Director, Chairman, Chief Executive Officer and President, Invesco Aim Capital Management, Inc.; President, Invesco Trimark Dealer Inc. and Invesco Trimark Ltd./Invesco Trimark Ltèe; Director and President, AIM Trimark Corporate Class Inc. and AIM Trimark Canada Fund Inc.; Senior Managing Director, Invesco Holding Company Limited; Trustee and Executive Vice President, Tax-Free Investments Trust; Director and Chairman, Fund Management Company (former registered broker dealer); President and Principal Executive Officer, The AIM Family of Funds® (AIM Treasurer’s Series Trust, Short-Term Investments Trust and Tax-Free Investments Trust only); President, AIM Trimark Global Fund Inc. and AIM Trimark Canada Fund Inc.
Independent Trustees
Bruce L. Crockett — 1944 Trustee and Chair	1993	Chairman, Crockett Technology Associates (technology consulting company)	ACE Limited (insurance company); Captaris, Inc. (unified messaging provider); and Investment Company Institute
Bob R. Baker — 1936 Trustee	2004	Retired	None
Frank S. Bayley — 1939 Trustee	2001	Retired Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios)	None
James T. Bunch — 1942 Trustee	2004	Founder, Green, Manning & Bunch Ltd., (investment banking firm)	Board of Governors, Western Golf Association/Evans Scholars Foundation and Executive Committee, United States Golf Association
Albert R. Dowden — 1941 Trustee	2000	Director of a number of public and private business corporations, including the Boss Group, Ltd. (private investment and management); Reich & Tang Funds (registered investment company); and Homeowners of America Holding Corporation/Homeowners of America Insurance Company (property casualty company)	Board of Nature’s Sunshine Products, Inc.
		Formerly: Director, Continental Energy Services, LLC (oil and gas pipeline service); Director, CompuDyne Corporation (provider of product and services to the public security market) and Director, Annuity and Life Re (Holdings), Ltd. (reinsurance company); Director, President and Chief Executive Officer, Volvo Group North America, Inc.; Senior Vice President, AB Volvo; Director of various public and private corporations
Jack M. Fields — 1952 Trustee	1997	Chief Executive Officer, Twenty First Century Group, Inc. (government affairs company); and Owner and Chief Executive Officer, Dos Angelos Ranch, L.P. (cattle, hunting, corporate entertainment), Discovery Global Education Fund (non-profit) and Cross Timbers Quail Research Ranch (non-profit)	Administaff
		Formerly: Chief Executive Officer, Texana Timber LP (sustainable forestry company)
Carl Frischling — 1937 Trustee	1993	Partner, law firm of Kramer Levin Naftalis and Frankel LLP	Director, Reich & Tang Funds (16 portfolios)
Prema Mathai-Davis — 1950 Trustee	1998	Retired	None
Lewis F. Pennock — 1942 Trustee	1993	Partner, law firm of Pennock & Cooper	None
Larry Soll — 1942 Trustee	2004	Retired	None
Raymond Stickel, Jr. — 1944 Trustee	2005	Retired Formerly: Director, Mainstay VP Series Funds, Inc. (25 portfolios)	None

1	Mr. Flanagan is considered an interested person of the Trust because he is an officer of the adviser to the Trust, and an officer and a director of Invesco Ltd., ultimate parent of the adviser to the Trust.
2	Mr. Taylor is considered an interested person of the Trust because he is an officer and a director of the adviser to, and a director of the principal underwriter of, the Trust.

T-1

Trustees and Officers – (continued)

	Trustee and/
Name, Year of Birth and	or Officer	Principal Occupation(s)	Other Directorship(s)
Position(s) Held with the Trust	Since	During Past 5 Years	Held by Trustee
Other Officers
Russell C. Burk — 1958 Senior Vice President and Senior Officer	2005	Senior Vice President and Senior Officer of The AIM Family of Funds®	N/A
John M. Zerr — 1962 Senior Vice President, Chief Legal Officer and Secretary	2006	Director, Senior Vice President, Secretary and General Counsel, Invesco Aim Management Group, Inc., Senior Vice President, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Director, Senior Vice President and Secretary, Invesco Aim Distributors, Inc.; Director, Vice President and Secretary, Invesco Aim Investment Services, Inc. and INVESCO Distributors, Inc.; Director and Vice President, INVESCO Funds Group, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The AIM Family of Funds®; and Manager, Invesco PowerShares Capital Management LLC	N/A
		Formerly: Director, Senior Vice President, General Counsel and Secretary, Invesco Aim Advisors, Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco Aim Capital Management, Inc.; Chief Operating Officer and General Counsel, Liberty Ridge Capital, Inc. (an investment adviser); Vice President and Secretary, PBHG Funds (an investment company) and PBHG Insurance Series Fund (an investment company); Chief Operating Officer, General Counsel and Secretary, Old Mutual Investment Partners (a broker-dealer); General Counsel and Secretary, Old Mutual Fund Services (an administrator) and Old Mutual Shareholder Services (a shareholder servicing center); Executive Vice President, General Counsel and Secretary, Old Mutual Capital, Inc. (an investment adviser); and Vice President and Secretary, Old Mutual Advisors Funds (an investment company)
Lisa O. Brinkley — 1959 Vice President	2004	Global Compliance Director, Invesco Ltd.; Chief Compliance Officer, Invesco Aim Distributors, Inc. and Invesco Aim Investment Services, Inc.; and Vice President, The AIM Family of Funds® Formerly: Senior Vice President, Invesco Aim Management Group, Inc.; Senior Vice President and Chief Compliance Officer, Invesco Aim Advisors, Inc. and The AIM Family of Funds®; Vice President and Chief Compliance Officer, Invesco Aim Capital Management, Inc. and Invesco Aim Distributors, Inc.; Vice President, Invesco Aim Investment Services, Inc. and Fund Management Company	N/A
Kevin M. Carome — 1956 Vice President	2003	General Counsel, Secretary and Senior Managing Director, Invesco Ltd.; Director, Invesco Holding Company Limited and INVESCO Funds Group, Inc.; Director and Executive Vice President, IVZ, Inc., Invesco Group Services, Inc., Invesco North American Holdings, Inc. and Invesco Investments (Bermuda) Ltd.; Director and Secretary, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); and Vice President, The AIM Family of Funds®	N/A
		Formerly: Senior Managing Director and Secretary, Invesco North American Holdings, Inc.; Vice President and Secretary, IVZ, Inc. and Invesco Group Services, Inc.; Senior Managing Director and Secretary, Invesco Holding Company Limited; Director, Senior Vice President, Secretary and General Counsel, Invesco Aim Management Group, Inc. and Invesco Aim Advisors, Inc.; Senior Vice President, Invesco Aim Distributors, Inc.; Director, General Counsel and Vice President, Fund Management Company; Vice President, Invesco Aim Capital Management, Inc. and Invesco Aim Investment Services, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The AIM Family of Funds®; Director and Vice President, INVESCO Distributors, Inc.; and Chief Executive Officer and President, INVESCO Funds Group, Inc.
Sheri Morris — 1964 Vice President, Treasurer and Principal Financial Officer	1999	Vice President, Treasurer and Principal Financial Officer, The AIM Family of Funds®; and Vice President, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.) Formerly: Vice President, Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.; Assistant Vice President and Assistant Treasurer, The AIM Family of Funds® and Assistant Vice President, Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A
Karen Dunn Kelley — 1960 Vice President	1993	Head of Invesco’s World Wide Fixed Income and Cash Management Group; Senior Vice President, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Executive Vice President, Invesco Aim Distributors, Inc.; Senior Vice President, Invesco Aim Management Group, Inc.; and Director, Invesco Mortgage Capital Inc.; Vice President, The AIM Family of Funds® (other than AIM Treasurer’s Series Trust and Short-Term Investments Trust); and President and Principal Executive Officer, The AIM Family of Funds® (AIM Treasurer’s Series Trust and Short-Term Investments Trust only)	N/A
		Formerly: Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Director of Cash Management and Senior Vice President, Invesco Aim Advisors, Inc. and Invesco Aim Capital Management, Inc.; President and Principal Executive Officer, Tax-Free Investments Trust; Director and President, Fund Management Company; Chief Cash Management Officer, Director of Cash Management, Senior Vice President, and Managing Director, Invesco Aim Capital Management, Inc.; Director of Cash Management, Senior Vice President, and Vice President, Invesco Aim Advisors, Inc. and The AIM Family of Funds® (AIM Treasurer’s Series Trust, Short-Term Investments Trust and Tax-Free Investments Trust only)
Lance A. Rejsek — 1967 Anti-Money Laundering Compliance Officer	2005	Anti-Money Laundering Compliance Officer, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Invesco Aim Distributors, Inc., Invesco Aim Investment Services, Inc., and The AIM Family of Funds®	N/A
		Formerly: Anti-Money Laundering Compliance Officer, Fund Management Company, Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.
Todd L. Spillane — 1958 Chief Compliance Officer	2006	Senior Vice President, Invesco Aim Management Group, Inc.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Chief Compliance Officer, The AIM Family of Funds®, INVESCO Private Capital Investments, Inc. (holding company), Invesco Private Capital, Inc. (registered investment adviser) and Invesco Senior Secured Management, Inc. (registered investment adviser); Vice President, Invesco Aim Distributors, Inc. and Invesco Aim Investment Services, Inc.	N/A
		Formerly: Senior Vice President and Chief Compliance Officer, Invesco Aim Advisors, Inc. and Invesco Aim Capital Management, Inc.; Chief Compliance Officer, Invesco Global Asset Management (N.A.), Inc.; Vice President, Invesco Aim Capital Management, Inc. and Fund Management Company

The Statement of Additional Information of the Trust includes additional information about the Fund’s Trustees and is available upon request, without charge, by calling 1.800.959.4246. Please refer to the Fund’s prospectus for information on the Fund’s sub-advisers.

Office of the Fund	Investment Adviser	Distributor	Auditors
11 Greenway Plaza, Suite 100	Invesco Advisers, Inc.	Invesco Aim Distributors, Inc.	PricewaterhouseCoopers LLP
Houston, TX 77046-1173	1555 Peachtree Street, N.E.	11 Greenway Plaza, Suite 100	1201 Louisiana Street, Suite 2900
	Atlanta, GA 30309	Houston, TX 77046-1173	Houston, TX 77002-5678
Counsel to the Fund	Counsel to the	Transfer Agent	Custodian
Stradley Ronon Stevens & Young, LLP	Independent Trustees	Invesco Aim Investment Services, Inc.	State Street Bank and Trust Company
2600 One Commerce Square	Kramer, Levin, Naftalis & Frankel LLP	P.O. Box 4739	225 Franklin
Philadelphia, PA 19103	1177 Avenue of the Americas	Houston, TX 77210-4739	Boston, MA 02110-2801
	New York, NY 10036-2714

T-2

AIM V.I. Financial Services Fund
Annual Report to Shareholders n December 31, 2009

The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter-ends. For the second and fourth quarters, the lists appear in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The Fund’s Form N-Q filings are available on the SEC website, sec.gov. Copies of the Fund’s Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers for the Fund are 811-07452 and 033-57340. The Fund’s most recent portfolio holdings, as filed on Form N-Q, have also been made available to insurance companies issuing variable annuity contracts and variable life insurance policies (“variable products”) that invest in the Fund.

A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, from our Client Services department at 800 410 4246 or on the Invesco Aim website, invescoaim.com. On the home page, scroll down and click on Proxy Policy. The information is also available on the SEC website, sec.gov.

Information regarding how the Fund voted proxies related to its portfolio securities during the 12 months ended June 30, 2009, is available at our website, invescoaim.com. Click the About Us tab at the top of the home page; click Legal Information; and then click Proxy Voting Search. The information is also available on the SEC website, sec.gov.

Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Aim Distributors, Inc. is the U.S. distributor for Invesco Ltd.’s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd.

This report must be accompanied or preceded by a currently effective Fund prospectus and variable product prospectus, which contain more complete information, including sales charges and expenses. Investors should read each carefully before investing.

Invesco Aim Distributors, Inc.

NOT FDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEE

Management’s Discussion of Fund Performance

Performance summary

For the year ended December 31, 2009, and excluding variable product issuer charges, AIM V.I. Financial Services Fund performed essentially in line with the S&P 500 Index and Lipper VUF Financial Services Funds category average while outperforming the S&P 500 Financials Index.

     While many individual holdings in various financial industries contributed to the Fund’s performance, the underlying reason for our outperformance versus our style-specific index was the offensive position of the Fund, which drove performance as the sector recovered from lows reached early in the year.

     Your Fund’s long-term performance appears later in this report.

Fund vs. Indexes

Total returns, 12/31/08 to 12/31/09, excluding variable product issuer charges.

If variable product issuer charges were included, returns would be lower.

Series I Shares	27.43	%
Series II Shares	27.30
S&P 500 Index▼ (Broad Market Index)	26.47
S&P 500 Financials Index▼ (Style-Specific Index)	17.22
Lipper VUF Financial Services Funds Category Average▼ (Peer Group)	27.07

▼ Lipper Inc.

How we invest

We seek to create wealth for our shareholders by maintaining a long-term investment horizon and investing in two primary opportunities we believe have historically resulted in superior investment returns in the financials sector:

n	Financial companies trading at a significant discount to our estimate of intrinsic value† because of excessive short-term investor pessimism. Estimated intrinsic value† is a measure based primarily on the estimated future cash flows generated by the businesses.
n	Reasonably valued financial companies that demonstrate superior capital discipline by returning excess capital to shareholders in the form of dividends and share repurchases.

     We maintain a proprietary database of intrinsic value estimates and screen financial companies for those we deem to be of acceptable quality.

     Purchase candidates are subject to exhaustive fundamental analysis. We focus on the drivers of estimated intrinsic value such as normalized earnings power, marginal returns on economic equity (which adjusts for distortions present in accounting numbers) and sustainable growth. Additionally, we strive to understand a company’s ability and willingness to grow capital returned to shareholders in the future. Finally, we focus on quality, including competitive position, management and financial strength.

     The result is normally a 35- to 50-stock portfolio of investments that we believe are attractive from a valuation and/or a capital discipline perspective. In constructing a portfolio, we attempt to mitigate risk in multiple ways, including by diversifying holdings across industries and businesses that react in different ways to changes in interest rates and economic cycles.

     We believe a portfolio of undervalued and capital-disciplined quality financial companies that profitably grow cash flows over time provides the best opportunity for superior long-term investment results.

Market conditions and your Fund

The year 2009 was characterized by two dramatically different market environments. In the first few months of the year, equity markets declined steeply as credit markets froze and risk premiums rose dramatically in response to the global financial crisis. As central banks coordinated easing efforts and companies cut costs aggressively, access to funding improved and market valuations in both the credit and equity markets recovered from their March lows. The financials sector led the market during both periods — declining by almost 50%¹ from January 1 to March 9, and then rebounding by more than 100%¹ from March 10 to December 31. While the extreme strains caused by the financial crisis have abated, concerns about economic resilience remain, and valuations remain at appealing levels. Our investment results can be lumpy during periods like this, but historically these types of markets have yielded attractive opportunities for future capital growth.

     In this environment, the Fund posted gains, outperforming its style-specific index. While many individual holdings in various financial industries contributed to the Fund’s performance, the underlying reason for our outperformance was the offensive position of the Fund, which drove performance as the sector recovered from its March 2009 lows.

Portfolio Composition

By sector
Financials		84.2	%
Information Technology		7.2
Health Care		3.8
Consumer Discretionary		2.0
Money Market Funds Plus Other Assets Less Liabilities		2.8
Top 10 Equity Holdings*
1. Capital One Financial Corp.		7.2	%
2. XL Capital Ltd.-Class A		6.7
3. JPMorgan Chase & Co.		6.6
4. American Express Co.		5.9
5. Bank of America Corp.		5.1
6. SLM Corp.		4.7
7. Moody’s Corp.		4.6
8. Fifth Third Bancorp		4.6
9. Legg Mason, Inc.		4.0
10. UnitedHealth Group Inc.		3.8
Total Net Assets	$65.5 million
Total Number of Holdings*		37

The Fund’s holdings are subject to change, and there is no assurance that the Fund will continue to hold any particular security.

* Excluding money market fund holdings.

AIM V.I. Financial Services Fund

     The largest contributors to performance were XL Capital and Morgan Stanley. After declining significantly in 2008 due to capital and credit-related issues, specialty insurance provider XL Capital’s stock rebounded from its early-2009 lows, gaining nearly 400% during the year as investor concerns abated from what, in retrospect, were excessively pessimistic views. We continue to believe the company is undervalued despite its stock’s significant rebound. Morgan Stanley’s stock rose by over 75% during the year. Investors reacted favorably to the announcement of a joint venture between the company and Citigroup in which Morgan Stanley bought Citi’s Smith Barney unit and combined it with its own global wealth management group. The new joint venture, called Morgan Stanley Smith Barney, is the industry’s leading wealth management business and was an early indicator of a rejuvenated strategic direction at the beleaguered but venerable investment bank.

     The largest detractors from Fund performance were regional bank Zions Bancorporation and Citigroup. Citigroup’s stock fell by more than 45% during the year. In February, Citigroup took the dramatic step of recapitalizing the company via a preferred-for-common exchange. The action bolstered Citigroup’s capital position to among the strongest in the world, but diluted our estimate of per-share intrinsic value severely.

     Shares of Zions Bancorporation, a regional banking franchise we admire, also fell during the year as investor worries shifted to potential commercial real estate loan losses and the effect such losses could have on capital adequacy. We continued to hold Zions Bancorporation at year end because we believed its depressed stock price represented an attractive value opportunity, even as we expected the company to further bolster regulatory capital.

     We believe many stressed financial companies have now raised enough capital to handle credit losses that are widely expected to be severe. Economies around the world are showing signs of stabilization or recovery. Financial stocks have rebounded dramatically from extremely depressed levels in March 2009. Despite strong stock performance in the sector, we continue to see opportunities given historical low valuation levels and unusually wide valuation differences within the sector. While regulatory and political developments will grab headlines in 2010, and some changes will prove important, we believe the path and robustness of economic recovery will be the ultimate determinant of financial sector stock performance. We expect financial stocks will remain volatile as the economy works toward recovery and credit losses ultimately peak, the timing of which is impossible to pinpoint.

     Fund turnover increased during the year, and investors in the Fund should expect additional turnover of portfolio holdings as we continue to capitalize on this valuation opportunity, which is among the broadest we have seen in our careers.

     Markets experienced a strong recovery during 2009, and the Fund outperformed its style-specific index. Regardless of the macro economic environment, we remain focused on identifying financial companies that we believe are undervalued and that exhibit capital discipline.

     As always, we would like to caution investors against making investment decisions based on short-term performance. We recommend that you consult a financial adviser to discuss your individual financial program.

     Thank you for your investment in AIM V.I. Financial Services Fund and for sharing our long-term investment horizon.

†	Managers believe intrinsic value represents the inherent business value of portfolio holdings during a two- to three-year investment horizon based on their estimates of future cash flow. Intrinsic value calculations are estimates and, as a result, market price may never reflect intrinsic value estimates, especially for an entire portfolio.
1	Lipper Inc.

The views and opinions expressed in management’s discussion of Fund performance are those of Invesco Advisers, Inc. These views and opinions are subject to change at any time based on factors such as market and economic conditions. These views and opinions may not be relied upon as investment advice or recommendations, or as 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 Invesco Advisers, Inc. 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.

See important Fund and index disclosures later in this report.

Michael Simon

Chartered Financial Analyst, senior portfolio manager, is lead manager of AIM V.I. Financial Services Fund. He began his investment career in 1989 and joined Invesco Aim in 2001. Mr. Simon earned a B.B.A. in finance from Texas Christian University and an M.B.A. from the University of Chicago.

Meggan Walsh

Chartered Financial Analyst, senior portfolio manager, is manager of AIM V.I. Financial Services Fund. She began her investment career in 1987 and joined Invesco Aim in 1991. Ms. Walsh earned a B.S. in finance from the University of Maryland and an M.B.A. from Loyola University Maryland.

Assisted by the Financial Services Team

AIM V.I. Financial Services Fund

Your Fund’s Long-Term Performance

Results of a $10,000 Investment — Oldest Share Class since Inception
Fund data from 9/20/99, index data from 9/30/99

1 Lipper Inc.

Past performance cannot guarantee comparable future results.

     This chart, which is a logarithmic chart, presents the fluctuations in the value of the Fund and its indexes. We believe that a logarithmic chart is more effective than other types of charts in illustrating changes in value during the early years shown in the chart. The vertical axis, the one that indicates the dollar value of an investment, is constructed with each segment representing a percent change in the value of the investment. In this chart, each segment represents a doubling, or 100% change, in the value of the investment. In other words, the space between $2,000 and $4,000 is the same size as the space between $4,000 and $8,000, and so on.

Average Annual Total Returns
As of 12/31/09

Series I Shares
Inception (9/20/99)	-2.86	%
10 Years	-3.95
5 Years	-13.09
1 Year	27.43
Series II Shares
10 Years	-4.17	%
5 Years	-13.28
1 Year	27.30

Series II shares’ inception date is April 30, 2004. Returns since that date are historical. All other returns are the blended returns of the historical performance of Series II shares since their inception and the restated historical performance of Series I shares (for periods prior to inception of Series II shares) adjusted to reflect the Rule 12b-1 fees applicable to Series II shares. The inception date of Series I shares is September 20, 1999. The performance of the Fund’s Series I and Series II share classes will differ primarily due to different class expenses.

     The performance data quoted represent past performance and cannot guarantee comparable future results; current performance may be lower or higher. Please contact your variable product issuer or financial adviser for the most recent month-end variable product performance. Performance figures reflect Fund expenses, reinvested distributions and changes in net asset value. Investment return and principal value will fluctuate so that you may have a gain or loss when you sell shares.

     The net annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 1.23% and 1.45%, respectively.^1,2 The total annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 1.24% and 1.49%, respectively. The expense ratios presented above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

     AIM V.I. Financial Services Fund, a series portfolio of AIM Variable Insurance Funds, is currently offered through insurance companies issuing variable products. You cannot purchase shares of the Fund directly. Performance figures given represent the Fund and are not intended to reflect actual variable product values. They do not reflect sales charges, expenses and fees assessed in connection with a variable product. Sales charges, expenses and fees, which are determined by the variable product issuers, will vary and will lower the total return.

     The most recent month-end performance data at the Fund level, excluding variable product charges, is available on the Invesco Aim automated information line, 866 702 4402. As mentioned above, for the most recent month-end performance including variable product charges, please contact your variable product issuer or financial adviser.

1	Total annual operating expenses less any contractual fee waivers and/or expense reimbursements by the adviser in effect through at least April 30, 2011. See current prospectus for more information.
2	Total annual operating expenses less any contractual fee waivers and/or expense reimbursements by the adviser in effect through at least June 30, 2010. See current prospectus for more information.

AIM V.I. Financial Services Fund

AIM V.I. Financial Services Fund’s investment objective is capital growth.

n Unless otherwise stated, information presented in this report is as of December 31, 2009, and is based on total net assets.

n Unless otherwise noted, all data provided by Invesco.

Principal risks of investing in the Fund

Prices of equity securities change in response to many factors, including the historical and prospective earnings of the issuer, the value of its assets, general economic conditions, interest rates, investor perceptions and market liquidity.

     The financial services sector is subject to extensive government regulation, which may change frequently. The profitability of businesses in this sector depends heavily on the availability and cost of money and may fluctuate significantly in response to changes to interest rates and general economic conditions.

     Foreign securities have additional risks, including exchange rate changes, political and economic upheaval, relative lack of information, relatively low market liquidity, and the potential lack of strict financial and accounting controls and standards.

     Since a large percentage of the Fund’s assets may be invested in securities of a limited number of companies, each investment has a greater effect on the Fund’s overall performance, and any change in the value of those securities could significantly affect the value of your investment in the Fund.

     There is no guarantee that the investment techniques and risk analysis used by the Fund’s portfolio managers will produce the desired results.

     The prices of securities held by the Fund may decline in response to market risks.

     Nondiversification increases the risk that the value of the Fund’s shares may vary more widely, and the Fund may be subject to greater investment and credit risk than if it invested more broadly.

     The Fund’s investments are concentrated in a comparatively narrow segment of the economy. Consequently, the Fund may tend to be more volatile than other mutual funds, and the value of the Fund’s investments may tend to rise and fall more rapidly.

About indexes used in this report

The S&P 500^® Index is an unmanaged index considered representative of the U.S. stock market.

     The S&P 500 Financials Index is an unmanaged index considered representative of the financial market.

     The Lipper VUF Financial Services Funds Category Average represents an average of all of the variable insurance underlying funds in the Lipper Financial Services Funds category.

     The Fund is not managed to track the performance of any particular index, including the indexes defined here, and consequently, the performance of the Fund may deviate significantly from the performance of the indexes.

     A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group reflects fund expenses; performance of a market index does not.

Other information

The Chartered Financial Analyst^® (CFA^®) designation is globally recognized and attests to a charterholder’s success in a rigorous and comprehensive study program in the field of investment management and research analysis.

     The returns shown in management’s discussion of Fund performance are based on net asset values calculated for shareholder transactions. Generally accepted accounting principles require adjustments to be made to the net assets of the Fund at period end for financial reporting purposes, and as such, the net asset values for shareholder transactions and the returns based on those net asset values may differ from the net asset values and returns reported in the Financial Highlights. Additionally, the returns and net asset values shown throughout this report are at the Fund level only and do not include variable product issuer charges. If such charges were included, the total returns would be lower.

     Industry classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s.

AIM V.I. Financial Services Fund

Schedule of Investments^(a)

December 31, 2009

	Shares		Value
Common Stocks & Other Equity Interests–97.20%
Asset Management & Custody Banks–11.87%
Blackstone Group L.P. (The)		50,865	$	667,349
Federated Investors, Inc.–Class B		82,527		2,269,493
Legg Mason, Inc.		86,258		2,601,541
State Street Corp.		51,334		2,235,082
				7,773,465
Consumer Finance–18.10%
American Express Co.		96,048		3,891,865
AmeriCredit Corp.(b)		10,525		200,396
Capital One Financial Corp.		122,935		4,713,328
SLM Corp.(b)		270,291		3,046,179
				11,851,768
Data Processing & Outsourced Services–7.15%
Alliance Data Systems Corp.(b)		27,415		1,770,735
Automatic Data Processing, Inc.		38,417		1,645,016
Heartland Payment Systems, Inc.		55,265		725,630
VeriFone Holdings, Inc.(b)		15,811		258,984
Western Union Co. (The)		14,933		281,487
				4,681,852
Diversified Banks–0.21%
U.S. Bancorp		6,016		135,420
Diversified Capital Markets–2.67%
UBS AG (Switzerland)(b)		112,838		1,750,117
Insurance Brokers–4.12%
Marsh & McLennan Cos., Inc.		98,797		2,181,438
National Financial Partners Corp.(b)		63,498		513,699
				2,695,137
Investment Banking & Brokerage–6.86%
FBR Capital Markets Corp.(b)		309,451		1,912,407
Goldman Sachs Group, Inc. (The)		1,777		300,029
Morgan Stanley		77,092		2,281,923
				4,494,359
Life & Health Insurance–2.27%
Prudential Financial, Inc.		8,774		436,594
StanCorp Financial Group, Inc.		26,276		1,051,566
				1,488,160
Managed Health Care–3.82%
UnitedHealth Group Inc.		82,013		2,499,756
Other Diversified Financial Services–14.53%
Bank of America Corp.		221,342		3,333,410
Citigroup Inc.		556,283		1,841,297
JPMorgan Chase & Co.		104,159		4,340,306
				9,515,013
Property & Casualty Insurance–7.04%
Allstate Corp. (The)		7,809		234,582
XL Capital Ltd.–Class A		238,512		4,371,925
				4,606,507
Real Estate Services–0.34%
Jones Lang LaSalle Inc.		3,708		223,963
Regional Banks–9.53%
Fifth Third Bancorp		307,578		2,998,886
First Horizon National Corp.(b)		10,421		139,637
SunTrust Banks, Inc.		91,442		1,855,358
Zions Bancorp.		97,377		1,249,347
				6,243,228
Reinsurance–1.97%
Transatlantic Holdings, Inc.		24,779		1,291,234
Specialized Consumer Services–2.00%
H&R Block, Inc.		57,934		1,310,467
Specialized Finance–4.64%
Moody’s Corp.		113,239		3,034,805
Thrifts & Mortgage Finance–0.08%
Ocwen Financial Corp.(b)		5,772		55,238
Total Common Stocks & Other Equity Interests (Cost $79,787,752)				63,650,489
Money Market Funds–2.24%
Liquid Assets Portfolio–Institutional Class(c)		732,101		732,101
Premier Portfolio–Institutional Class(c)		732,101		732,101
Total Money Market Funds (Cost $1,464,202)				1,464,202
TOTAL INVESTMENTS–99.44% (Cost $81,251,954)				65,114,691
OTHER ASSETS LESS LIABILITIES–0.56%				366,180
NET ASSETS–100.00%			$	65,480,871

Notes to Schedule of Investments:

(a)	Industry and/or sector classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s.
(b)	Non-income producing security.
(c)	The money market fund and the Fund are affiliated by having the same investment adviser.

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

AIM V.I. Financial Services Fund

Statement of Assets and Liabilities

December 31, 2009

Assets:
Investments, at value (Cost $79,787,752)	$	63,650,489
Investments in affiliated money market funds, at value and cost		1,464,202
Total investments, at value (Cost $81,251,954)		65,114,691
Receivables for:
Investments sold		443,720
Fund shares sold		122,192
Dividends		35,472
Investment for trustee deferred compensation and retirement plans		11,527
Total assets		65,727,602
Liabilities:
Payables for:
Investments purchased		25,681
Fund shares reacquired		86,278
Amount due custodian		24,366
Accrued fees to affiliates		54,201
Accrued other operating expenses		32,685
Trustee deferred compensation and retirement plans		23,520
Total liabilities		246,731
Net assets applicable to shares outstanding	$	65,480,871
Net assets consist of:
Shares of beneficial interest	$	115,265,517
Undistributed net investment income		57,948
Undistributed net realized gain (loss)		(33,705,331	)
Unrealized appreciation (depreciation)		(16,137,263	)
	$	65,480,871
Net Assets:
Series I	$	57,620,257
Series II	$	7,860,614
Shares outstanding, $0.001 par value per share, unlimited number of shares authorized:
Series I		11,289,433
Series II		1,555,995
Series I:
Net asset value per share	$	5.10
Series II:
Net asset value per share	$	5.05

Statement of Operations

For the year ended December 31, 2009

Investment income:
Dividends	$	745,974
Dividends from affiliated money market funds		14,679
Total investment income		760,653
Expenses:
Advisory fees		394,539
Administrative services fees		179,985
Custodian fees		7,733
Distribution fees — Series II		14,313
Transfer agent fees		19,251
Trustees’ and officers’ fees and benefits		21,444
Professional services fees		39,922
Other		8,154
Total expenses		685,341
Less: Fees waived and expenses reimbursed		(8,587	)
Net expenses		676,754
Net investment income		83,899
Realized and unrealized gain (loss) from:
Net realized gain (loss) from investment securities		(7,426,734	)
Change in net unrealized appreciation of investment securities		22,907,979
Net realized and unrealized gain		15,481,245
Net increase in net assets resulting from operations	$	15,565,144

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

AIM V.I. Financial Services Fund

Statement of Changes in Net Assets

For the years ended December 31, 2009 and 2008

	2009			2008
Operations:
Net investment income	$	83,899		$	1,865,196
Net realized gain (loss)		(7,426,734	)		(25,097,989	)
Change in net unrealized appreciation (depreciation)		22,907,979			(35,661,911	)
Net increase (decrease) in net assets resulting from operations		15,565,144			(58,894,704	)
Distributions to shareholders from net investment income:
Series I		(1,643,368	)		(1,840,747	)
Series II		(217,704	)		(162,993	)
Total distributions from net investment income		(1,861,072	)		(2,003,740	)
Distributions to shareholders from net realized gains:
Series I		—			(5,303,718	)
Series II		—			(492,299	)
Total distributions from net realized gains		—			(5,796,017	)
Share transactions-net:
Series I		6,150,080			16,386,023
Series II		2,336,966			4,765,984
Net increase in net assets resulting from share transactions		8,487,046			21,152,007
Net increase (decrease) in net assets		22,191,118			(45,542,454	)
Net assets:
Beginning of year		43,289,753			88,832,207
End of year (includes undistributed net investment income of $57,948 and $1,835,351, respectively)	$	65,480,871		$	43,289,753

Notes to Financial Statements

December 31, 2009

NOTE 1—Significant Accounting Policies

AIM V.I. Financial Services Fund (the “Fund”) is a series portfolio of AIM Variable Insurance Funds (the “Trust”). The Trust is a Delaware statutory trust registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end series management investment company consisting of twenty-one separate portfolios, (each constituting a “Fund”). The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Matters affecting each Fund or class will be voted on exclusively by the shareholders of such Fund or class. Current Securities and Exchange Commission (“SEC”) guidance, however, requires participating insurance companies offering separate accounts to vote shares proportionally in accordance with the instructions of the contract owners whose investments are funded by shares of each Fund or class.

  The Fund’s investment objective is capital growth.

  The Fund currently offers two classes of shares, Series I and Series II, both of which are offered to insurance company separate accounts funding variable annuity contracts and variable life insurance policies (“variable products”).

  The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements.

A.

Security Valuations — Securities, including restricted securities, are valued according to the following policy.

A security listed or traded on an exchange (except convertible bonds) is valued at its last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales or official closing price on a particular day, the security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based on prices furnished by independent pricing services or market makers. When such securities are valued by an independent pricing service they may be considered fair valued. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean between the last bid and ask prices from the exchange on which they are principally traded. Options not listed on an exchange are valued by an independent source at the mean between the last bid and ask prices. For purposes of determining net asset value per share, futures and option contracts generally are valued 15 minutes after the close of the customary trading session of the New York Stock Exchange (“NYSE”).

AIM V.I. Financial Services Fund

	Investments in open-end and closed-end registered investment companies that do not trade on an exchange are valued at the end of day net asset value per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded.
	Debt obligations (including convertible bonds) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution-size trading in similar groups of securities, developments related to specific securities, dividend rate, yield, quality, type of issue, coupon rate, maturity, individual trading characteristics and other market data. Short-term obligations, including commercial paper, having 60 days or less to maturity are recorded at amortized cost which approximates value. Debt securities are subject to interest rate and credit risks. In addition, all debt securities involve some risk of default with respect to interest and/or principal payments.
	Foreign securities (including foreign exchange contracts) are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the NYSE. If market quotations are available and reliable for foreign exchange traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that are significant and make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economical upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
	Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities and Corporate Loans. The mean between the last bid and asked prices may be used to value debt obligations other than Corporate Loans.
	Securities for which market quotations are not readily available or are unreliable are valued at fair value as determined in good faith by or under the supervision of the Trust’s officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a security’s fair value.
	Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
B.	Securities Transactions and Investment Income — Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income is recorded on the accrual basis from settlement date. Dividend income is recorded on the ex-dividend date.
	The Fund may periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain/loss for investments no longer held and as unrealized gain/loss for investments still held.
	Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the realized and unrealized net gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the Fund’s net asset value and, accordingly, they reduce the Fund’s total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in the Statement of Operations and Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the adviser.
	The Fund allocates income and realized and unrealized capital gains and losses to a class based on the relative net assets of each class.
C.	Country Determination — For the purposes of making investment selection decisions and presentation in the Schedule of Investments, the investment adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuer’s securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted.
D.	Distributions — Distributions from income and net realized capital gain, if any, are generally paid to separate accounts of participating insurance companies annually and recorded on ex-dividend date.
E.	Federal Income Taxes — The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code necessary to qualify as a regulated investment company and to distribute substantially all of the Fund’s taxable earnings to shareholders. As such, the Fund will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements.

AIM V.I. Financial Services Fund

	The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.
F.	Expenses — Fees provided for under the Rule 12b-1 plan of a particular class of the Fund and which are directly attributable to that class are charged to the operations of such class. All other expenses are allocated among the classes based on relative net assets.
G.	Accounting Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print, which is generally 45 days from the period-end date.
H.	Indemnifications — Under the Trust’s organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Fund’s servicing agreements that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote.
I.	Other Risks — The Fund’s investments are concentrated in a comparatively narrow segment of the economy. Consequently, the Fund may tend to be more volatile than other mutual funds, and the value of the Fund’s investments may tend to rise and fall more rapidly.
	The financial services sector is subject to extensive government regulation, which may change frequently. The profitability of businesses in this sector depends heavily on the availability and cost of money and may fluctuate significantly in response to changes to interest rates and general economic conditions.

NOTE 2—Advisory Fees and Other Fees Paid to Affiliates

The Trust has entered into a master investment advisory agreement with Invesco Advisers, Inc. (the “Adviser” or “Invesco”). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Adviser based on the annual rate of the Fund’s average daily net assets as follows:

Average Net Assets	Rate
First $250 million		0	.75%
Next $250 million		0	.74%
Next $500 million		0	.73%
Next $1.5 billion		0	.72%
Next $2.5 billion		0	.71%
Next $2.5 billion		0	.70%
Next $2.5 billion		0	.69%
Over $10 billion		0	.68%

  Under the terms of a master sub-advisory agreement approved by shareholders of the Funds between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Trimark Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Funds, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide discretionary investment management services to each Fund based on the percentage of assets allocated to such Sub-Adviser(s).

  On December 31, 2009, Invesco Advisors, Inc., Invesco Capital Management, Inc., Invesco Private Asset Management, Inc. and Invesco Global Asset Management (N.A.), Inc. merged into Invesco Institutional (N.A.), Inc. and the consolidated adviser firm was renamed Invesco Advisers, Inc.

  The Adviser has contractually agreed to waive advisory fees and/or reimburse expenses of all shares to the extent necessary to limit total annual fund operating expenses after fee waiver and/or expense reimbursements (excluding certain items discussed below) of Series I shares to 1.30% and Series II shares to 1.45% of average daily net assets, through at least April 30, 2011. In determining the Adviser’s obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the total annual fund operating expenses after fee waiver and/or expense reimbursements to exceed the numbers reflected above: (1) interest; (2) taxes; (3) dividend expense on short sales; (4) extraordinary items or non-routine items; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset agreement. The Board of Trustees or Invesco may terminate the fee waiver agreement at any time.

  Further, the Adviser has contractually agreed, through at least June 30, 2010, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash (excluding investments of cash collateral from securities lending) in such affiliated money market funds.

  For the year ended December 31, 2009, the Adviser waived advisory fees of $4,171 and reimbursed class level expenses of $4,416 of Series II shares.

  At the request of the Trustees of the Trust, Invesco Ltd. agreed to reimburse expenses incurred by the Fund in connection with market timing matters in the AIM Funds, which may include legal, audit, shareholder reporting, communications and trustee expenses. For the year ended December 31, 2009, Invesco Ltd. did not reimburse any expenses.

  The Trust has entered into a master administrative services agreement with Invesco pursuant to which the Fund has agreed to pay Invesco a fee for costs incurred in providing accounting services and fund administrative services to the Fund and to reimburse Invesco for administrative services fees paid to insurance companies that have agreed to provide services to the participants of separate accounts. These administrative services provided by the insurance

AIM V.I. Financial Services Fund

companies may include, among other things: the printing of prospectuses, financial reports and proxy statements and the delivery of the same to existing participants; the maintenance of master accounts; the facilitation of purchases and redemptions requested by the participants; and the servicing of participants’ accounts. Pursuant to such agreement, for the year ended December 31, 2009, Invesco was paid $50,000 for accounting and fund administrative services and reimbursed $129,985 for services provided by insurance companies.

  The Trust has entered into a transfer agency and service agreement with Invesco Investment Services, Inc. (“IAIS”) pursuant to which the Fund has agreed to pay IAIS a fee for providing transfer agency and shareholder services to the Fund and reimburse IAIS for certain expenses incurred by IAIS in the course of providing such services. For the year ended December 31, 2009, expenses incurred under the agreement are shown in the Statement of Operations as transfer agent fees.

  The Trust has entered into a master distribution agreement with Invesco Distributors, Inc. (“IADI”) to serve as the distributor for the Fund. The Trust has adopted a plan pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund’s Series II shares (the “Plan”). The Fund, pursuant to the Plan, pays IADI compensation at the annual rate of 0.25% of the Fund’s average daily net assets of Series II shares. Of the Plan payments, up to 0.25% of the average daily net assets of the Series II shares may be paid to insurance companies who furnish continuing personal shareholder services to customers who purchase and own Series II shares of the Fund. For the year ended December 31, 2009, expenses incurred under the Plan are detailed in the Statement of Operations as distribution fees.

  Certain officers and trustees of the Trust are officers and directors of Invesco, IAIS and/or IADI.

NOTE 3—Additional Valuation Information

Generally Accepted Accounting Principles (“GAAP”) defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3) generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment’s assigned level:

Level 1 —	Prices are determined using quoted prices in an active market for identical assets.
Level 2 —	Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk and others.
Level 3 —	Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information.

  The following is a summary of the tiered valuation input levels, as of December 31, 2009. The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.

	Level 1		Level 2		Level 3		Total
Equity Securities	$	65,114,691	$	—	$	—	$	65,114,691

NOTE 4—Trustees’ and Officers’ Fees and Benefits

“Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and “Trustees’ and Officers’ Fees and Benefits” also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various AIM Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees are eligible to participate in a retirement plan that provides for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former Trustees who also participate in a retirement plan and receive benefits under such plan. “Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund.

  During the year ended December 31, 2009, the Fund paid legal fees of $2,874 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A member of that firm is a Trustee of the Trust.

NOTE 5—Cash Balances

The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with The State Street Bank and Trust Company, the custodian bank. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (i) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (ii) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.

AIM V.I. Financial Services Fund

NOTE 6—Distributions to Beneficial Owners

Tax Character of Distributions to Shareholders Paid During the Years Ended December 31, 2009 and 2008:

	2009		2008
Ordinary income	$	1,861,072	$	2,252,871
Long-term capital gain		—		5,546,886
Total distributions	$	1,861,072	$	7,799,757

Tax Components of Net Assets at Period-End:

	2009
Undistributed ordinary income	$	77,707
Net unrealized appreciation (depreciation)-investments		(19,575,155	)
Temporary book/tax differences		(23,224	)
Capital loss carryforward		(30,263,974	)
Shares of beneficial interest		115,265,517
Total net assets	$	65,480,871

  The difference between book-basis and tax-basis unrealized appreciation (depreciation) is due to differences in the timing of recognition of gains and losses on investments for tax and book purposes. The Fund’s net unrealized appreciation (depreciation) difference is attributable primarily to wash sales and partnership transactions.

  The temporary book/tax differences are a result of timing differences between book and tax recognition of income and/or expenses. The Fund’s temporary book/tax differences are the result of the trustee deferral of compensation and retirement plan benefits.

  Capital loss carryforward is calculated and reported as of a specific date. Results of transactions and other activity after that date may affect the amount of capital loss carryforward actually available for the Fund to utilize. The ability to utilize capital loss carryforward in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.

  The Fund has a capital loss carryforward as of December 31, 2009 which expires as follows:

	Capital Loss
Expiration	Carryforward*
December 31, 2016	$	22,458,450
December 31, 2017		7,805,524
Total capital loss carryforward	$	30,263,974

*  Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code.

NOTE 7—Investment Securities

The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the year ended December 31, 2009 was $17,118,905 and $10,940,471, respectively. Cost of investments on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed Federal income tax reporting period-end.

Unrealized Appreciation (Depreciation) of Investment Securities on a Tax Basis
Aggregate unrealized appreciation of investment securities	$	5,718,216
Aggregate unrealized (depreciation) of investment securities		(25,293,371	)
Net unrealized appreciation (depreciation) of investment securities	$	(19,575,155	)
Cost of investments for tax purposes is $84,689,846.

NOTE 8—Reclassification of Permanent Differences

Primarily as a result of differing book/tax treatment of partnership transactions, on December 31, 2009, undistributed net investment income was decreased by $230 and undistributed net realized gain (loss) was increased by $230. This reclassification had no effect on the net assets of the Fund.

AIM V.I. Financial Services Fund

NOTE 9—Share Information

	Summary of Share Activity
	Year ended						Year ended
	December 31, 2009(a)						December 31, 2008
	Shares			Amount			Shares			Amount
Sold:
Series I		6,175,150		$	25,003,515			4,741,184		$	41,508,337
Series II		825,270			3,236,356			635,748			5,276,073
Issued as reinvestment of dividends:
Series I		324,776			1,643,368			1,609,114			7,144,465
Series II		43,454			217,704			148,930			655,292
Reacquired:
Series I		(4,778,335	)		(20,496,803	)		(3,725,544	)		(32,266,779	)
Series II		(260,764	)		(1,117,094	)		(139,755	)		(1,165,381	)
Net increase in share activity		2,329,551		$	8,487,046			3,269,677		$	21,152,007

^(a) There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 77% of the outstanding shares of the Fund. The Fund and the Fund’s principal underwriter or adviser, are parties to participation agreements with these entities whereby these entities sell units of interest in separate accounts funding variable products that are invested in the Fund. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and or Invesco affiliates including but not limited to services such as, securities brokerage, third party record keeping and account servicing and administrative services. The Trust has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially.

AIM V.I. Financial Services Fund

NOTE 10—Financial Highlights

The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.

																											Ratio of			Ratio of
																											expenses			expenses
					Net gains																						to average			to average net			Ratio of net
	Net asset				(losses) on						Dividends			Distributions													net assets			assets without			investment
	value,		Net		securities (both			Total from			from net			from net						Net asset					Net assets,		with fee waivers			fee waivers			income (loss)
	beginning		investment		realized and			investment			investment			realized			Total			value, end		Total			end of period		and/or expenses			and/or expenses			to average			Portfolio
	of period		income(a)		unrealized)			operations			income			gains			Distributions			of period		Return(b)			(000s omitted)		absorbed			absorbed			net assets			turnover(c)
Series I
Year ended 12/31/09	$	4.12	$	0.01	$	1.12		$	1.13		$	(0.15	)	$	—		$	(0.15	)	$	5.10		27.43	%	$	57,620		1.27	%(d)		1.28	%(d)		0.18	%(d)		22	%
Year ended 12/31/08		12.26		0.24		(7.46	)		(7.22	)		(0.24	)		(0.68	)		(0.92	)		4.12		(59.44	)		39,421		1.22			1.23			2.71			47
Year ended 12/31/07		17.41		0.27		(4.04	)		(3.77	)		(0.29	)		(1.09	)		(1.38	)		12.26		(22.22	)		85,144		1.11			1.11			1.61			9
Year ended 12/31/06		15.26		0.23		2.28			2.51			(0.26	)		(0.10	)		(0.36	)		17.41		16.52			146,092		1.12			1.12			1.44			14
Year ended 12/31/05		14.61		0.19		0.66			0.85			(0.20	)		—			(0.20	)		15.26		5.84			141,241		1.12			1.12			1.30			22
Series II
Year ended 12/31/09		4.08		0.00		1.11			1.11			(0.14	)		—			(0.14	)		5.05		27.30			7,861		1.44	(d)		1.53	(d)		0.01	(d)		22
Year ended 12/31/08		12.17		0.21		(7.39	)		(7.18	)		(0.23	)		(0.68	)		(0.91	)		4.08		(59.56	)		3,869		1.44			1.48			2.49			47
Year ended 12/31/07		17.33		0.22		(4.00	)		(3.78	)		(0.29	)		(1.09	)		(1.38	)		12.17		(22.39	)		3,688		1.36			1.36			1.36			9
Year ended 12/31/06		15.23		0.20		2.26			2.46			(0.26	)		(0.10	)		(0.36	)		17.33		16.22			1,664		1.37			1.37			1.19			14
Year ended 12/31/05		14.59		0.15		0.67			0.82			(0.18	)		—			(0.18	)		15.23		5.61			11		1.37			1.37			1.05			22

(a)	Calculated using average shares outstanding.
(b)	Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Total returns do not reflect charges assessed in connection with a variable product, which if included would reduce total returns.
(c)	Portfolio turnover is calculated at the fund level and it is not annualized for periods more than one year, if applicable.
(d)	Ratios are based on average daily net assets (000’s omitted) of $46,879 and $5,725 for Series I and Series II, shares, respectively.

AIM V.I. Financial Services Fund

Report of Independent Registered Public Accounting Firm

To the Board of Trustees of AIM Variable Insurance Funds

and Shareholders of AIM V.I. Financial Services Fund:

In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of AIM V.I. Financial Services Fund, (one of the funds constituting AIM Variable Insurance Funds, hereafter referred to as the “Fund”) at December 31, 2009, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at December 31, 2009 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.

PRICEWATERHOUSECOOPERS LLP

February 10, 2010

Houston, Texas

AIM V.I. Financial Services Fund

Calculating your ongoing Fund expenses

Example

As a shareholder of the Fund, you incur ongoing costs, including management fees; distribution and/or service fees (12b-1); and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period July 1, 2009, through December 31, 2009.

  The actual and hypothetical expenses in the examples below do not represent the effect of any fees or other expenses assessed in connection with a variable product; if they did, the expenses shown would be higher while the ending account values shown would be lower.

Actual expenses

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

Hypothetical example for comparison purposes

The table below also provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return.

  The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

  Please note that the expenses shown in the table are meant to highlight your ongoing costs. Therefore, the hypothetical information is useful in comparing ongoing costs, and will not help you determine the relative total costs of owning different funds.

							HYPOTHETICAL
							(5% annual return before
			ACTUAL				expenses)
	Beginning		Ending		Expenses		Ending		Expenses		Annualized
	Account Value		Account Value		Paid During		Account Value		Paid During		Expense
Class	(07/01/09)		(12/31/09)1		Period2		(12/31/09)		Period2		Ratio
Series I	$	1,000.00	$	1,253.00	$	7.10	$	1,018.90	$	6.36		1.25	%
Series II		1,000.00		1,251.50		8.17		1,017.95		7.32		1.44

1	The actual ending account value is based on the actual total return of the Fund for the period July 1, 2009 through December 31, 2009, after actual expenses and will differ from the hypothetical ending account value which is based on the Fund’s expense ratio and a hypothetical annual return of 5% before expenses.
2	Expenses are equal to the Fund’s annualized expense ratio as indicated above multiplied by the average account value over the period, multiplied by 184/365 to reflect the most recent fiscal half year.

AIM V.I. Financial Services Fund

Tax Information

Form 1099-DIV, Form 1042-S and other year-end tax information provide shareholders with actual calendar year amounts that should be included in their tax returns. Shareholders should consult their tax advisers.

  The following distribution information is being provided as required by the Internal Revenue Code or to meet a specific state’s requirement.

  The Fund designates the following amounts or, if subsequently determined to be different, the maximum amount allowable for its fiscal year ended December 31, 2009:

Federal and State Income Tax
Corporate Dividends Received Deduction*	100%

*  The above percentages are based on ordinary income dividends paid to shareholders during the Fund’s fiscal year.

AIM V.I. Financial Services Fund

Trustees and Officers

The address of each trustee and officer of AIM Variable Insurance Funds (the “Trust”), is 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173. Each trustee oversees 105 portfolios in the AIM Funds complex. The trustees serve for the life of the Trust, subject to their earlier death, incapacitation, resignation, retirement or removal as more specifically provided in the Trust’s organizational documents. Each officer serves for a one year term or until their successors are elected and qualified. Column two below includes length of time served with predecessor entities, if any.

	Trustee and/
Name, Year of Birth and	or Officer		Principal Occupation(s)	Other Directorship(s)
Position(s) Held with the Trust	Since		During Past 5 Years	Held by Trustee
Interested Persons
Martin L. Flanagan1 — 1960 Trustee		2007	Executive Director, Chief Executive Officer and President, Invesco Ltd. (ultimate parent of Invesco Aim and a global investment management firm); Adviser to the Board, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Trustee, The AIM Family of Funds®; Board of Governors, Investment Company Institute; and Member of Executive Board, SMU Cox School of Business	None
			Formerly: Chairman, Invesco Aim Advisors, Inc. (registered investment adviser); Director, Chairman, Chief Executive Officer and President, IVZ Inc. (holding company), INVESCO Group Services, Inc. (service provider) and Invesco North American Holdings, Inc. (holding company); Director, Chief Executive Officer and President, Invesco Holding Company Limited (parent of Invesco Aim and a global investment management firm); Director, Invesco Ltd.; Chairman and Vice Chairman, Investment Company Institute
Philip A. Taylor2 — 1954 Trustee, President and Principal Executive Officer		2006	Head of North American Retail and Senior Managing Director, Invesco Ltd.; Director, Co-Chairman, Co-President and Co- Chief Executive Officer, Invesco Advisers, inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Director, Chief Executive Officer and President, Invesco Aim Advisors, Inc. and 1371 Preferred Inc. (holding company); Director, Chairman, Chief Executive Officer and President, Invesco Aim Management Group, Inc. (financial services holding company); Director, Co-Chairman, Co-President and Co-Chief Executive Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Director and President, INVESCO Funds Group, Inc. (registered investment adviser and registered transfer agent) and AIM GP Canada Inc. (general partner for limited partnerships); Director, Invesco Aim Distributors, Inc. (registered broker dealer); Director and Chairman, Invesco Aim Investment Services, Inc. (registered transfer agent) and INVESCO Distributors, Inc. (registered broker dealer); Director, President and Chairman, INVESCO Inc. (holding company) and Invesco Canada Holdings Inc. (holding company); Chief Executive Officer, AIM Trimark Corporate Class Inc. (corporate mutual fund company) and AIM Trimark Canada Fund Inc. (corporate mutual fund company); Director and Chief Executive Officer, Invesco Trimark Ltd./Invesco Trimark Ltèe (registered investment adviser and registered transfer agent) and Invesco Trimark Dealer Inc. (registered broker dealer); Trustee, President and Principal Executive Officer, The AIM Family of Funds® (other than AIM Treasurer’s Series Trust and Short-Term Investments Trust); Trustee and Executive Vice President, The AIM Family of Funds® (AIM Treasurer’s Series Trust and Short-Term Investments Trust only); and Manager, Invesco PowerShares Capital Management LLC Formerly: Manager, Invesco PowerShares Capital Management LLC; Director, Chief Executive Officer and President, Invesco Aim Advisors, Inc.; Director, Chairman, Chief Executive Officer and President, Invesco Aim Capital Management, Inc.; President, Invesco Trimark Dealer Inc. and Invesco Trimark Ltd./Invesco Trimark Ltèe; Director and President, AIM Trimark Corporate Class Inc. and AIM Trimark Canada Fund Inc.; Senior Managing Director, Invesco Holding Company Limited; Trustee and Executive Vice President, Tax-Free Investments Trust; Director and Chairman, Fund Management Company (former registered broker dealer); President and Principal Executive Officer, The AIM Family of Funds® (AIM Treasurer’s Series Trust, Short-Term Investments Trust and Tax-Free Investments Trust only); President, AIM Trimark Global Fund Inc. and AIM Trimark Canada Fund Inc.	None
Independent Trustees
Bruce L. Crockett — 1944 Trustee and Chair		1993	Chairman, Crockett Technology Associates (technology consulting company)	ACE Limited (insurance company); Captaris, Inc. (unified messaging provider); and Investment Company Institute
Bob R. Baker — 1936 Trustee		2004	Retired	None
Frank S. Bayley — 1939 Trustee		2001	Retired Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios)	None
James T. Bunch — 1942 Trustee		2004	Founder, Green, Manning & Bunch Ltd., (investment banking firm)	Board of Governors, Western Golf Association/Evans Scholars Foundation and Executive Committee, United States Golf Association
Albert R. Dowden — 1941 Trustee		2000	Director of a number of public and private business corporations, including the Boss Group, Ltd. (private investment and management); Reich & Tang Funds (registered investment company); and Homeowners of America Holding Corporation/Homeowners of America Insurance Company (property casualty company) Formerly: Director, Continental Energy Services, LLC (oil and gas pipeline service); Director, CompuDyne Corporation (provider of product and services to the public security market) and Director, Annuity and Life Re (Holdings), Ltd. (reinsurance company); Director, President and Chief Executive Officer, Volvo Group North America, Inc.; Senior Vice President, AB Volvo; Director of various public and private corporations	Board of Nature’s Sunshine Products, Inc.
Jack M. Fields — 1952 Trustee		1997	Chief Executive Officer, Twenty First Century Group, Inc. (government affairs company); and Owner and Chief Executive Officer, Dos Angelos Ranch, L.P. (cattle, hunting, corporate entertainment), Discovery Global Education Fund (non-profit) and Cross Timbers Quail Research Ranch (non-profit) Formerly: Chief Executive Officer, Texana Timber LP (sustainable forestry company)	Administaff
Carl Frischling — 1937 Trustee		1993	Partner, law firm of Kramer Levin Naftalis and Frankel LLP	Director, Reich & Tang Funds (16 portfolios)
Prema Mathai-Davis — 1950 Trustee		1998	Retired	None
Lewis F. Pennock — 1942 Trustee		1993	Partner, law firm of Pennock & Cooper	None
Larry Soll — 1942 Trustee		2004	Retired	None
Raymond Stickel, Jr. — 1944 Trustee		2005	Retired Formerly: Director, Mainstay VP Series Funds, Inc. (25 portfolios)	None

1	Mr. Flanagan is considered an interested person of the Trust because he is an officer of the adviser to the Trust, and an officer and a director of Invesco Ltd., ultimate parent of the adviser to the Trust.
2	Mr. Taylor is considered an interested person of the Trust because he is an officer and a director of the adviser to, and a director of the principal underwriter of, the Trust.

T-1

Trustees and Officers — (continued)

	Trustee and/
Name, Year of Birth and	or Officer		Principal Occupation(s)	Other Directorship(s)
Position(s) Held with the Trust	Since		During Past 5 Years	Held by Trustee
Other Officers
Russell C. Burk — 1958 Senior Vice President and Senior Officer		2005	Senior Vice President and Senior Officer of The AIM Family of Funds®	N/A
John M. Zerr — 1962 Senior Vice President, Chief Legal Officer and Secretary		2006	Director, Senior Vice President, Secretary and General Counsel, Invesco Aim Management Group, Inc., Senior Vice President, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Director, Senior Vice President and Secretary, Invesco Aim Distributors, Inc.; Director, Vice President and Secretary, Invesco Aim Investment Services, Inc. and INVESCO Distributors, Inc.; Director and Vice President, INVESCO Funds Group, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The AIM Family of Funds®; and Manager, Invesco PowerShares Capital Management LLC	N/A
			Formerly: Director, Senior Vice President, General Counsel and Secretary, Invesco Aim Advisors, Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco Aim Capital Management, Inc.; Chief Operating Officer and General Counsel, Liberty Ridge Capital, Inc. (an investment adviser); Vice President and Secretary, PBHG Funds (an investment company) and PBHG Insurance Series Fund (an investment company); Chief Operating Officer, General Counsel and Secretary, Old Mutual Investment Partners (a broker-dealer); General Counsel and Secretary, Old Mutual Fund Services (an administrator) and Old Mutual Shareholder Services (a shareholder servicing center); Executive Vice President, General Counsel and Secretary, Old Mutual Capital, Inc. (an investment adviser); and Vice President and Secretary, Old Mutual Advisors Funds (an investment company)
Lisa O. Brinkley — 1959 Vice President		2004	Global Compliance Director, Invesco Ltd.; Chief Compliance Officer, Invesco Aim Distributors, Inc. and Invesco Aim Investment Services, Inc.; and Vice President, The AIM Family of Funds® Formerly: Senior Vice President, Invesco Aim Management Group, Inc.; Senior Vice President and Chief Compliance Officer, Invesco Aim Advisors, Inc. and The AIM Family of Funds®; Vice President and Chief Compliance Officer, Invesco Aim Capital Management, Inc. and Invesco Aim Distributors, Inc.; Vice President, Invesco Aim Investment Services, Inc. and Fund Management Company	N/A
Kevin M. Carome — 1956 Vice President		2003	General Counsel, Secretary and Senior Managing Director, Invesco Ltd.; Director, Invesco Holding Company Limited and INVESCO Funds Group, Inc.; Director and Executive Vice President, IVZ, Inc., Invesco Group Services, Inc., Invesco North American Holdings, Inc. and Invesco Investments (Bermuda) Ltd.; Director and Secretary, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); and Vice President, The AIM Family of Funds® Formerly: Senior Managing Director and Secretary, Invesco North American Holdings, Inc.; Vice President and Secretary, IVZ, Inc. and Invesco Group Services, Inc.; Senior Managing Director and Secretary, Invesco Holding Company Limited; Director, Senior Vice President, Secretary and General Counsel, Invesco Aim Management Group, Inc. and Invesco Aim Advisors, Inc.; Senior Vice President, Invesco Aim Distributors, Inc.; Director, General Counsel and Vice President, Fund Management Company; Vice President, Invesco Aim Capital Management, Inc. and Invesco Aim Investment Services, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The AIM Family of Funds®; Director and Vice President, INVESCO Distributors, Inc.; and Chief Executive Officer and President, INVESCO Funds Group, Inc.	N/A
Sheri Morris — 1964 Vice President, Treasurer and Principal Financial Officer		1999	Vice President, Treasurer and Principal Financial Officer, The AIM Family of Funds®; and Vice President, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.) Formerly: Vice President, Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.; Assistant Vice President and Assistant Treasurer, The AIM Family of Funds® and Assistant Vice President, Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A
Karen Dunn Kelley — 1960 Vice President		1993	Head of Invesco’s World Wide Fixed Income and Cash Management Group; Senior Vice President, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Executive Vice President, Invesco Aim Distributors, Inc.; Senior Vice President, Invesco Aim Management Group, Inc.; and Director, Invesco Mortgage Capital Inc.; Vice President, The AIM Family of Funds® (other than AIM Treasurer’s Series Trust and Short-Term Investments Trust); and President and Principal Executive Officer, The AIM Family of Funds® (AIM Treasurer’s Series Trust and Short-Term Investments Trust only)	N/A
			Formerly: Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Director of Cash Management and Senior Vice President, Invesco Aim Advisors, Inc. and Invesco Aim Capital Management, Inc.; President and Principal Executive Officer, Tax-Free Investments Trust; Director and President, Fund Management Company; Chief Cash Management Officer, Director of Cash Management, Senior Vice President, and Managing Director, Invesco Aim Capital Management, Inc.; Director of Cash Management, Senior Vice President, and Vice President, Invesco Aim Advisors, Inc. and The AIM Family of Funds® (AIM Treasurer’s Series Trust, Short-Term Investments Trust and Tax-Free Investments Trust only)
Lance A. Rejsek — 1967 Anti-Money Laundering Compliance Officer		2005	Anti-Money Laundering Compliance Officer, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Invesco Aim Distributors, Inc., Invesco Aim Investment Services, Inc., and The AIM Family of Funds®	N/A
			Formerly: Anti-Money Laundering Compliance Officer, Fund Management Company, Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.
Todd L. Spillane — 1958 Chief Compliance Officer		2006	Senior Vice President, Invesco Aim Management Group, Inc.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Chief Compliance Officer, The AIM Family of Funds®, INVESCO Private Capital Investments, Inc. (holding company), Invesco Private Capital, Inc. (registered investment adviser) and Invesco Senior Secured Management, Inc. (registered investment adviser); Vice President, Invesco Aim Distributors, Inc. and Invesco Aim Investment Services, Inc. Formerly: Senior Vice President and Chief Compliance Officer, Invesco Aim Advisors, Inc. and Invesco Aim Capital Management, Inc.; Chief Compliance Officer, Invesco Global Asset Management (N.A.), Inc.; Vice President, Invesco Aim Capital Management, Inc. and Fund Management Company	N/A

The Statement of Additional Information of the Trust includes additional information about the Fund’s Trustees and is available upon request, without charge, by calling 1.800.959.4246. Please refer to the Fund’s prospectus for information on the Fund’s sub-advisers.

Office of the Fund	Investment Adviser	Distributor	Auditors
11 Greenway Plaza, Suite 100	Invesco Advisers, Inc.	Invesco Aim Distributors, Inc.	PricewaterhouseCoopers LLP
Houston, TX 77046-1173	1555 Peachtree Street, N.E.	11 Greenway Plaza, Suite 100	1201 Louisiana Street, Suite 2900
	Atlanta, GA 30309	Houston, TX 77046-1173	Houston, TX 77002-5678
Counsel to the Fund	Counsel to the	Transfer Agent	Custodian
Stradley Ronon Stevens & Young, LLP	Independent Trustees	Invesco Aim Investment Services, Inc.	State Street Bank and Trust Company
2600 One Commerce Square	Kramer, Levin, Naftalis & Frankel LLP	P.O. Box 4739	225 Franklin
Philadelphia, PA 19103	1177 Avenue of the Americas	Houston, TX 77210-4739	Boston, MA 02110-2801
	New York, NY 10036-2714

T-2

AIM V.I. Global Health Care Fund
Annual Report to Shareholders n December 31, 2009

The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter-ends. For the second and fourth quarters, the lists appear in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The Fund’s Form N-Q filings are available on the SEC website, sec.gov. Copies of the Fund’s Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers for the Fund are 811-07452 and 033-57340. The Fund’s most recent portfolio holdings, as filed on Form N-Q, have also been made available to insurance companies issuing variable annuity contracts and variable life insurance policies (“variable products”) that invest in the Fund.

A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, from our Client Services department at 800 410 4246 or on the Invesco Aim website, invescoaim.com. On the home page, scroll down and click on Proxy Policy. The information is also available on the SEC website, sec.gov.

Information regarding how the Fund voted proxies related to its portfolio securities during the 12 months ended June 30, 2009, is available at our website, invescoaim.com. Click the About Us tab at the top of the home page; click Legal Information; and then click Proxy Voting Search. The information is also available on the SEC website, sec.gov.

Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Aim Distributors, Inc. is the U.S. distributor for Invesco Ltd.’s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd.

This report must be accompanied or preceded by a currently effective Fund prospectus and variable product prospectus, which contain more complete information, including sales charges and expenses. Investors should read each carefully before investing.

Invesco Aim Distributors, Inc.

NOT FDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEE

Management’s Discussion of Fund Performance

Performance summary

The year was characterized by two dramatically different market environments. In early 2009, equity markets experienced steep declines as credit markets froze and risk premiums rose dramatically in response to the global economic recession. As central banks coordinated easing efforts and companies cut costs aggressively, access to funding improved and market valuations in both the credit and equity markets recovered from the March lows. Health care reform efforts overshadowed some of the defensive growth characteristics of the sector during much of the year. Additionally, the strong equity market rally propelled a rotation out of larger, more defensive companies in favor of more cyclical, higher risk stocks. Despite these headwinds, AIM V.I. Global Health Care Fund Series I shares, excluding variable product issuer charges, outperformed its style-specific benchmark, the MSCI World Health Care Index, but underperformed the broad market, as measured by the MSCI World Index. The Fund’s relative performance was positively affected by security selection in pharmaceuticals, managed health care and life sciences tools and services.

     Your Fund’s long-term performance appears later in this report.

Fund vs. Indexes

Total returns, 12/31/08 to 12/31/09, excluding variable product issuer charges.

If variable product issuer charges were included, returns would be lower.

Series I Shares	27.67	%
Series II Shares	27.39
MSCI World Index6 (Broad Market Index)	29.99
MSCI World Health Care Index6 (Style-Specific Index)	18.89
Lipper VUF Health/Biotechnology Funds Category Average6 (Peer Group)	23.69

⁶ Lipper Inc.

How we invest

We seek health care stocks of all market capitalizations from around the world that we believe are attractively priced and have the potential to benefit from long-term earnings and cash flow growth.

     We invest primarily in four segments of the health care sector: pharmaceuticals, biotechnology, medical technology and health services. Suitable investments in this universe exhibit strong fundamentals and earnings, coupled with healthy growth prospects and discounted valuations usually due to perceived near-term uncertainty. We assess the long-term commercial potential of each company’s current and prospective products, particularly those that fill unaddressed market needs.

     We manage risk by:

■	Maintaining exposure to all health care sub-sectors.
■	Diversifying the portfolio across 50 to 80 holdings.
■	Limiting the size an of investment in any single position according to its risk profile.
■	Investing in international companies, which may have lower correlations to the U.S. stock market.
	We reassess our holdings when:
■	We identify a more attractive investment opportunity.
■	We foresee a deterioration of a company’s fundamentals.
■	A company fails to execute on its plan.
■	A decline in management team quality occurs.
■	A stock’s price target has been met.

Market conditions and your Fund

Though the beginning of the year was marked by headlines claiming economic “Armageddon,” the U.S. economy began to show signs that the economic contraction was moderating. Economic data indicated that the rampant decline in business spending and consumption that occurred at the end of 2008 and the beginning of 2009 may have eased. Given signs that the economic downturn may be moderating, equity and credit markets improved. In addition, financial markets benefited from the various government programs introduced to improve bank balance sheets and reduce credit spreads.

     A variety of emergency fiscal and monetary expansion initiatives of governments and central banks appeared to have succeeded in averting a worst case global economic scenario. However, unemployment levels and the long-term implications of the sovereign debt burden for Western economies continued to cause concern. Additionally, businesses and households still had a considerable way to go in their deleveraging processes.

     Against this backdrop, telecommunication services, utilities and energy were among the weakest performing sectors of the S&P 500 Index.¹ Conversely, information technology, materials and consumer discretionary were the best performing sectors.¹ Health care stocks outperformed early in the year when the broad markets were down. However, their performance was muted during the subsequent rally due to a rotation into cyclical stocks and concerns surrounding health care reform.

Portfolio Composition
By country

United States	73.2	%
Switzerland	5.8
Germany	4.8
Brazil	2.4
Ireland	2.3
United Kingdom	2.2
Countries Each Less Than
2.0% of Portfolio	3.7
Money Market Funds Plus Other Assets Less Liabilities	5.6

Top 10 Equity Holdings*

1. Roche Holding AG	4.2	%
2. Gilead Sciences, Inc.	4.1
3. Thermo Fisher Scientific, Inc.	3.7
4. Amgen Inc.	3.7
5. Abbott Laboratories	3.4
6. CVS Caremark Corp.	3.1
7. Johnson & Johnson	2.5
8. Boston Scientific Corp.	2.5
9. WellPoint Inc.	2.4
10. Baxter International Inc.	2.4

Top Five Industries

1. Biotechnology		20.6	%
2. Pharmaceuticals		20.0
3. Health Care Equipment		16.1
4. Life Sciences Tools & Services		8.3
5. Managed Health Care		7.7
Total Net Assets	$170.4 million
Total Number of Holdings*		67

The Fund’s holdings are subject to change, and there is no assurance that the Fund will continue to hold any particular security.

* Excluding money market fund holdings.

AIM V.I. Global Health Care Fund

     Relative to the MSCI World Health Care Index, our security selection in pharmaceuticals, managed health care and life sciences tools and services aided performance. From an industry allocation perspective, an underweight position in pharmaceuticals and an overweight position in life sciences tools and services also contributed to the Fund’s outperformance relative to the style-specific index. On the other hand, an overweight in biotechnology stocks detracted from the Fund’s relative performance. It is important to note that the style-specific index is weighted by size or market capitalization, and this results in a 60% allocation to pharmaceutical stocks. In contrast, the Fund weights its holdings based on our fundamental analysis with consideration to risk management factors and is therefore more diversified across health care industries. Merger and acquisition activity also affected individual stock performance during the year.

     From a stock-specific perspective, Life Technologies was the top contributor to the Fund’s absolute performance. On the other hand, Genzyme was the top detractor.

     Life Technologies contributed positively to Fund performance during the year. The company manufactures tools used in basic research at pharmaceutical firms. We believed Life Technologies displayed defensive growth characteristics and would benefit from spending increases by the National Institutes of Health. Therefore, we added to the position during the year.

     Genzyme, in addition to suffering from the headwinds of the rotation out of large-cap biotechnology stocks, was also negatively affected by drug manufacturing issues. As a result, Genzyme detracted from Fund performance but remained a large position in the portfolio given its favorable long-term prospects.

     The biotechnology industry experienced relative outperformance during the bear market, buoyed in part by the acquisition of Genentech (no longer a Fund holding) by Swiss pharmaceutical company Roche during the first quarter of 2009. Once the economy started to recover, money continued to flow out of large-cap biotechnology stocks.

     As we have seen many failed attempts to nationalize health care, massive health care reform seemed unlikely in the near term in our opinion. A watered down version of the current proposal, however, seemed more likely. Most importantly, not all health care companies would be affected by health care reform in the same way. Certainly, some industries, like health care equipment and biotechnology, are less exposed. As a result, we continued to overweight these sectors.

     We continued to favor specialty pharmaceuticals and large-cap biotechnology stocks over large-cap pharmaceuticals. Relative to the benchmark, we maintained a significant underweight in large-cap pharmaceuticals as many firms face looming patent expirations with limited drug pipelines, which may result in modest (if any) earnings growth. Our emphasis on specialty pharmaceuticals and biotechnology stocks was based on robust in-line portfolios, compelling pipelines and the view that many of these companies could be targets of ongoing consolidation. Importantly, the valuations for many of these companies were near historic lows.

     We continued to focus on companies with new product cycles, less reimbursement risk and less competition. The majority of the Fund is invested in domestic stocks, where we have found more companies that fit our fundamental selection criteria. Our international weight was focused mainly on European large-cap pharmaceutical companies with fewer patent expiration concerns.

     Given markets have experienced a strong recovery during the year, we would like to caution investors against making investment decisions based on short-term performance. As always, we recommend that you consult a financial adviser to discuss your individual financial program. We thank you for your continued investment in AIM V.I. Global Health Care Fund.

1 Lipper Inc.

The views and opinions expressed in management’s discussion of Fund performance are those of Invesco Advisers, Inc. These views and opinions are subject to change at any time based on factors such as market and economic conditions. These views and opinions may not be relied upon as investment advice or recommendations, or as 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 Invesco Advisers, Inc. 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.

See important Fund and index disclosures later in this report.

Derek Taner

Chartered Financial Analyst, portfolio manager, is lead manager of AIM V.I. Global Health Care Fund. Mr. Taner began his investment career in 1993 as a fixed income analyst, assistant portfolio manager and manager of a health care fund. Mr. Tanner joined Invesco Aim in 2005. He earned a B.S. in accounting and an M.B.A. from the Haas School of Business at the University of California at Berkeley.

Dean Dillard

Chartered Financial Analyst, portfolio manager, is manager of AIM V.I. Global Health Care Fund. He joined Invesco Aim in 2000. Mr. Dillard earned a B.S. in corporate finance from the University of Alabama and an M.B.A. from the Owen School of Business at Vanderbilt University.

Assisted by the Global Health Care Team

AIM V.I. Global Health Care Fund

Your Fund’s Long-Term Performance

Results of a $10,000 Investment – Oldest Share Class since Inception
Fund data from 5/21/97, index data from 5/31/97

AIM V.I. Global Health Care Fund- Series I Shares Lipper VUF Health/Biotechnology Funds Category Average¹ MSCI World Index¹

1 Lipper Inc.

Past performance cannot guarantee comparable future results.

     This chart, which is a logarithmic chart, presents the fluctuations in the value of the Fund and its indexes. We believe that a logarithmic chart is more effective than other types of charts in illustrating changes in value during the early years shown in the chart. The vertical axis, the one that indicates the dollar value of an investment, is constructed with each segment representing a percent change in the value of the investment. In this chart, each segment represents a doubling, or 100% change, in the value of the investment. In other words, the space between $5,000 and $10,000 is the same size as the space between $10,000 and $20,000, and so on.

Average Annual Total Returns
As of 12/31/09

Series I Shares
Inception (5/21/97)	6.73	%
10 Years	3.23
5 Years	3.02
1 Year	27.67
Series II Shares
10 Years	2.97	%
5 Years	2.76
1 Year	27.39

Series II shares’ inception date is April 30, 2004. Returns since that date are historical. All other returns are the blended returns of the historical performance of Series II shares since their inception and the restated historical performance of Series I shares (for periods prior to inception of Series II shares) adjusted to reflect the Rule 12b-1 fees applicable to Series II shares. The inception date of Series I shares is May 21, 1997. The performance of the Fund’s Series I and Series II share classes will differ primarily due to different class expenses.

     The performance data quoted represent past performance and cannot guarantee comparable future results; current performance may be lower or higher. Please contact your variable product issuer or financial adviser for the most recent month-end variable product performance. Performance figures reflect Fund expenses, reinvested distributions and changes in net asset value. Investment return and principal value will fluctuate so that you may have a gain or loss when you sell shares.

     The net annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 1.13% and 1.38%, respectively.¹ The total annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 1.14% and 1.39%, respectively. The expense ratios presented above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

     AIM V.I. Global Health Care Fund, a series portfolio of AIM Variable Insurance Funds, is currently offered through insurance companies issuing variable products. You cannot purchase shares of the Fund directly. Performance figures given represent the Fund and are not intended to reflect actual variable product values. They do not reflect sales charges, expenses and fees assessed in connection with a variable product. Sales charges, expenses and fees, which are determined by the variable product issuers, will vary and will lower the total return.

     The most recent month-end performance data at the Fund level, excluding variable product charges, is available on the Invesco Aim automated information line, 866 702 4402. As mentioned above, for the most recent month-end performance including variable product charges, please contact your variable product issuer or financial adviser.

1 Total annual operating expenses less any contractual fee waivers and/or expense reimbursements by the adviser in effect through at least June 30, 2010. See current prospectus for more information.

AIM V.I. Global Health Care Fund

AIM V.I. Global Health Care Fund’s investment objective is capital growth.

■ Unless otherwise stated, information presented in this report is as of December 31, 2009, and is based on total net assets.

■ Unless otherwise noted, all data provided by Invesco.

Principal risks of investing in the Fund

The values of convertible securities in which the Fund invests may be affected by market interest rates, the risk that the issuer may default on interest or principal payments, and the value of the underlying common stock into which these securities may be converted.

     Investing in developing countries can add additional risk, such as high rates of inflation or sharply devalued currencies against the U.S. dollar. Transaction costs are often higher, and there may be delays in settlement procedures.

     Foreign securities have additional risks, including exchange rate changes, political and economic upheaval, relative lack of information, relatively low market liquidity, and the potential lack of strict financial and accounting controls and standards.

     The value of the Fund’s shares is particularly vulnerable to factors affecting the health care industry, such as substantial government regulation that may affect the demand for products and services offered by health care companies. Also, the products and services offered by health care companies may be subject to rapid obsolescence caused by scientific advances and technological innovations, which can cause Fund shares to rise and fall more than the value of shares of funds that invest more broadly.

     Interest rate risk refers to the risk that bond prices generally fall as interest rates rise and vice versa.

     Since a large percentage of the Fund’s assets may be invested in securities of a limited number of companies, each investment has a greater effect on the Fund’s overall performance, and any change in the value of those securities could significantly affect the value of your investment in the Fund.

     There is no guarantee that the investment techniques and risk analysis used by the Fund’s portfolio managers will produce the desired results.

     The prices of securities held by the Fund may decline in response to market risks.

     The Fund invests in synthetic instruments, the value of which may not correlate perfectly with the overall securities markets. Rising interest rates and market price fluctuations will affect the performance of the Fund’s investments in synthetic instruments.

About indexes used in this report

The MSCI World Index^SM is an unmanaged index considered representative of stocks of developed countries.

     The MSCI World Health Care Index is an unmanaged index considered representative of health care stocks of developed countries.

     The Lipper VUF Health/Biotechnology Funds Category Average represents an average of all of the variable insurance underlying funds in the Lipper Health/ Biotechnology Funds category.

     The S&P 500^® Index is an unmanaged index considered representative of the U.S. stock market.

     The Fund is not managed to track the performance of any particular index, including the indexes defined here, and consequently, the performance of the Fund may deviate significantly from the performance of the indexes.

     A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group reflects fund expenses; performance of a market index does not.

Other information

The Chartered Financial Analyst^® (CFA^®) designation is globally recognized and attests to a charterholder’s success in a rigorous and comprehensive study program in the field of investment management and research analysis.

     The returns shown in management’s discussion of Fund performance are based on net asset values calculated for shareholder transactions. Generally accepted accounting principles require adjustments to be made to the net assets of the Fund at period end for financial reporting purposes, and as such, the net asset values for shareholder transactions and the returns based on those net asset values may differ from the net asset values and returns reported in the Financial Highlights. Additionally, the returns and net asset values shown throughout this report are at the Fund level only and do not include variable product issuer charges. If such charges were included, the total returns would be lower.

     Industry classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s.

AIM V.I. Global Health Care Fund

Schedule of Investments^(a)

December 31, 2009

	Shares		Value
Common Stocks & Other Equity Interests–94.45%
Biotechnology–20.57%
AMAG Pharmaceuticals, Inc.(b)		19,472	$	740,520
Amgen Inc.(b)		110,398		6,245,215
Biogen Idec Inc.(b)		29,090		1,556,315
BioMarin Pharmaceutical Inc.(b)		124,174		2,335,713
Celgene Corp.(b)		68,666		3,823,323
CSL Ltd. (Australia)		66,276		1,928,127
Genzyme Corp.(b)		62,688		3,072,339
Gilead Sciences, Inc.(b)		159,971		6,923,545
Incyte Corp.(b)		63,690		580,216
Myriad Genetics, Inc.(b)		52,578		1,372,286
OSI Pharmaceuticals, Inc.(b)		28,674		889,754
Pharmasset, Inc.(b)		19,764		409,115
Savient Pharmaceuticals Inc.(b)		103,539		1,409,166
United Therapeutics Corp.(b)		33,882		1,783,887
Vertex Pharmaceuticals Inc.(b)		46,212		1,980,184
				35,049,705
Drug Retail–4.51%
CVS Caremark Corp.		166,086		5,349,630
Drogasil S.A. (Brazil)		146,520		2,338,715
				7,688,345
Health Care Distributors–1.54%
McKesson Corp.		41,892		2,618,250
Health Care Equipment–16.08%
Baxter International Inc.		69,269		4,064,705
Becton, Dickinson and Co.		23,049		1,817,644
Boston Scientific Corp.(b)		467,836		4,210,524
CareFusion Corp.(b)		52,274		1,307,373
Covidien PLC (Ireland)		81,762		3,915,582
Dexcom Inc.(b)		48,428		391,298
Hospira, Inc.(b)		29,731		1,516,281
ResMed Inc.(b)		25,721		1,344,437
St. Jude Medical, Inc.(b)		72,385		2,662,320
Varian Medical Systems, Inc.(b)		43,481		2,037,085
Wright Medical Group, Inc.(b)		67,893		1,286,572
Zimmer Holdings, Inc.(b)		48,204		2,849,339
				27,403,160
Health Care Facilities–2.40%
Assisted Living Concepts Inc.–Class A(b)		31,460		829,600
Rhoen-Klinikum AG (Germany)		133,140		3,252,012
				4,081,612
	Shares
Health Care Services–7.72%
DaVita, Inc.(b)		56,085		3,294,433
Express Scripts, Inc.(b)		43,963		3,800,601
Medco Health Solutions, Inc.(b)		46,338		2,961,462
Omnicare, Inc.		57,542		1,391,365
Quest Diagnostics Inc.		28,169		1,700,844
				13,148,705
Health Care Supplies–3.83%
Alcon, Inc.		21,005		3,452,172
DENTSPLY International Inc.		48,533		1,706,905
Immucor, Inc.(b)		67,457		1,365,330
				6,524,407
Health Care Technology–0.75%
Allscripts-Misys Healthcare Solutions, Inc.(b)		62,810		1,270,646
Life & Health Insurance–1.05%
Amil Participacoes S.A. (Brazil)(c)		230,700		1,794,815
Life Sciences Tools & Services–8.25%
Gerresheimer AG (Germany)		55,287		1,854,633
Life Technologies Corp.(b)		76,098		3,974,598
Pharmaceutical Product Development, Inc.		78,722		1,845,244
Thermo Fisher Scientific, Inc.(b)		133,895		6,385,453
				14,059,928
Managed Health Care–7.72%
Aetna Inc.		77,217		2,447,779
AMERIGROUP Corp.(b)		68,445		1,845,277
Aveta, Inc. (Acquired 12/21/05; Cost $1,655,802)(b)(c)		122,652		735,912
CIGNA Corp.		40,036		1,412,070
Health Net Inc.(b)		113,429		2,641,761
WellPoint Inc.(b)		69,819		4,069,750
				13,152,549
Pharmaceuticals–20.03%
Abbott Laboratories		105,877		5,716,299
Allergan, Inc./United States		42,769		2,694,875
Auxilium Pharmaceuticals Inc.(b)		11,094		332,598
Bayer AG (Germany)		22,993		1,835,212
Cadence Pharmaceuticals, Inc.(b)(d)		4,032		38,990
EastPharma Ltd.–GDR (Turkey)(b)(c)		114,132		273,917
Hikma Pharmaceuticals PLC (United Kingdom)		119,052		975,115
Ipsen S.A. (France)		32,981		1,830,070
Johnson & Johnson		65,483		4,217,760
Merck KGaA (Germany)		12,622		1,177,415
Novartis AG–ADR (Switzerland)		52,410		2,852,676

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

AIM V.I. Global Health Care Fund

	Shares		Value
Pharmaceuticals–(continued)
Pharmstandard–GDR (Russia)(b)(c)		23,450	$	470,703
Roche Holding AG (Switzerland)		41,608		7,071,153
Shire PLC–ADR (United Kingdom)		47,312		2,777,214
Teva Pharmaceutical Industries Ltd.–ADR (Israel)		33,100		1,859,558
				34,123,555
Total Common Stocks & Other Equity Interests (Cost $149,073,362)				160,915,677
Money Market Funds–4.33%
Liquid Assets Portfolio–Institutional Class(e)		3,688,246		3,688,246
Premier Portfolio–Institutional Class(e)		3,688,246		3,688,246
Total Money Market Funds (Cost $7,376,492)				7,376,492
TOTAL INVESTMENTS (excluding investments purchased with cash collateral from securities on loan)–98.78% (Cost $156,449,854)				168,292,169
Investments Purchased with Cash Collateral from Securities on Loan
Money Market Funds–0.02%
Liquid Assets Portfolio–Institutional Class (Cost $29,290)(e)(f)		29,290		29,290
TOTAL INVESTMENTS–98.80% (Cost $156,479,144)				168,321,459
OTHER ASSETS LESS LIABILITIES–1.20%				2,048,085
NET ASSETS–100.00%			$	170,369,544

Investment Abbreviations:

ADR	– American Depositary Receipt
GDR	– Global Depositary Receipt

Notes to Schedule of Investments:

(a)	Industry and/or sector classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s.
(b)	Non-income producing security.
(c)	Security purchased or received in a transaction exempt from registration under the Securities Act of 1933, as amended. The security may be resold pursuant to an exemption from registration under the 1933 Act, typically to qualified institutional buyers. The aggregate value of these securities at December 31, 2009 was $3,275,347, which represented 1.92% of the Fund’s Net Assets.
(d)	All or a portion of this security was out on loan at December 31, 2009.
(e)	The money market fund and the Fund are affiliated by having the same investment adviser.
(f)	The security has been segregated to satisfy the commitment to return the cash collateral received in securities lending transactions upon the borrower’s return of the securities loaned. See Note 1J.

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

AIM V.I. Global Health Care Fund

Statement of Assets and Liabilities

December 31, 2009

Assets:
Investments, at value (Cost $149,073,362)*	$	160,915,677
Investments in affiliated money market funds, at value and cost		7,405,782
Total investments, at value (Cost $156,479,144)		168,321,459
Cash		1,840,207
Foreign currencies, at value (Cost $20,691)		22,925
Receivables for:
Fund shares sold		195,538
Dividends		95,561
Foreign currency contracts outstanding		204,541
Investment for trustee deferred compensation and retirement plans		14,750
Total assets		170,694,981
Liabilities:
Payables for:
Fund shares reacquired		93,446
Collateral upon return of securities loaned		29,290
Accrued fees to affiliates		120,264
Accrued other operating expenses		42,586
Trustee deferred compensation and retirement plans		39,851
Total liabilities		325,437
Net assets applicable to shares outstanding	$	170,369,544
Net assets consist of:
Shares of beneficial interest	$	186,814,598
Undistributed net investment income (loss)		(39,364	)
Undistributed net realized gain (loss)		(28,464,771	)
Unrealized appreciation		12,059,081
	$	170,369,544
Net Assets:
Series I	$	143,647,683
Series II	$	26,721,861
Shares outstanding, $0.001 par value per share, unlimited number of shares authorized:
Series I		9,051,885
Series II		1,713,325
Series I:
Net asset value per share	$	15.87
Series II:
Net asset value per share	$	15.60

*  At December 31, 2009, securities with an aggregate value of $28,043 were on loan to brokers.

Statement of Operations

For the year ended December 31, 2009

Investment income:
Dividends (net of foreign withholding taxes of $116,439)	$	1,445,176
Dividends from affiliated money market funds (includes securities lending income of $128,886)		159,537
Total investment income		1,604,713
Expenses:
Advisory fees		1,113,874
Administrative services fees		415,212
Custodian fees		27,866
Distribution fees — Series II		56,932
Transfer agent fees		41,577
Trustees’ and officers’ fees and benefits		24,884
Other		63,995
Total expenses		1,744,340
Less: Fees waived		(8,545	)
Net expenses		1,735,795
Net investment income (loss)		(131,082	)
Realized and unrealized gain (loss) from:
Net realized gain (loss) from:
Investment securities (includes net gains (losses) from securities sold to affiliates of $(403,677))		(13,651,667	)
Foreign currencies		108,995
Foreign currency contracts		(763,240	)
		(14,305,912	)
Change in net unrealized appreciation of:
Investment securities		50,432,247
Foreign currencies		15,943
Foreign currency contracts		520,716
		50,968,906
Net realized and unrealized gain		36,662,994
Net increase in net assets resulting from operations	$	36,531,912

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

AIM V.I. Global Health Care Fund

Statement of Changes in Net Assets

For the years ended December 31, 2009 and 2008

	2009			2008
Operations:
Net investment income (loss)	$	(131,082	)	$	624,017
Net realized gain (loss)		(14,305,912	)		(13,908,110	)
Change in net unrealized appreciation (depreciation)		50,968,906			(53,954,663	)
Net increase (decrease) in net assets resulting from operations		36,531,912			(67,238,756	)
Distributions to shareholders from net investment income:
Series I		(447,208	)		—
Series II		(30,590	)		—
Total distributions from net investment income		(477,798	)		—
Distributions to shareholders from net realized gains:
Series I		—			(33,925,325	)
Series II		—			(5,201,268	)
Total distributions from net realized gains		—			(39,126,593	)
Share transactions-net:
Series I		(15,173,536	)		(970,476	)
Series II		1,039,283			11,520,859
Net increase (decrease) in net assets resulting from share transactions		(14,134,253	)		10,550,383
Net increase (decrease) in net assets		21,919,861			(95,814,966	)
Net assets:
Beginning of year		148,449,683			244,264,649
End of year (includes undistributed net investment income (loss) of $(39,364) and $415,204, respectively)	$	170,369,544		$	148,449,683

Notes to Financial Statements

December 31, 2009

NOTE 1—Significant Accounting Policies

AIM V.I. Global Health Care Fund (the “Fund”) is a series portfolio of AIM Variable Insurance Funds (the “Trust”). The Trust is a Delaware statutory trust registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end series management investment company consisting of twenty-one separate portfolios, (each constituting a “Fund”). The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Matters affecting each Fund or class will be voted on exclusively by the shareholders of such Fund or class. Current Securities and Exchange Commission (“SEC”) guidance, however, requires participating insurance companies offering separate accounts to vote shares proportionally in accordance with the instructions of the contract owners whose investments are funded by shares of each Fund or class.

  The Fund’s investment objective is capital growth.

  The Fund currently offers two classes of shares, Series I and Series II, both of which are offered to insurance company separate accounts funding variable annuity contracts and variable life insurance policies (“variable products”).

  The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements.

A.

Security Valuations — Securities, including restricted securities, are valued according to the following policy.

A security listed or traded on an exchange (except convertible bonds) is valued at its last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales or official closing price on a particular day, the security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based on prices furnished by independent pricing services or market makers. When such securities are valued by an independent pricing service they may be considered fair valued. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean between the last bid and ask prices from the exchange on which they are principally traded. Options not listed on an exchange are valued by an independent source at the mean between the last bid and ask prices. For purposes of determining net asset value per share, futures and option contracts generally are valued 15 minutes after the close of the customary trading session of the New York Stock Exchange (“NYSE”).

AIM V.I. Global Health Care Fund

	Investments in open-end and closed-end registered investment companies that do not trade on an exchange are valued at the end of day net asset value per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded.
	Debt obligations (including convertible bonds) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution-size trading in similar groups of securities, developments related to specific securities, dividend rate, yield, quality, type of issue, coupon rate, maturity, individual trading characteristics and other market data. Short-term obligations, including commercial paper, having 60 days or less to maturity are recorded at amortized cost which approximates value. Debt securities are subject to interest rate and credit risks. In addition, all debt securities involve some risk of default with respect to interest and/or principal payments.
	Foreign securities (including foreign exchange contracts) are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the NYSE. If market quotations are available and reliable for foreign exchange traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that are significant and make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economical upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
	Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities and Corporate Loans. The mean between the last bid and asked prices may be used to value debt obligations other than Corporate Loans.
	Securities for which market quotations are not readily available or are unreliable are valued at fair value as determined in good faith by or under the supervision of the Trust’s officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a security’s fair value.
	Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
B.	Securities Transactions and Investment Income — Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income is recorded on the accrual basis from settlement date. Dividend income is recorded on the ex-dividend date.
	The Fund may periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain/loss for investments no longer held and as unrealized gain/loss for investments still held.
	Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the realized and unrealized net gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the Fund’s net asset value and, accordingly, they reduce the Fund’s total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in the Statement of Operations and Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the adviser.
	The Fund allocates income and realized and unrealized capital gains and losses to a class based on the relative net assets of each class.
C.	Country Determination — For the purposes of making investment selection decisions and presentation in the Schedule of Investments, the investment adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuer’s securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted.
D.	Distributions — Distributions from income and net realized capital gain, if any, are generally paid to separate accounts of participating insurance companies annually and recorded on ex-dividend date.
E.	Federal Income Taxes — The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code necessary to qualify as a regulated investment company and to distribute substantially all of the Fund’s taxable earnings to shareholders. As such, the Fund will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements.

AIM V.I. Global Health Care Fund

	The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.
F.	Expenses — Fees provided for under the Rule 12b-1 plan of a particular class of the Fund and which are directly attributable to that class are charged to the operations of such class. All other expenses are allocated among the classes based on relative net assets.
G.	Accounting Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print, which is generally 45 days from the period-end date.
H.	Indemnifications — Under the Trust’s organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Fund’s servicing agreements, that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote.
I.	Other Risks — The Fund may invest a large percentage of assets in securities of a limited number of companies, such that each investment may have a greater effect on the Fund’s overall performance, and any change in the value of those securities could significantly affect the value of your investment in the Fund.
	The Fund has invested in non-publicly traded companies, some of which are in the startup or development stages. These investments are inherently risky, as the market for the technologies or products these companies are developing are typically in the early stages and may never materialize. The Fund could lose its entire investment in these companies. These investments are valued at fair value as determined in good faith in accordance with procedures approved by the Board of Trustees. Investments in privately held venture capital securities are illiquid.
J.	Securities Lending — The Fund may lend portfolio securities having a market value up to one-third of the Fund’s total assets. Such loans are secured by collateral equal to no less than the market value of the loaned securities determined daily by the securities lending provider. Such collateral will be cash or debt securities issued or guaranteed by the U.S. Government or any of its sponsored agencies. Cash collateral received in connection with these loans is invested in short-term money market instruments or affiliated money market funds and is shown as such on the Schedule of Investments. It is the Fund’s policy to obtain additional collateral from or return excess collateral to the borrower by the end of the next business day, following the valuation date of the securities loaned. Therefore, the value of the collateral held may be temporarily less than the value of the securities on loan. Lending securities entails a risk of loss to the Fund if and to the extent that the market value of the securities loaned were to increase and the borrower did not increase the collateral accordingly, and the borrower fails to return the securities. Upon the failure of the borrower to return the securities, collateral may be liquidated and the securities may be purchased on the open market to replace the loaned securities. The Fund could experience delays and costs in gaining access to the collateral. The Fund bears the risk of any deficiency in the amount of the collateral available for return to the borrower due to any loss on the collateral invested. Dividends received on cash collateral investments for securities lending transactions, which are net of compensation to counterparties, is included in Dividends from affiliates on the Statement of Operations. The aggregate value of securities out on loan is shown as a footnote on the Statement of Assets and Liabilities, if any.
K.	Foreign Currency Translations — Foreign currency is valued at the close of the NYSE based on quotations posted by banks and major currency dealers. Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at date of valuation. Purchases and sales of portfolio securities (net of foreign taxes withheld on disposition) and income items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. The Fund does not separately account for the portion of the results of operations resulting from changes in foreign exchange rates on investments and the fluctuations arising from changes in market prices of securities held. The combined results of changes in foreign exchange rates and the fluctuation of market prices on investments (net of estimated foreign tax withholding) are included with the net realized and unrealized gain or loss from investments in the Statement of Operations. Reported net realized foreign currency gains or losses arise from (i) sales of foreign currencies, (ii) currency gains or losses realized between the trade and settlement dates on securities transactions, and (iii) the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign currency gains and losses arise from changes in the fair values of assets and liabilities, other than investments in securities at fiscal period end, resulting from changes in exchange rates.
	The Fund may invest in foreign securities which may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable.
L.	Foreign Currency Contracts — The Fund may enter into foreign currency contracts to manage or minimize currency or exchange rate risk. The Fund may also enter into foreign currency contracts for the purchase or sale of a security denominated in a foreign currency in order to “lock in” the U.S. dollar price of that security. A foreign currency contract is an obligation to purchase or sell a specific currency for an agreed-upon price at a future date. The use of foreign currency contracts does not eliminate fluctuations in the price of the underlying securities the Fund owns or intends to acquire but establishes a rate of exchange in advance. Fluctuations in the value of these contracts are measured by the difference in the contract date and reporting date exchange rates and are recorded as unrealized appreciation (depreciation) until the contracts are closed. When the contracts are closed, realized gains (losses) are recorded. Realized and unrealized gains (losses) on the contracts are included in the Statement of Operations. The primary risks associated with foreign currency contracts include failure of the counterparty to meet the terms of the contract and the value of the foreign currency changing unfavorably. These risks may be in excess of the amounts reflected in the Statement of Assets and Liabilities.

AIM V.I. Global Health Care Fund

NOTE 2—Advisory Fees and Other Fees Paid to Affiliates

The Trust has entered into a master investment advisory agreement with Invesco Advisers, Inc. (the “Adviser” or “Invesco”). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Adviser based on the annual rate of the Fund’s average daily net assets as follows:

Average Net Assets	Rate
First $250 million		0	.75%
Next $250 million		0	.74%
Next $500 million		0	.73%
Next $1.5 billion		0	.72%
Next $2.5 billion		0	.71%
Next $2.5 billion		0	.70%
Next $2.5 billion		0	.69%
Over $10 billion		0	.68%

  Under the terms of a master sub-advisory agreement approved by shareholders of the Funds between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Trimark Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Funds, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide discretionary investment management services to each Fund based on the percentage of assets allocated to such Sub-Adviser(s).

  On December 31, 2009, Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc., Invesco Private Asset Management, Inc. and Invesco Global Asset Management (N.A.), Inc. merged into Invesco Institutional (N.A.), Inc. and the consolidated adviser firm was renamed Invesco Advisers, Inc.

  The Adviser has contractually agreed to waive advisory fees and/or reimburse expenses of all shares to the extent necessary to limit total annual fund operating expenses after fee waiver (excluding certain items discussed below) of Series I shares to 1.30% and Series II shares to 1.45% of average daily net assets, through at least April 30, 2011. In determining the Adviser’s obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the total annual fund operating expenses after fee waiver to exceed the numbers reflected above: (1) interest; (2) taxes; (3) dividend expense on short sales; (4) extraordinary items or non-routine items; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. The Board of Trustees or Invesco may terminate the fee waiver arrangement at any time. The Adviser did not waive fees and/or reimburse expenses during the period under this expense limitation.

  Further, the Adviser has contractually agreed, through at least June 30, 2010, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash (excluding investments of cash collateral from securities lending) in such affiliated money market funds.

  For the year ended December 31, 2009, the Adviser waived advisory fees of $8,545.

  At the request of the Trustees of the Trust, Invesco Ltd. agreed to reimburse expenses incurred by the Fund in connection with market timing matters in the AIM Funds, which may include legal, audit, shareholder reporting, communications and trustee expenses. For the year ended December 31, 2009, Invesco Ltd. did not reimburse any expenses.

  The Trust has entered into a master administrative services agreement with Invesco pursuant to which the Fund has agreed to pay Invesco a fee for costs incurred in providing accounting services and fund administrative services to the Fund and to reimburse Invesco for administrative services fees paid to insurance companies that have agreed to provide services to the participants of separate accounts. These administrative services provided by the insurance companies may include, among other things: the printing of prospectuses, financial reports and proxy statements and the delivery of the same to existing participants; the maintenance of master accounts; the facilitation of purchases and redemptions requested by the participants; and the servicing of participants’ accounts. Pursuant to such agreement, for the year ended December 31, 2009, Invesco was paid $50,000 for accounting and fund administrative services and reimbursed $365,212 for services provided by insurance companies.

  The Trust has entered into a transfer agency and service agreement with Invesco Aim Investment Services, Inc. (“IAIS”) pursuant to which the Fund has agreed to pay IAIS a fee for providing transfer agency and shareholder services to the Fund and reimburse IAIS for certain expenses incurred by IAIS in the course of providing such services. For the year ended December 31, 2009, expenses incurred under the agreement are shown in the Statement of Operations as transfer agent fees.

  The Trust has entered into a master distribution agreement with Invesco Aim Distributors, Inc. (“IADI”) to serve as the distributor for the Fund. The Trust has adopted a plan pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund’s Series II shares (the “Plan”). The Fund, pursuant to the Plan, pays IADI compensation at the annual rate of 0.25% of the Fund’s average daily net assets of Series II shares. Of the Plan payments, up to 0.25% of the average daily net assets of the Series II shares may be paid to insurance companies who furnish continuing personal shareholder services to customers who purchase and own Series II shares of the Fund. For the year ended December 31, 2009, expenses incurred under the Plan are detailed in the Statement of Operations as distribution fees.

  Certain officers and trustees of the Trust are officers and directors of Invesco, IAIS and/or IADI.

NOTE 3—Additional Valuation Information

Generally Accepted Accounting Principles (“GAAP”) defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the

AIM V.I. Global Health Care Fund

lowest priority to significant unobservable inputs (Level 3) generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment’s assigned level:

Level 1 —	Prices are determined using quoted prices in an active market for identical assets.
Level 2 —	Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk and others.
Level 3 —	Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information.

  The following is a summary of the tiered valuation input levels, as of December 31, 2009. The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.

	Level 1		Level 2		Level 3		Total
Biotechnology	$	33,121,578	$	1,928,127	$	—	$	35,049,705
Drug Retail		5,349,630		2,338,715		—		7,688,345
Health Care Distributors		2,618,250		—		—		2,618,250
Health Care Equipment		27,403,160		—		—		27,403,160
Health Care Facilities		829,600		3,252,012		—		4,081,612
Health Care Services		13,148,705		—		—		13,148,705
Health Care Supplies		6,524,407		—		—		6,524,407
Health Care Technology		1,270,646		—		—		1,270,646
Life & Health Insurance		—		1,794,815		—		1,794,815
Life Sciences Tools & Services		12,205,295		1,854,633		—		14,059,928
Managed Health Care		12,416,637		—		735,912		13,152,549
Money Market Funds		7,405,782		—		—		7,405,782
Pharmaceuticals		23,771,372		10,352,183		—		34,123,555
	$	146,065,062	$	21,520,485	$	735,912	$	168,321,459
Other Investments*		—		210,937		—		210,937
Total Investments	$	146,065,062	$	21,731,422	$	735,912	$	168,532,396

*  Other Investments include foreign currency contracts, which are included at unrealized appreciation.

NOTE 4—Derivative Investments

Effective with the beginning of the Fund’s fiscal year, the Fund has implemented new required disclosures about derivative instruments and hedging activities in accordance with GAAP. GAAP has intended to improve financial reporting about derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity’s financial position and financial performance. The enhanced disclosure has no impact on the results of operations reported in the financial statements.

Value of Derivative Instruments at Period-End

The Table below summarizes the value of the Fund’s derivative instruments, detailed by primary risk exposure, held as December 31, 2009:

	Value
Risk Exposure/ Derivative Type	Assets		Liabilities
Currency risk
Foreign currency contracts(a)	$	210,937	$	—

^(a) Values are disclosed on the Statement of Assets and Liabilities under the Foreign currency contracts.

AIM V.I. Global Health Care Fund

Effect of Derivative Instruments for the year ended December 31, 2009

The table below summarizes the gains (losses) on derivative instruments, detailed by primary risk exposure, recognized in earnings during the period:

	Location of Gain (Loss)
	on Statement
	of Operations
	Foreign Currency
	Contracts*
Realized Gain (Loss)
Currency risk	$	(763,240	)
Change in Unrealized Appreciation
Currency risk		520,716
Total	$	(242,524	)

*  The average value of foreign currency contracts outstanding during the period was $6,206,973.

Open Foreign Currency Contracts
Settlement	Contract to						Unrealized
Date	Deliver		Receive		Value		Appreciation
02/10/10	CHF	2,824,000	USD	2,786,576	$	2,728,019	$	58,557
02/10/10	EUR	2,660,800	USD	3,961,346		3,808,966		152,380
Total open foreign currency contracts							$	210,937
Closed Foreign Currency Contracts
							Realized
Closed	Contract to						Gain
Date	Deliver		Receive		Value		(Loss)
11/25/09	USD	1,040,532	GBP	624,000	$	1,034,136	$	(6,396	)
Total foreign currency contracts							$	204,541

Currency Abbreviations:
CHF	– Swiss Franc
EUR	– Euro
GBP	– British Pound Sterling
USD	– U.S. Dollar

NOTE 5—Security Transactions with Affiliated Funds

The Fund is permitted to purchase or sell securities from or to certain other AIM Funds under specified conditions outlined in procedures adopted by the Board of Trustees of the Trust. The procedures have been designed to ensure that any purchase or sale of securities by the Fund from or to another fund or portfolio that is or could be considered an affiliate by virtue of having a common investment adviser (or affiliated investment advisers), common Trustees and/or common officers complies with Rule 17a-7 of the 1940 Act. Further, as defined under the procedures, each transaction is effected at the current market price. Pursuant to these procedures, for the year ended December 31, 2009, the Fund engaged in securities purchases of $93,827 and securities sales of $354,473, which resulted in net realized gains (losses) of $(403,677).

NOTE 6—Trustees’ and Officers’ Fees and Benefits

“Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and “Trustees’ and Officers’ Fees and Benefits” also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various AIM Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees are eligible to participate in a retirement plan that provides for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former Trustees who also participate in a retirement plan and receive benefits under such plan. “Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund.

  During the year ended December 31, 2009, the Fund paid legal fees of $3,114 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A member of that firm is a Trustee of the Trust.

NOTE 7—Cash Balances

The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with The State Street Bank and Trust Company, the custodian bank. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (i) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (ii) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.

AIM V.I. Global Health Care Fund

NOTE 8—Distributions to Shareholders and Tax Components of Net Assets

Tax Character of Distributions to Shareholders Paid During the Years Ended December 31, 2009 and 2008:

	2009		2008
Ordinary income	$	477,798	$	8,773,314
Long-term capital gain		—		30,353,279
Total distributions	$	477,798	$	39,126,593

Tax Components of Net Assets at Period-End:

	2009
Net unrealized appreciation — investments	$	11,781,232
Net unrealized appreciation — other investments		5,829
Temporary book/tax differences		(38,783	)
Post-October deferrals		(581	)
Capital loss carryforward		(28,192,751	)
Shares of beneficial interest		186,814,598
Total net assets	$	170,369,544

  The difference between book-basis and tax-basis unrealized appreciation (depreciation) is due to differences in the timing of recognition of gains and losses on investments for tax and book purposes. The Fund’s net unrealized appreciation difference is attributable primarily to wash sales.

  The temporary book/tax differences are a result of timing differences between book and tax recognition of income and/or expenses. The Fund’s temporary book/tax differences are the result of the trustee deferral of compensation and retirement plan benefits.

  Capital loss carryforward is calculated and reported as of a specific date. Results of transactions and other activity after that date may affect the amount of capital loss carryforward actually available for the Fund to utilize. The ability to utilize capital loss carryforward in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.

  The Fund has a capital loss carryforward as of December 31, 2009 which expires as follows:

	Capital Loss
Expiration	Carryforward*
December 31, 2016	$	12,235,817
December 31, 2017		15,956,934
Total capital loss carryforward	$	28,192,751

*  Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code.

NOTE 9—Investment Securities

The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the year ended December 31, 2009 was $63,992,295 and $78,456,714, respectively. Cost of investments on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed Federal income tax reporting period-end.

Unrealized Appreciation (Depreciation) of Investment Securities on a Tax Basis
Aggregate unrealized appreciation of investment securities	$	21,317,551
Aggregate unrealized (depreciation) of investment securities		(9,536,319	)
Net unrealized appreciation of investment securities	$	11,781,232
Cost of investments for tax purposes is $156,540,227.

AIM V.I. Global Health Care Fund

NOTE 10—Reclassification of Permanent Differences

Primarily as a result of differing book/tax treatment of foreign currency transactions and net operating losses, on December 31, 2009, undistributed net investment income (loss) was increased by $154,312, undistributed net realized gain (loss) was decreased by $108,996 and shares of beneficial interest decreased by $45,316. This reclassification had no effect on the net assets of the Fund.

NOTE 11—Share Information

	Summary of Share Activity
	Year ended December 31,
	2009(a)						2008
	Shares			Amount			Shares			Amount
Sold:
Series I		1,972,429		$	27,454,826			2,216,216		$	47,385,882
Series II		341,255			4,410,301			477,003			9,789,685
Issued as reinvestment of dividends:
Series I		28,759			447,208			2,846,084			33,925,325
Series II		2,002			30,590			443,795			5,201,268
Reacquired:
Series I		(3,260,825	)		(43,075,570	)		(4,039,623	)		(82,281,683	)
Series II		(252,057	)		(3,401,608	)		(172,689	)		(3,470,094	)
Net increase (decrease) in share activity		(1,168,437	)	$	(14,134,253	)		1,770,786		$	10,550,383

^(a) There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 71% of the outstanding shares of the Fund. The Fund and the Fund’s principal underwriter or adviser, are parties to participation agreements with these entities whereby these entities sell units of interest in separate accounts funding variable products that are invested in the Fund. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as, securities brokerage, third party record keeping and account servicing and administrative services. The Trust has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially.

AIM V.I. Global Health Care Fund

NOTE 12—Financial Highlights

The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.

																												Ratio of			Ratio of
																												expenses			expenses
						Net gains																						to average			to average net			Ratio of net
	Net asset		Net			(losses) on						Dividends			Distributions													net assets			assets without			investment
	value,		investment			securities (both			Total from			from net			from net						Net asset					Net assets,		with fee waivers			fee waivers			income (loss)
	beginning		income			realized and			investment			investment			realized			Total			value, end		Total			end of period		and/or expenses			and/or expenses			to average			Portfolio
	of period		(loss)			unrealized)			operations			income			gains			Distributions			of period		Return(a)			(000s omitted)		absorbed			absorbed			net assets			turnover(b)
Series I
Year ended 12/31/09	$	12.47	$	(0.01	)(c)	$	3.46		$	3.45		$	(0.05	)	$	—		$	(0.05	)	$	15.87		27.67	%	$	143,648		1.13	%(d)		1.14	%(d)		(0.05	)%(d)		45	%
Year ended 12/31/08		24.06		0.07	(c)(e)		(7.16	)		(7.09	)		—			(4.50	)		(4.50	)		12.47		(28.62	)		128,563		1.12			1.13			0.34	(e)		67
Year ended 12/31/07		21.51		(0.01	)(c)		2.56			2.55			—			—			—			24.06		11.85			223,448		1.06			1.07			(0.06	)		66
Year ended 12/31/06		20.44		(0.04	)(c)		1.11			1.07			—			—			—			21.51		5.24			235,509		1.10			1.10			(0.19	)		79
Year ended 12/31/05		18.90		(0.06	)		1.60			1.54			—			—			—			20.44		8.15			257,736		1.08			1.09			(0.24	)		82
Series II
Year ended 12/31/09		12.26		(0.04	)(c)		3.40			3.36			(0.02	)		—			(0.02	)		15.60		27.39			26,722		1.38	(d)		1.39	(d)		(0.30	)(d)		45
Year ended 12/31/08		23.82		0.02	(c)(e)		(7.08	)		(7.06	)		—			(4.50	)		(4.50	)		12.26		(28.78	)		19,886		1.37			1.38			0.09	(e)		67
Year ended 12/31/07		21.36		(0.07	)(c)		2.53			2.46			—			—			—			23.82		11.52			20,817		1.31			1.32			(0.31	)		66
Year ended 12/31/06		20.34		(0.09	)(c)		1.11			1.02			—			—			—			21.36		5.01			97,646		1.35			1.35			(0.44	)		79
Year ended 12/31/05		18.86		(0.09	)		1.57			1.48			—			—			—			20.34		7.85			11		1.33			1.34			(0.49	)		82

(a)	Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Total returns do not reflect charges assessed in connection with a variable product, which if included would reduce total returns.
(b)	Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable.
(c)	Calculated using average shares outstanding.
(d)	Ratios are based on average daily net assets (000’s omitted) of $125,744 and $22,773 for Series I and Series II shares, respectively.
(e)	Net investment income (loss) per share and the ratio of net investment income (loss) to average net assets include a special cash dividend received of $5.23 per share owned of All-scripts-Misys Healthcare Solutions, Inc. on October 13, 2008. Net investment income (loss) per share and the ratio of net investment income (loss) to average net assets excluding the special dividend are $0.02 and 0.08% and $(0.03) and (0.17)% for Series I and Series II shares, respectively.

AIM V.I. Global Health Care Fund

Report of Independent Registered Public Accounting Firm

To the Board of Trustees of AIM Variable Insurance Funds

and Shareholders of AIM V.I. Global Health Care Fund:

In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of AIM V.I. Global Health Care Fund, (one of the funds constituting AIM Variable Insurance Funds, hereafter referred to as the “Fund”) at December 31, 2009, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at December 31, 2009 by correspondence with the custodian and broker, provide a reasonable basis for our opinion.

PRICEWATERHOUSECOOPERS LLP

February 10, 2010

Houston, Texas

AIM V.I. Global Health Care Fund

Calculating your ongoing Fund expenses

Example

As a shareholder of the Fund, you incur ongoing costs, including management fees; distribution and/or service fees (12b-1); and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period July 1, 2009 through December 31, 2009.

  The actual and hypothetical expenses in the examples below do not represent the effect of any fees or other expenses assessed in connection with a variable product; if they did, the expenses shown would be higher while the ending account values shown would be lower.

Actual expenses

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

Hypothetical example for comparison purposes

The table below also provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return.

  The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

  Please note that the expenses shown in the table are meant to highlight your ongoing costs. Therefore, the hypothetical information is useful in comparing ongoing costs, and will not help you determine the relative total costs of owning different funds.

							HYPOTHETICAL
							(5% annual return before
			ACTUAL				expenses)
	Beginning		Ending		Expenses		Ending		Expenses		Annualized
	Account Value		Account Value		Paid During		Account Value		Paid During		Expense
Class	(07/01/09)		(12/31/09)1		Period2		(12/31/09)		Period2		Ratio
Series I	$	1,000.00	$	1,175.80	$	6.20	$	1,019.51	$	5.75		1.13	%
Series II		1,000.00		1,174.30		7.56		1,018.25		7.02		1.38

1	The actual ending account value is based on the actual total return of the Fund for the period July 1, 2009 through December 31, 2009, after actual expenses and will differ from the hypothetical ending account value which is based on the Fund’s expense ratio and a hypothetical annual return of 5% before expenses.
2	Expenses are equal to the Fund’s annualized expense ratio as indicated above multiplied by the average account value over the period, multiplied by 184/365 to reflect the most recent fiscal half year.

AIM V.I. Global Health Care Fund

Tax Information

Form 1099-DIV, Form 1042-S and other year-end tax information provide shareholders with actual calendar year amounts that should be included in their tax returns. Shareholders should consult their tax advisors.

  The following distribution information is being provided as required by the Internal Revenue Code or to meet a specific state’s requirement.

  The Fund designates the following amounts or, if subsequently determined to be different, the maximum amount allowable for its fiscal year ended December 31, 2009:

Federal and State Income Tax
Corporate Dividends Received Deduction*	99.45%

*  The above percentage is based on ordinary income dividends paid to shareholders during the Fund’s fiscal year.

AIM V.I. Global Health Care Fund

Trustees and Officers

The address of each trustee and officer of AIM Variable Insurance Funds (the “Trust”), is 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173. Each trustee oversees 105 portfolios in the AIM Funds complex. The trustees serve for the life of the Trust, subject to their earlier death, incapacitation, resignation, retirement or removal as more specifically provided in the Trust’s organizational documents. Each officer serves for a one year term or until their successors are elected and qualified. Column two below includes length of time served with predecessor entities, if any.

	Trustee and/
Name, Year of Birth and	or Officer	Principal Occupation(s)	Other Directorship(s)
Position(s) Held with the Trust	Since	During Past 5 Years	Held by Trustee
Interested Persons
Martin L. Flanagan1 — 1960 Trustee	2007	Executive Director, Chief Executive Officer and President, Invesco Ltd. (ultimate parent of Invesco Aim and a global investment management firm); Adviser to the Board, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Trustee, The AIM Family of Funds®; Board of Governors, Investment Company Institute; and Member of Executive Board, SMU Cox School of Business	None
		Formerly: Chairman, Invesco Aim Advisors, Inc. (registered investment adviser); Director, Chairman, Chief Executive Officer and President, IVZ Inc. (holding company), INVESCO Group Services, Inc. (service provider) and Invesco North American Holdings, Inc. (holding company); Director, Chief Executive Officer and President, Invesco Holding Company Limited (parent of Invesco Aim and a global investment management firm); Director, Invesco Ltd.; Chairman and Vice Chairman, Investment Company Institute
Philip A. Taylor2 — 1954 Trustee, President and Principal Executive Officer	2006	Head of North American Retail and Senior Managing Director, Invesco Ltd.; Director, Co-Chairman, Co-President and Co- Chief Executive Officer, Invesco Advisers, inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Director, Chief Executive Officer and President, Invesco Aim Advisors, Inc. and 1371 Preferred Inc. (holding company); Director, Chairman, Chief Executive Officer and President, Invesco Aim Management Group, Inc. (financial services holding company); Director, Co-Chairman, Co-President and Co-Chief Executive Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Director and President, INVESCO Funds Group, Inc. (registered investment adviser and registered transfer agent) and AIM GP Canada Inc. (general partner for limited partnerships); Director, Invesco Aim Distributors, Inc. (registered broker dealer); Director and Chairman, Invesco Aim Investment Services, Inc. (registered transfer agent) and INVESCO Distributors, Inc. (registered broker dealer); Director, President and Chairman, INVESCO Inc. (holding company) and Invesco Canada Holdings Inc. (holding company); Chief Executive Officer, AIM Trimark Corporate Class Inc. (corporate mutual fund company) and AIM Trimark Canada Fund Inc. (corporate mutual fund company); Director and Chief Executive Officer, Invesco Trimark Ltd./Invesco Trimark Ltèe (registered investment adviser and registered transfer agent) and Invesco Trimark Dealer Inc. (registered broker dealer); Trustee, President and Principal Executive Officer, The AIM Family of Funds® (other than AIM Treasurer’s Series Trust and Short-Term Investments Trust); Trustee and Executive Vice President, The AIM Family of Funds® (AIM Treasurer’s Series Trust and Short-Term Investments Trust only); and Manager, Invesco PowerShares Capital Management LLC	None
		Formerly: Manager, Invesco PowerShares Capital Management LLC; Director, Chief Executive Officer and President, Invesco Aim Advisors, Inc.; Director, Chairman, Chief Executive Officer and President, Invesco Aim Capital Management, Inc.; President, Invesco Trimark Dealer Inc. and Invesco Trimark Ltd./Invesco Trimark Ltèe; Director and President, AIM Trimark Corporate Class Inc. and AIM Trimark Canada Fund Inc.; Senior Managing Director, Invesco Holding Company Limited; Trustee and Executive Vice President, Tax-Free Investments Trust; Director and Chairman, Fund Management Company (former registered broker dealer); President and Principal Executive Officer, The AIM Family of Funds® (AIM Treasurer’s Series Trust, Short-Term Investments Trust and Tax-Free Investments Trust only); President, AIM Trimark Global Fund Inc. and AIM Trimark Canada Fund Inc.
Independent Trustees
Bruce L. Crockett — 1944 Trustee and Chair	1993	Chairman, Crockett Technology Associates (technology consulting company)	ACE Limited (insurance company); Captaris, Inc. (unified messaging provider); and Investment Company Institute
Bob R. Baker — 1936 Trustee	2004	Retired	None
Frank S. Bayley — 1939	2001	Retired	None
Trustee		Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios)
James T. Bunch — 1942 Trustee	2004	Founder, Green, Manning & Bunch Ltd., (investment banking firm)	Board of Governors, Western Golf Association/Evans Scholars Foundation and Executive Committee, United States Golf Association
Albert R. Dowden — 1941 Trustee	2000	Director of a number of public and private business corporations, including the Boss Group, Ltd. (private investment and management); Reich & Tang Funds (registered investment company); and Homeowners of America Holding Corporation/Homeowners of America Insurance Company (property casualty company)	Board of Nature’s Sunshine Products, Inc.
		Formerly: Director, Continental Energy Services, LLC (oil and gas pipeline service); Director, CompuDyne Corporation (provider of product and services to the public security market) and Director, Annuity and Life Re (Holdings), Ltd. (reinsurance company); Director, President and Chief Executive Officer, Volvo Group North America, Inc.; Senior Vice President, AB Volvo; Director of various public and private corporations
Jack M. Fields — 1952 Trustee	1997	Chief Executive Officer, Twenty First Century Group, Inc. (government affairs company); and Owner and Chief Executive Officer, Dos Angelos Ranch, L.P. (cattle, hunting, corporate entertainment), Discovery Global Education Fund (non-profit) and Cross Timbers Quail Research Ranch (non-profit)	Administaff
		Formerly: Chief Executive Officer, Texana Timber LP (sustainable forestry company)
Carl Frischling — 1937 Trustee	1993	Partner, law firm of Kramer Levin Naftalis and Frankel LLP	Director, Reich & Tang Funds (16 portfolios)
Prema Mathai-Davis — 1950	1998	Retired	None
Trustee
Lewis F. Pennock — 1942	1993	Partner, law firm of Pennock & Cooper	None
Trustee
Larry Soll — 1942	2004	Retired	None
Trustee
Raymond Stickel, Jr. — 1944	2005	Retired	None
Trustee		Formerly: Director, Mainstay VP Series Funds, Inc. (25 portfolios)

1	Mr. Flanagan is considered an interested person of the Trust because he is an officer of the adviser to the Trust, and an officer and a director of Invesco Ltd., ultimate parent of the adviser to the Trust.
2	Mr. Taylor is considered an interested person of the Trust because he is an officer and a director of the adviser to, and a director of the principal underwriter of, the Trust.

T-1

Trustees and Officers – (continued)

	Trustee and/
Name, Year of Birth and	or Officer	Principal Occupation(s)	Other Directorship(s)
Position(s) Held with the Trust	Since	During Past 5 Years	Held by Trustee
Other Officers
Russell C. Burk — 1958 Senior Vice President and	2005	Senior Vice President and Senior Officer of The AIM Family of Funds®	N/A
Senior Officer
John M. Zerr — 1962 Senior Vice President, Chief Legal Officer and Secretary	2006	Director, Senior Vice President, Secretary and General Counsel, Invesco Aim Management Group, Inc., Senior Vice President, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Director, Senior Vice President and Secretary, Invesco Aim Distributors, Inc.; Director, Vice President and Secretary, Invesco Aim Investment Services, Inc. and INVESCO Distributors, Inc.; Director and Vice President, INVESCO Funds Group, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The AIM Family of Funds®; and Manager, Invesco PowerShares Capital Management LLC	N/A
		Formerly: Director, Senior Vice President, General Counsel and Secretary, Invesco Aim Advisors, Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco Aim Capital Management, Inc.; Chief Operating Officer and General Counsel, Liberty Ridge Capital, Inc. (an investment adviser); Vice President and Secretary, PBHG Funds (an investment company) and PBHG Insurance Series Fund (an investment company); Chief Operating Officer, General Counsel and Secretary, Old Mutual Investment Partners (a broker-dealer); General Counsel and Secretary, Old Mutual Fund Services (an administrator) and Old Mutual Shareholder Services (a shareholder servicing center); Executive Vice President, General Counsel and Secretary, Old Mutual Capital, Inc. (an investment adviser); and Vice President and Secretary, Old Mutual Advisors Funds (an investment company)
Lisa O. Brinkley — 1959 Vice President	2004	Global Compliance Director, Invesco Ltd.; Chief Compliance Officer, Invesco Aim Distributors, Inc. and Invesco Aim Investment Services, Inc.; and Vice President, The AIM Family of Funds®	N/A
		Formerly: Senior Vice President, Invesco Aim Management Group, Inc.; Senior Vice President and Chief Compliance Officer, Invesco Aim Advisors, Inc. and The AIM Family of Funds®; Vice President and Chief Compliance Officer, Invesco Aim Capital Management, Inc. and Invesco Aim Distributors, Inc.; Vice President, Invesco Aim Investment Services, Inc. and Fund Management Company
Kevin M. Carome — 1956 Vice President	2003	General Counsel, Secretary and Senior Managing Director, Invesco Ltd.; Director, Invesco Holding Company Limited and INVESCO Funds Group, Inc.; Director and Executive Vice President, IVZ, Inc., Invesco Group Services, Inc., Invesco North American Holdings, Inc. and Invesco Investments (Bermuda) Ltd.; Director and Secretary, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); and Vice President, The AIM Family of Funds® Formerly: Senior Managing Director and Secretary, Invesco North American Holdings, Inc.; Vice President and Secretary, IVZ, Inc. and Invesco Group Services, Inc.; Senior Managing Director and Secretary, Invesco Holding Company Limited; Director, Senior Vice President, Secretary and General Counsel, Invesco Aim Management Group, Inc. and Invesco Aim Advisors, Inc.; Senior Vice President, Invesco Aim Distributors, Inc.; Director, General Counsel and Vice President, Fund Management Company; Vice President, Invesco Aim Capital Management, Inc. and Invesco Aim Investment Services, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The AIM Family of Funds®; Director and Vice President, INVESCO Distributors, Inc.; and Chief Executive Officer and President, INVESCO Funds Group, Inc.	N/A
Sheri Morris — 1964 Vice President, Treasurer and Principal Financial Officer	1999	Vice President, Treasurer and Principal Financial Officer, The AIM Family of Funds®; and Vice President, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.) Formerly: Vice President, Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.; Assistant Vice President and Assistant Treasurer, The AIM Family of Funds® and Assistant Vice President, Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A
Karen Dunn Kelley — 1960 Vice President	1993	Head of Invesco’s World Wide Fixed Income and Cash Management Group; Senior Vice President, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Executive Vice President, Invesco Aim Distributors, Inc.; Senior Vice President, Invesco Aim Management Group, Inc.; and Director, Invesco Mortgage Capital Inc.; Vice President, The AIM Family of Funds® (other than AIM Treasurer’s Series Trust and Short-Term Investments Trust); and President and Principal Executive Officer, The AIM Family of Funds® (AIM Treasurer’s Series Trust and Short-Term Investments Trust only)	N/A
		Formerly: Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Director of Cash Management and Senior Vice President, Invesco Aim Advisors, Inc. and Invesco Aim Capital Management, Inc.; President and Principal Executive Officer, Tax-Free Investments Trust; Director and President, Fund Management Company; Chief Cash Management Officer, Director of Cash Management, Senior Vice President, and Managing Director, Invesco Aim Capital Management, Inc.; Director of Cash Management, Senior Vice President, and Vice President, Invesco Aim Advisors, Inc. and The AIM Family of Funds® (AIM Treasurer’s Series Trust, Short-Term Investments Trust and Tax-Free Investments Trust only)
Lance A. Rejsek — 1967 Anti-Money Laundering Compliance Officer	2005	Anti-Money Laundering Compliance Officer, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Invesco Aim Distributors, Inc., Invesco Aim Investment Services, Inc., and The AIM Family of Funds®	N/A
		Formerly: Anti-Money Laundering Compliance Officer, Fund Management Company, Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.
Todd L. Spillane — 1958 Chief Compliance Officer	2006	Senior Vice President, Invesco Aim Management Group, Inc.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Chief Compliance Officer, The AIM Family of Funds®, INVESCO Private Capital Investments, Inc. (holding company), Invesco Private Capital, Inc. (registered investment adviser) and Invesco Senior Secured Management, Inc. (registered investment adviser); Vice President, Invesco Aim Distributors, Inc. and Invesco Aim Investment Services, Inc. Formerly: Senior Vice President and Chief Compliance Officer, Invesco Aim Advisors, Inc. and Invesco Aim Capital Management, Inc.; Chief Compliance Officer, Invesco Global Asset Management (N.A.), Inc.; Vice President, Invesco Aim Capital Management, Inc. and Fund Management Company	N/A

The Statement of Additional Information of the Trust includes additional information about the Fund’s Trustees and is available upon request, without charge, by calling 1.800.959.4246. Please refer to the Fund’s prospectus for information on the Fund’s sub-advisers.

Office of the Fund	Investment Adviser	Distributor	Auditors
11 Greenway Plaza, Suite 100	Invesco Advisers, Inc.	Invesco Aim Distributors, Inc.	PricewaterhouseCoopers LLP
Houston, TX 77046-1173	1555 Peachtree Street, N.E.	11 Greenway Plaza, Suite 100	1201 Louisiana Street, Suite 2900
	Atlanta, GA 30309	Houston, TX 77046-1173	Houston, TX 77002-5678
Counsel to the Fund	Counsel to the	Transfer Agent	Custodian
Stradley Ronon Stevens & Young, LLP	Independent Trustees	Invesco Aim Investment Services, Inc.	State Street Bank and Trust Company
2600 One Commerce Square	Kramer, Levin, Naftalis & Frankel LLP	P.O. Box 4739	225 Franklin
Philadelphia, PA 19103	1177 Avenue of the Americas	Houston, TX 77210-4739	Boston, MA 02110-2801
	New York, NY 10036-2714

T-2

AIM V.I. Global Real Estate Fund

Annual Report to Shareholders ■ December 31, 2009

The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter-ends. For the second and fourth quarters, the lists appear in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The Fund’s Form N-Q filings are available on the SEC website, sec.gov. Copies of the Fund’s Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers for the Fund are 811-07452 and 033-57340. The Fund’s most recent portfolio holdings, as filed on Form N-Q, have also been made available to insurance companies issuing variable annuity contracts and variable life insurance policies (“variable products”) that invest in the Fund.

A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, from our Client Services department at 800 410 4246 or on the Invesco Aim website, invescoaim.com. On the home page, scroll down and click on Proxy Policy. The information is also available on the SEC website, sec.gov.

Information regarding how the Fund voted proxies related to its portfolio securities during the 12 months ended June 30, 2009, is available at our website, invescoaim.com. Click the About Us tab at the top of the home page; click Legal Information; and then click Proxy Voting Search. The information is also available on the SEC website, sec.gov.

Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Aim Distributors, Inc. is the U.S. distributor for Invesco Ltd’s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd.

This report must be accompanied or preceded by a currently effective Fund prospectus and variable product prospectus, which contain more complete information, including sales charges and expenses. Investors should read each carefully before investing.

Invesco Aim Distributors, Inc.

NOT FDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEE

Management’s Discussion of Fund Performance

Performance summary

The year covered by this report was characterized by two dramatically different market environments. In early 2009, equity markets declined steeply as credit markets froze and risk premiums rose dramatically in response to the global recession. As central banks coordinated easing efforts and companies cut costs aggressively, access to funding improved and market valuations in both the credit and equity markets recovered from their March lows. Real estate securities world-wide rallied as a result of improvements in the economy, and more importantly, improved capital availability.

     For the year ended December 31, 2009, the Fund’s Series I shares, excluding variable product issuer charges, outperformed the Fund’s broad market index, the MSCI World Index. However, the Fund underperformed the FTSE EPRA/NAREIT Developed Real Estate Index, the Fund’s style-specific index, due primarily to security selection in Japan, Hong Kong and Singapore.

     Your Fund’s long-term performance appears later in this report.

Fund vs. Indexes

Total returns, 12/31/08 to 12/31/09, excluding variable product issuer charges.

If variable product issuer charges were included, returns would be lower.

Series I Shares	31.53	%
Series II Shares	31.10
MSCI World Index▼(Broad Market Index)	29.99
FTSE EPRA/NAREIT Developed Real Estate Index■ (Style-Specific Index)	38.26
Lipper VUF Real Estate Funds Category Average▼ (Peer Group)	31.12

^▼Lipper Inc.; ■ Invesco, Bloomberg L.P.

How we invest

Your Fund holds primarily real estate investment trusts (REITs) and other property-related securities from the U.S. and abroad whose value is driven by tangible assets. Our goal is to create a global Fund focused on total return that will perform at or above index levels with comparable levels of risk. Our investment strategy focuses on identifying U.S. and non-U.S. property types we believe will benefit from long-term sector trends. We use a fundamentals-driven investment process, including property market cycle analysis, property evaluation and management and structure review to identify securities with:

■ Quality underlying properties.

■ Solid management teams and flexible balance sheets.

■ Attractive valuations relative to other investment alternatives.

     We attempt to manage risk by diversifying property types and geographic locations as well as limiting the size of any one holding.

     We consider selling a holding when:

■ Relative valuation falls below desired levels.

■ Risk/return relationships change significantly.

■ Company fundamentals (property type, geography or management) change.

■ A more attractive investment opportunity is identified.

Market conditions and your Fund

Though the beginning of the year was marked by headlines claiming economic “Armageddon,” the U.S. economy began to show signs that the contraction was moderating. Economic data indicated that the rampant decline in business spending and consumption that occurred in 2008 and early 2009 may have eased. Given signs that the economic downturn may be moderating, equity and credit markets improved. In addition, financial markets benefited from various government programs introduced to improve bank balance sheets and reduce credit spreads.

     A variety of emergency fiscal and monetary initiatives of governments and central banks appeared to have succeeded in averting a global economic collapse. However, high unemployment levels and the long-term implications of the sovereign debt burden for Western economies continued to cause concern. Additionally, businesses and households still had a considerable way to go in reducing their debt levels.

     Given this environment, global real estate securities, as measured by the FTSE EPRA/NAREIT Developed Real Estate Index, and the Fund produced gains for the year and outperformed the broad market, measured by the MSCI World Index.^1,2

     The Fund underperformed its style-specific benchmark, the FTSE EPRA/NAREIT Developed Real Estate Index, owing to a relatively defensive positioning which helped during the first quarter of 2009, but hurt as equity markets rallied beginning in March.² During this rally, stocks of lower quality companies generally outperformed higher quality stocks. Many companies with higher leverage and/or greater potential

Portfolio Composition
By country

United States		35.6	%
Hong Kong		16.7
Japan		10.6
Australia		9.9
United Kingdom		6.7
France		4.5
Singapore		4.5
Canada		3.0
Netherlands		2.6
Countries each less than 2.0% of portfolio		3.7
Money Market Funds Plus Other Assets Less Liabilities		2.2
Top 10 Equity Holdings*
1. Sun Hung Kai Properties Ltd.		5.4	%
2. Westfield Group		3.9
3. Simon Property Group, Inc.		3.8
4. Unibail-Rodamco S.E.		3.0
5. Mitsubishi Estate Co. Ltd.		2.9
6. Mitsui Fudosan Co., Ltd.		2.8
7. Hongkong Land Holdings Ltd.		2.2
8. Stockland		2.2
9. Equity Residential		2.1
10. Vornado Realty Trust		2.1
Total Net Assets	$140.0 million
Total Number of Holdings*		108

The Fund’s holdings are subject to change, and there is no assurance that the Fund will continue to hold any particular security.

* Excluding money market fund holdings.

AIM V.I. Global Real Estate Fund

fundamental declines outperformed as a measure of stability returned to the financial markets amid indications of stabilizing economic data and improved credit spreads/availability of capital. Specifically, security selection in Japan, Hong Kong and Singapore detracted from the Fund’s relative performance during the year. Conversely, security selection and underweight exposure in the U.S. aided the Fund’s relative performance.

     Top contributors to Fund performance included several Hong Kong-domiciled companies, including Sun Hung Kai Properties and Hang Lung Properties. The emerging Asian economies continued to fare best with inventory rebuilding becoming evident in the more export-orientated economies, including China. Sun Hung Kai Properties is one of the largest property companies in Hong Kong, specializing in high quality residential and commercial projects. Hang Lung Properties is one of the largest Hong Kong developers, owning a large development and investment portfolio in Hong Kong and China. The company possesses a strong balance sheet, recurring income base and residential inventory to fund growth in China. Additionally, Hang Lung’s management team has a favorable and established track record.

     Japan- and U.K.-domiciled companies dominated the top detractors from Fund performance for the year. Nippon Building Fund, Japan’s largest real estate investment trust with a focus on Tokyo office buildings, and Mitsubishi Estate, Japan’s second-largest real estate developer, hurt Fund performance.

     The current level of uncertainty in the investment marketplace supports a view that successfully managing real estate exposures requires an emphasis on companies with longer than average lease terms, higher quality assets and tenant rosters, and flexible balance sheets. We expect to maintain a well-diversified portfolio across all property types and regions. We also believe the best prospects for relative outperformance are based on a combination of relative fundamentals and stock valuations.

     Given that markets experienced a strong recovery in 2009, we would like to caution investors against making investment decisions based on short-term performance. As always, we recommend that you consult a financial adviser to discuss your individual financial program. We thank you for your continued investment in AIM V.I. Global Real Estate Fund.

1     Lipper Inc.

2     Invesco, Bloomberg L.P.

The views and opinions expressed in management’s discussion of Fund performance are those of Invesco Advisers, Inc. These views and opinions are subject to change at any time based on factors such as market and economic conditions. These views and opinions may not be relied upon as investment advice or recommendations, or as 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 Invesco Advisers, Inc. 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.

See important Fund and index disclosures later in this report.

Joe Rodriguez, Jr.

Senior portfolio manager, is lead manager of AIM V.I. Global Real Estate Fund. He is head of real estate securities for Invesco Real Estate, where he oversees all phases of the unit, including securities research and administration. Mr. Rodriguez began his investment career in 1983 and joined Invesco in 1990. He earned his B.B.A. in economics and finance and his M.B.A. in finance from Baylor University.

Mark Blackburn

Chartered Financial Analyst, portfolio manager, is manager of AIM V.I. Global Real Estate Fund. He joined Invesco in 1998. Mr. Blackburn earned a B.S. in accounting from Louisiana State University and an M.B.A. from Southern Methodist University. He is a Certified Public Accountant.

James Cowen

Portfolio manager, is manager of AIM V.I. Global Real Estate Fund. Mr. Cowen has worked in the real estate industry since 1997 and joined Invesco in 2001. He earned a Master of Town and Country Planning degree from the University of Manchester and a Master of Philosophy degree in land economy from Cambridge University.

Paul Curbo

Chartered Financial Analyst, portfolio manager, is manager of AIM V.I. Global Real Estate Fund. He joined Invesco in 1998. Mr. Curbo earned a B.B.A. in finance from the University of Texas at Dallas.

James Trowbridge

Portfolio manager, is manager of AIM V.I. Global Real Estate Fund. He joined Invesco in 1989. Mr. Trowbridge earned his B.A. in finance from Indiana University.

Ping Ying Wang

Chartered Financial Analyst, portfolio manager, is manager of AIM V.I. Global Real Estate Fund. She earned a B.S. in international finance from the People’s University of China and a Ph.D. in finance from the University of Texas at Dallas.

Assisted by the Real Estate Team

AIM V.I. Global Real Estate Fund

Your Fund’s Long-Term Performance

Results of a $10,000 Investment – Oldest Share Class since Inception
Fund and index data from 3/31/98

1     Invesco, Bloomberg L.P.

2     Lipper Inc.

Past performance cannot guarantee comparable future results.

     This chart, which is a logarithmic chart, presents the fluctuations in the value of the Fund and its indexes. We believe that a logarithmic chart is more effective than other types of charts in illustrating changes in value during the early years shown in the chart. The vertical axis, the one that indicates the dollar value of an investment, is constructed with each segment representing a percent change in the value of the investment. In this chart, each segment represents a doubling, or 100% change, in the value of the investment. In other words, the space between $5,000 and $10,000 is the same size as the space between $10,000 and $20,000, and so on.

Average Annual Total Returns
As of 12/31/09

Series I Shares
Inception (3/31/98)	7.86	%
10 Years	11.17
5 Years	2.30
1 Year	31.53
Series II Shares
10 Years	10.91	%
5 Years	2.04
1 Year	31.10

Series II shares’ inception date is April 30, 2004. Returns since that date are historical. All other returns are the blended returns of the historical performance of Series II shares since their inception and the restated historical performance of Series I shares (for periods prior to inception of Series II shares) adjusted to reflect the Rule 12b-1 fees applicable to Series II shares. The inception date of Series I shares is March 31, 1998. The performance of the Fund’s Series I and Series II share classes will differ primarily due to different class expenses.

     The performance data quoted represent past performance and cannot guarantee comparable future results; current performance may be lower or higher. Please contact your variable product issuer or financial adviser for the most recent month-end variable product performance. Performance figures reflect Fund expenses, reinvested distributions and changes in net asset value. Investment return and principal value will fluctuate so that you may have a gain or loss when you sell shares.

     The total annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 1.17% and 1.42%, respectively. The expense ratios presented above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

     AIM V.I. Global Real Estate Fund, a series portfolio of AIM Variable Insurance Funds, is currently offered through insurance companies issuing variable products. You cannot purchase shares of the Fund directly. Performance figures given represent the Fund and are not intended to reflect actual variable product values. They do not reflect sales charges, expenses and fees assessed in connection with a variable product. Sales charges, expenses and fees, which are determined by the variable product issuers, will vary and will lower the total return.

     The most recent month-end performance data at the Fund level, excluding variable product charges, is available on the Invesco Aim automated information line, 866 702 4402. As mentioned above, for the most recent month-end performance including variable product charges, please contact your variable product issuer or financial adviser.

     Had the adviser not waived fees and/ or reimbursed expenses in the past, performance would have been lower.

AIM V.I. Global Real Estate Fund

AIM V.I. Global Real Estate Fund’s investment objective is high total return through growth of capital and current income.

■ Unless otherwise stated, information presented in this report is as of December 31, 2009, and is based on total net assets.

■ Unless otherwise noted, all data provided by Invesco.

Principal risks of investing in the Fund

Because the Fund concentrates its investments in REITs and other companies related to the real estate industry, the value of your shares may rise and fall more than the value of shares of a fund that invests in a broader range of companies.

     Credit risk is the risk of loss on an investment due to the deterioration of an issuer’s financial health. Such a deterioration of financial health may result in a reduction of the credit rating of the issuer’s securities and may lead to the issuer’s inability to honor its contractual obligations, including making timely payment of interest and principal.

     Prices of equity securities change in response to many factors, including the historical and prospective earnings of the issuer, the value of its assets, general economic conditions, interest rates, investor perceptions and market liquidity.

     Foreign securities have additional risks, including exchange rate changes, political and economic upheaval, relative lack of information, relatively low market liquidity, and the potential lack of strict financial and accounting controls and standards.

     Lower rated securities may be more susceptible to real or perceived adverse economic and competitive industry conditions, and the secondary markets in which lower rated securities are traded may be less liquid than higher grade securities. The loans in which the Fund may invest are typically noninvestment-grade and involve a greater risk of default on interest and principal payments and of price changes due to the changes in the credit quality of the issuer.

     Interest rate risk refers to the risk that bond prices generally fall as interest rates rise and vice versa.

     Since a large percentage of the Fund’s assets may be invested in securities of a limited number of companies, each investment has a greater effect on the Fund’s overall performance, and any change in the value of those securities could significantly affect the value of your investment in the Fund.

     There is no guarantee that the investment techniques and risk analysis used by the Fund’s portfolio managers will produce the desired results.

     The prices of securities held by the Fund may decline in response to market risks.

     Because the Fund concentrates its assets in the real estate industry, an investment in the Fund will be closely linked to the performance of the real estate markets.

     The Fund may use enhanced investment techniques such as short sales. Short sales carry the risk of buying a security back at a higher price at which the Fund’s exposure is unlimited.

     The Fund may invest in obligations issued by agencies and instrumentalities of the U.S. government that may vary in the level of support they receive from the U.S. government. The U.S. government may choose not to provide financial support to U.S.-government-sponsored agencies or instrumentalities if it is not legally obligated to do so. In this case, if the issuer defaulted, the fund holding securities of such an issuer might not be able to recover its investment from the U.S. government.

About indexes used in this report

The MSCI World Index^SM is an unmanaged index considered representative of stocks of developed countries.

     The FTSE EPRA/NAREIT Developed Real Estate Index is an unmanaged index considered representative of global real estate companies and REITs.

     The Lipper VUF Real Estate Funds Category Average represents an average of all of the variable insurance underlying funds in the Lipper Real Estate Funds category.

     The Fund is not managed to track the performance of any particular index, including the indexes defined here, and consequently, the performance of the Fund may deviate significantly from the performance of the indexes.

     A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group reflects fund expenses; performance of a market index does not.

Other information

The Chartered Financial Analyst^® (CFA^®) designation is globally recognized and attests to a charterholder’s success in a rigorous and comprehensive study program in the field of investment management and research analysis.

     CPA^® and Certified Public Accountant^® are trademarks owned by the American Institute of Certified Public Accountants.

     The returns shown in management’s discussion of Fund performance are based on net asset values calculated for shareholder transactions. Generally accepted accounting principles require adjustments to be made to the net assets of the Fund at period end for financial reporting purposes, and as such, the net asset values for shareholder transactions and the returns based on those net asset values may differ from the net asset values and returns reported in the Financial Highlights. Additionally, the returns and net asset values shown throughout this report are at the Fund level only and do not include variable product issuer charges. If such charges were included, the total returns would be lower.

     Property type classifications used in this report are generally according to FTSE EPRA/NAREIT Global Real Estate Index, which is exclusively owned by the FTSE Group, the European Public Real Estate Association (EPRA), the National Association of Real Estate Investment Trusts (NAREIT) and Euronext Indices BV.

AIM V.I. Global Real Estate Fund

Schedule of Investments

December 31, 2009

	Shares		Value
Foreign Real Estate Investment Trusts, Common Stocks & Other Equity Interests–97.81%
Australia–9.94%
CFS Retail Property Trust		1,150,557	$	1,948,621
Commonwealth Property Office Fund		434,370		375,631
Dexus Property Group		1,877,293		1,417,554
Goodman Group		3,067,203		1,726,125
Stockland		865,978		3,043,235
Westfield Group		485,088		5,409,898
				13,921,064
Austria–0.47%
Conwert Immobilien Invest S.E.(a)		53,257		651,111
Canada–2.96%
Canadian REIT		31,300		807,031
Cominar REIT		20,300		372,761
Morguard REIT		38,000		474,706
Primaris Retail REIT		37,500		576,209
RioCan REIT		101,300		1,915,067
				4,145,774
China–0.78%
Agile Property Holdings Ltd.		474,000		687,106
Guangzhou R&F Properties Co. Ltd.–Class H		68,400		119,404
KWG Property Holding Ltd.		378,000		288,257
				1,094,767
Finland–0.45%
Citycon Oyj		149,632		629,785
France–4.52%
Gecina S.A.		7,861		849,686
ICADE		6,412		608,970
Klepierre		15,837		643,663
Unibail-Rodamco S.E.		19,237		4,232,835
				6,335,154
Germany–0.40%
Deutsche Euroshop AG		16,596		562,370
Hong Kong–16.73%
China Overseas Land & Investment Ltd.		1,026,301		2,148,839
China Resources Land Ltd.		701,800		1,579,715
Glorious Property Holdings Ltd.(a)		397,000		178,114
Hang Lung Properties Ltd.		471,000		1,840,097
Henderson Land Development Co. Ltd.		324,000		2,414,039
Hongkong Land Holdings Ltd.		630,000		3,100,388
Kerry Properties Ltd.		263,900		1,332,452
Link REIT (The)		318,500		810,468
New World Development Co., Ltd.		458,000		934,715
Sino Land Co. Ltd.		478,000		922,766
Sun Hung Kai Properties Ltd.		505,000		7,493,076
Wharf (Holdings) Ltd. (The)		116,000		663,269
				23,417,938
Japan–10.55%
AEON Mall Co., Ltd.		23,800		460,708
Frontier Real Estate Investment Corp.		23		163,042
Japan Real Estate Investment Corp.		136		999,130
Japan Retail Fund Investment Corp.		96		429,966
Kenedix Realty Investment Corp.		91		248,257
Mitsubishi Estate Co. Ltd.		258,000		4,095,634
Mitsui Fudosan Co., Ltd.		232,000		3,897,187
Nippon Building Fund Inc.		132		1,000,934
Nomura Real Estate Holdings, Inc.		30,900		456,394
Sumitomo Realty & Development Co., Ltd.		139,000		2,607,853
United Urban Investment Corp.		77		405,241
				14,764,346
Luxembourg–0.36%
GAGFAH S.A.		38,535		351,411
ProLogis European Properties		25,168		154,831
				506,242
Malta–0.00%
BGP Holdings PLC(a)		3,053,090		0
Netherlands–2.59%
Corio N.V.		12,423		848,153
Eurocommercial Properties N.V.		23,103		952,535
VastNed Retail N.V.		12,367		811,487
Wereldhave N.V.		10,677		1,019,519
				3,631,694
Singapore–4.53%
Ascendas REIT		591,779		926,356
CapitaCommercial Trust		1,065,000		880,946
Capitaland Ltd.		726,000		2,149,475
CapitaMall Trust		1,006,550		1,275,766
City Developments Ltd.		50,000		407,692
Suntec REIT		546,000		522,024
Yanlord Land Group Ltd.		121,000		185,114
				6,347,373

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

AIM V.I. Global Real Estate Fund

	Shares		Value
Sweden–1.21%
Castellum A.B.		136,822	$	1,379,522
Hufvudstaden A.B.		41,027		309,773
				1,689,295
United Kingdom–6.70%
Big Yellow Group PLC(a)		115,823		660,816
British Land Co. PLC		225,731		1,731,043
Derwent London PLC		31,456		664,669
Great Portland Estates PLC		135,826		630,121
Hammerson PLC		157,159		1,067,701
Hansteen Holdings PLC		415,807		540,873
Land Securities Group PLC		71,240		781,062
Segro PLC		297,816		1,644,608
Shaftesbury PLC		131,945		836,999
Unite Group PLC(a)		169,620		820,884
				9,378,776
United States–35.62%
Acadia Realty Trust		34,441		581,020
Alexandria Real Estate Equities, Inc.		12,600		810,054
AMB Property Corp.		30,500		779,275
American Campus Communities, Inc.		8,700		244,470
AvalonBay Communities, Inc.		18,642		1,530,695
Boston Properties, Inc.		38,200		2,562,074
Brookfield Properties Corp.		36,678		445,978
Camden Property Trust		25,882		1,096,620
DCT Industrial Trust Inc.		82,000		411,640
Digital Realty Trust, Inc.		48,300		2,428,524
EastGroup Properties, Inc.		14,800		566,544
Equity Residential		87,277		2,948,217
Essex Property Trust, Inc.		17,700		1,480,605
Federal Realty Investment Trust		9,200		623,024
HCP, Inc.		37,448		1,143,662
Health Care REIT, Inc.		41,467		1,837,817
Highwoods Properties, Inc.		28,300		943,805
Host Hotels & Resorts Inc.(a)		209,259		2,442,052
Kilroy Realty Corp.		28,100		861,827
LaSalle Hotel Properties		6,700		142,241
Liberty Property Trust		40,700		1,302,807
Macerich Co. (The)		32,288		1,160,754
Mack-Cali Realty Corp.		28,100		971,417
Mid-America Apartment Communities, Inc.		5,200		251,056
Nationwide Health Properties, Inc.		49,671		1,747,426
Pebblebrook Hotel Trust(a)		12,132		267,025
ProLogis		89,014		1,218,602
Public Storage		33,100		2,695,995
Regency Centers Corp.		36,700		1,286,702
Retail Opportunity Investments Corp.(a)		33,319		336,855
Senior Housing Properties Trust		52,088		1,139,165
Simon Property Group, Inc.		66,910		5,339,418
SL Green Realty Corp.		35,208		1,768,850
Starwood Hotels & Resorts Worldwide, Inc.		4,391		160,579
Tanger Factory Outlet Centers, Inc.		22,400		873,376
Ventas, Inc.		52,200		2,283,228
Vornado Realty Trust		41,326		2,890,340
Washington REIT		10,584		291,589
				49,865,328
Total Foreign Real Estate Investment Trusts, Common Stocks & Other Equity Interests (Cost $113,872,574)				136,941,017
Money Market Funds–1.41%
Liquid Assets Portfolio–Institutional Class(b)		988,373		988,373
Premier Portfolio–Institutional Class(b)		988,373		988,373
Total Money Market Funds (Cost $1,976,746)				1,976,746
TOTAL INVESTMENTS–99.22% (Cost $115,849,320)				138,917,763
OTHER ASSETS LESS LIABILITIES–0.78%				1,092,421
NET ASSETS–100.00%			$	140,010,184

Investment Abbreviations:

REIT – Real Estate Investment Trust

Notes to Schedule of Investments:

(a)	Non-income producing security.
(b)	The money market fund and the Fund are affiliated by having the same investment adviser.

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

AIM V.I. Global Real Estate Fund

Statement of Assets and Liabilities

December 31, 2009

Assets:
Investments, at value (Cost $113,872,574)	$	136,941,017
Investments in affiliated money market funds, at value and cost		1,976,746
Total investments, at value (Cost $115,849,320)		138,917,763
Cash		125,686
Foreign currencies, at value (Cost $426,525)		424,745
Receivables for:
Investments sold		135,390
Fund shares sold		169,545
Dividends		513,329
Investment for trustee deferred compensation and retirement plans		9,266
Total assets		140,295,724
Liabilities:
Payables for:
Investments purchased		83,902
Fund shares reacquired		35,206
Accrued fees to affiliates		89,318
Accrued other operating expenses		58,210
Trustee deferred compensation and retirement plans		18,904
Total liabilities		285,540
Net assets applicable to shares outstanding	$	140,010,184
Net assets consist of:
Shares of beneficial interest	$	163,594,668
Undistributed net investment income		3,301,174
Undistributed net realized gain (loss)		(49,954,500	)
Unrealized appreciation		23,068,842
	$	140,010,184
Net Assets:
Series I	$	128,224,384
Series II	$	11,785,800
Shares outstanding, $0.001 par value per share, unlimited number of shares authorized:
Series I		10,564,127
Series II		987,736
Series I:
Net asset value per share	$	12.14
Series II:
Net asset value per share	$	11.93

Statement of Operations

For the year ended December 31, 2009

Investment income:
Dividends (net of foreign withholding taxes of $(233,955))	$	3,951,884
Dividends from affiliated money market funds (includes securities lending income of $86,892)		95,667
Total investment income		4,047,551
Expenses:
Advisory fees		787,607
Administrative services fees		298,973
Custodian fees		126,311
Distribution fees — Series II		17,329
Transfer agent fees		24,192
Trustees’ and officers’ fees and benefits		23,208
Other		66,873
Total expenses		1,344,493
Less: Fees waived and reimbursed expenses		(6,844	)
Net expenses		1,337,649
Net investment income		2,709,902
Realized and unrealized gain (loss) from:
Net realized gain (loss) from:
Investment securities		(20,271,182	)
Foreign currencies		(64,995	)
		(20,336,177	)
Change in net unrealized appreciation of:
Investment securities		50,497,748
Foreign currencies		754
		50,498,502
Net realized and unrealized gain		30,162,325
Net increase in net assets resulting from operations	$	32,872,227

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

AIM V.I. Global Real Estate Fund

Statement of Changes in Net Assets

For the years ended December 31, 2009 and 2008

	2009			2008
Operations:
Net investment income	$	2,709,902		$	3,064,226
Net realized gain (loss)		(20,336,177	)		(27,452,774	)
Change in net unrealized appreciation (depreciation)		50,498,502			(45,616,452	)
Net increase (decrease) in net assets resulting from operations		32,872,227			(70,005,000	)
Distributions to shareholders from net investment income:
Series I		—			(7,313,873	)
Series II		—			(346,827	)
Total distributions from net investment income		—			(7,660,700	)
Distributions to shareholders from net realized gains:
Series I		—			(11,303,629	)
Series II		—			(540,744	)
Total distributions from net realized gains		—			(11,844,373	)
Share transactions-net:
Series I		15,146,597			25,400,434
Series II		5,205,429			4,476,456
Net increase in net assets resulting from share transactions		20,352,026			29,876,890
Net increase (decrease) in net assets		53,224,253			(59,633,183	)
Net assets:
Beginning of year		86,785,931			146,419,114
End of year (includes undistributed net investment income of $3,301,174 and $(321,137), respectively)	$	140,010,184		$	86,785,931

Notes to Financial Statements

December 31, 2009

NOTE 1—Significant Accounting Policies

AIM V.I. Global Real Estate Fund (the “Fund”) is a series portfolio of AIM Variable Insurance Funds (the “Trust”). The Trust is a Delaware statutory trust registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end series management investment company consisting of twenty-one separate portfolios, (each constituting a “Fund”). The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Matters affecting each Fund or class will be voted on exclusively by the shareholders of such Fund or class. Current Securities and Exchange Commission (“SEC”) guidance, however, requires participating insurance companies offering separate accounts to vote shares proportionally in accordance with the instructions of the contract owners whose investments are funded by shares of each Fund or class.

  The Fund’s investment objective is high total return through growth of capital and current income.

  The Fund currently offers two classes of shares, Series I and Series II, both of which are offered to insurance company separate accounts funding variable annuity contracts and variable life insurance policies (“variable products”).

  The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements.

A.

Security Valuations — Securities, including restricted securities, are valued according to the following policy.

A security listed or traded on an exchange (except convertible bonds) is valued at its last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales or official closing price on a particular day, the security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based on prices furnished by independent pricing services or market makers. When such securities are valued by an independent pricing service they may be considered fair valued. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean between the last bid and ask prices from the exchange on which they are principally traded. Options not listed on an exchange are valued by an independent source at the mean between the last bid and ask prices. For purposes of determining net asset value per share, futures and option contracts generally are valued 15 minutes after the close of the customary trading session of the New York Stock Exchange (“NYSE”).

AIM V.I. Global Real Estate Fund

	Investments in open-end and closed-end registered investment companies that do not trade on an exchange are valued at the end of day net asset value per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded.
	Debt obligations (including convertible bonds) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution-size trading in similar groups of securities, developments related to specific securities, dividend rate, yield, quality, type of issue, coupon rate, maturity, individual trading characteristics and other market data. Short-term obligations, including commercial paper, having 60 days or less to maturity are recorded at amortized cost which approximates value. Debt securities are subject to interest rate and credit risks. In addition, all debt securities involve some risk of default with respect to interest and/or principal payments.
	Foreign securities (including foreign exchange contracts) are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the NYSE. If market quotations are available and reliable for foreign exchange traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that are significant and make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economical upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
	Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities and Corporate Loans. The mean between the last bid and asked prices may be used to value debt obligations other than Corporate Loans.
	Securities for which market quotations are not readily available or are unreliable are valued at fair value as determined in good faith by or under the supervision of the Trust’s officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a security’s fair value.
	Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
B.	Securities Transactions and Investment Income — Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income is recorded on the accrual basis from settlement date. Dividend income is recorded on the ex-dividend date.
	The Fund may periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain/loss for investments no longer held and as unrealized gain/loss for investments still held.
	Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the realized and unrealized net gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the Fund’s net asset value and, accordingly, they reduce the Fund’s total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in the Statement of Operations and Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the adviser.
	The Fund allocates income and realized and unrealized capital gains and losses to a class based on the relative net assets of each class.
	The Fund recharacterizes distributions received from REIT investments based on information provided by the REIT into the following categories: ordinary income, long-term and short-term capital gains, and return of capital. If information is not available on a timely basis from the REIT, the recharacterization will be based on available information which may include the previous year’s allocation. If new or additional information becomes available from the REIT at a later date, a recharacterization will be made in the following year. The Fund records as dividend income the amount recharacterized as ordinary income and as realized gain the amount recharacterized as capital gain in the Statement of Operations, and the amount recharacterized as return of capital as a reduction to the cost of investments in the Statement of Assets and Liabilities. These recharacterizations are reflected in the accompanying financial statements.
C.	Country Determination — For the purposes of making investment selection decisions and presentation in the Schedule of Investments, the investment adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuer’s securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted.

AIM V.I. Global Real Estate Fund

D.	Distributions — Distributions from income and net realized capital gain, if any, are generally paid to separate accounts of participating insurance companies annually and recorded on ex-dividend date.
E.	Federal Income Taxes — The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code necessary to qualify as a regulated investment company and to distribute substantially all of the Fund’s taxable earnings to shareholders. As such, the Fund will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements.
	The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.
F.	Expenses — Fees provided for under the Rule 12b-1 plan of a particular class of the Fund and which are directly attributable to that class are charged to the operations of such class. All other expenses are allocated among the classes based on relative net assets.
G.	Accounting Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print, which is generally 45 days from the period-end date.
H.	Indemnifications — Under the Trust’s organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Fund’s servicing agreements, that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote.
I.	Other Risks — The Fund’s investments are concentrated in a comparatively narrow segment of the economy. Consequently, the Fund may tend to be more volatile than other mutual funds, and the value of the Fund’s investments may tend to rise and fall more rapidly.
	The Fund concentrates its assets in the real estate industry, an investment in the fund will be closely linked to the performance of the real estate markets. Property values may fall due to increasing vacancies or declining rents resulting from economic, legal, cultural or technological developments.
J.	Securities Lending — The Fund may lend portfolio securities having a market value up to one-third of the Fund’s total assets. Such loans are secured by collateral equal to no less than the market value of the loaned securities determined daily by the securities lending provider. Such collateral will be cash or debt securities issued or guaranteed by the U.S. Government or any of its sponsored agencies. Cash collateral received in connection with these loans is invested in short-term money market instruments or affiliated money market funds and is shown as such on the Schedule of Investments. It is the Fund’s policy to obtain additional collateral from or return excess collateral to the borrower by the end of the next business day, following the valuation date of the securities loaned. Therefore, the value of the collateral held may be temporarily less than the value of the securities on loan. Lending securities entails a risk of loss to the Fund if and to the extent that the market value of the securities loaned were to increase and the borrower did not increase the collateral accordingly, and the borrower fails to return the securities. Upon the failure of the borrower to return the securities, collateral may be liquidated and the securities may be purchased on the open market to replace the loaned securities. The Fund could experience delays and costs in gaining access to the collateral. The Fund bears the risk of any deficiency in the amount of the collateral available for return to the borrower due to any loss on the collateral invested. Dividends received on cash collateral investments for securities lending transactions, which are net of compensation to counterparties, is included in Dividends from affiliates on the Statement of Operations. The aggregate value of securities out on loan is shown as a footnote on the Statement of Assets and Liabilities, if any.
K.	Foreign Currency Translations — Foreign currency is valued at the close of the NYSE based on quotations posted by banks and major currency dealers. Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at date of valuation. Purchases and sales of portfolio securities (net of foreign taxes withheld on disposition) and income items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. The Fund does not separately account for the portion of the results of operations resulting from changes in foreign exchange rates on investments and the fluctuations arising from changes in market prices of securities held. The combined results of changes in foreign exchange rates and the fluctuation of market prices on investments (net of estimated foreign tax withholding) are included with the net realized and unrealized gain or loss from investments in the Statement of Operations. Reported net realized foreign currency gains or losses arise from (i) sales of foreign currencies, (ii) currency gains or losses realized between the trade and settlement dates on securities transactions, and (iii) the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign currency gains and losses arise from changes in the fair values of assets and liabilities, other than investments in securities at fiscal period end, resulting from changes in exchange rates.
	The Fund may invest in foreign securities which may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable.
L.	Foreign Currency Contracts — The Fund may enter into foreign currency contracts to manage or minimize currency or exchange rate risk. The Fund may also enter into foreign currency contracts for the purchase or sale of a security denominated in a foreign currency in order to “lock in” the U.S. dollar price of that security. A foreign currency contract is an obligation to purchase or sell a specific currency for an agreed-upon price at a future date. The use of foreign currency contracts does not eliminate fluctuations in the price of the underlying securities the Fund owns or intends to acquire but establishes a rate of exchange in advance. Fluctuations in the value of these contracts are measured by the difference in the contract date and reporting date exchange rates and are recorded as unrealized appreciation (depreciation) until the contracts are closed. When the contracts are closed, realized gains (losses) are recorded. Realized and unrealized gains (losses) on the contracts are included in the Statement of Operations. The primary risks

AIM V.I. Global Real Estate Fund

associated with foreign currency contracts include failure of the counterparty to meet the terms of the contract and the value of the foreign currency changing unfavorably. These risks may be in excess of the amounts reflected in the Statement of Assets and Liabilities.

NOTE 2—Advisory Fees and Other Fees Paid to Affiliates

The Trust has entered into a master investment advisory agreement with Invesco Advisers, Inc. (the “Adviser” or “Invesco”). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Adviser based on the annual rate of the Fund’s average daily net assets as follows:

Average Net Assets	Rate
First $250 million		0	.75%
Next $250 million		0	.74%
Next $500 million		0	.73%
Next $1.5 billion		0	.72%
Next $2.5 billion		0	.71%
Next $2.5 billion		0	.70%
Next $2.5 billion		0	.69%
Over $10 billion		0	.68%

  Under the terms of a master sub-advisory agreement approved by shareholders of the Funds between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Trimark Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Funds, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide discretionary investment management services to each Fund based on the percentage of assets allocated to such Sub-Adviser(s).

  On December 31, 2009, Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc., Invesco Private Asset Management, Inc. and Invesco Global Asset Management (N.A.), Inc. merged into Invesco Institutional (N.A.), Inc. and the consolidated adviser firm was renamed Invesco Advisers, Inc.

  The Adviser has contractually agreed to waive advisory fees and/or reimburse expenses of all shares to the extent necessary to limit total annual fund operating expenses after fee waiver (excluding certain items discussed below) of Series I shares to 1.30% and Series II shares to 1.45% of average daily net assets, through at least April 30, 2011. In determining the Adviser’s obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the total annual fund operating expenses after fee waiver to exceed the numbers reflected above: (1) interest; (2) taxes; (3) dividend expense on short sales; (4) extraordinary items or non-routine items; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. The Board of Trustees or Invesco may terminate the fee waiver arrangement at any time. The Adviser did not waive fees/or reimburse expenses during the period under this expense limitation.

  Further, the Adviser has contractually agreed, through at least June 30, 2010, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash (excluding investments of cash collateral from securities lending) in such affiliated money market funds.

  For the year ended December 31, 2009, the Adviser waived advisory fees of $2,760 and reimbursed class level expenses of $4,084 for Series II shares.

  At the request of the Trustees of the Trust, Invesco Ltd. agreed to reimburse expenses incurred by the Fund in connection with market timing matters in the AIM Funds, which may include legal, audit, shareholder reporting, communications and trustee expenses. For the year ended December 31, 2009, Invesco Ltd. did not reimburse any expenses.

  The Trust has entered into a master administrative services agreement with Invesco pursuant to which the Fund has agreed to pay Invesco a fee for costs incurred in providing accounting services and fund administrative services to the Fund and to reimburse Invesco for administrative services fees paid to insurance companies that have agreed to provide services to the participants of separate accounts. These administrative services provided by the insurance companies may include, among other things: the printing of prospectuses, financial reports and proxy statements and the delivery of the same to existing participants; the maintenance of master accounts; the facilitation of purchases and redemptions requested by the participants; and the servicing of participants’ accounts. Pursuant to such agreement, for the year ended December 31, 2009, Invesco was paid $50,000 for accounting and fund administrative services and reimbursed $248,973 for services provided by insurance companies.

  The Trust has entered into a transfer agency and service agreement with Invesco Aim Investment Services, Inc. (“IAIS”) pursuant to which the Fund has agreed to pay IAIS a fee for providing transfer agency and shareholder services to the Fund and reimburse IAIS for certain expenses incurred by IAIS in the course of providing such services. For the year ended December 31, 2009, expenses incurred under the agreement are shown in the Statement of Operations as transfer agent fees.

  The Trust has entered into a master distribution agreement with Invesco Aim Distributors, Inc. (“IADI”) to serve as the distributor for the Fund. The Trust has adopted a plan pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund’s Series II shares (the “Plan”). The Fund, pursuant to the Plan, pays IADI compensation at the annual rate of 0.25% of the Fund’s average daily net assets of Series II shares. Of the Plan payments, up to 0.25% of the average daily net assets of the Series II shares may be paid to insurance companies who furnish continuing personal shareholder services to customers who purchase and own Series II shares of the Fund. For the year ended December 31, 2009, expenses incurred under the Plan are detailed in the Statement of Operations as distribution fees.

  Certain officers and trustees of the Trust are officers and directors of Invesco, IAIS and/or IADI.

AIM V.I. Global Real Estate Fund

NOTE 3—Additional Valuation Information

Generally Accepted Accounting Principles (“GAAP”) defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3) generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment’s assigned level:

Level 1 —	Prices are determined using quoted prices in an active market for identical assets.
Level 2 —	Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk and others.
Level 3 —	Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information.

  The following is a summary of the tiered valuation input levels, as of December 31, 2009. The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.

	Level 1		Level 2		Level 3		Total
Australia	$	—	$	13,921,064	$	—	$	13,921,064
Austria		651,111		—		—		651,111
Canada		4,145,774		—		—		4,145,774
China		—		1,094,767		—		1,094,767
Dominican Republic		—		—		0		0
Finland		629,785		—		—		629,785
France		4,876,498		1,458,656		—		6,335,154
Germany		562,370		—		—		562,370
Hong Kong				23,417,938		—		23,417,938
Luxembourg		351,411		154,831		—		506,242
Japan		7,342,204		7,422,142		—		14,764,346
Netherlands		3,631,694		—		—		3,631,694
Singapore		—		6,347,373		—		6,347,373
Sweden		—		1,689,295		—		1,689,295
United Kingdom		1,991,878		7,386,898		—		9,378,776
United States		51,842,074		—		—		51,842,074
Total Investments	$	76,024,799	$	62,892,964	$		$	138,917,763

NOTE 4—Trustees’ and Officers’ Fees and Benefits

“Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and “Trustees’ and Officers’ Fees and Benefits” also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various AIM Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees are eligible to participate in a retirement plan that provides for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former Trustees who also participate in a retirement plan and receive benefits under such plan. “Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund.

  During the year ended December 31, 2009, the Fund paid legal fees of $2,984 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A member of that firm is a Trustee of the Trust.

NOTE 5—Cash Balances

The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with The State Street Bank and Trust Company, the custodian bank. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (i) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (ii) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.

AIM V.I. Global Real Estate Fund

NOTE 6—Distributions to Shareholders and Tax Components of Net Assets

Tax Character of Distributions to Shareholders Paid During the Years Ended December 31, 2009 and 2008:

	2009		2008
Ordinary income	$	—	$	9,179,502
Long-term capital gain		—		10,325,571
Total distributions	$	—	$	19,505,073

Tax Components of Net Assets at Period-End:

	2009
Undistributed ordinary income	$	7,160,852
Net unrealized appreciation — investments		10,841,880
Net unrealized appreciation — other investments		399
Temporary book/tax differences		(19,457	)
Post-October deferrals		(251,453	)
Capital loss carryforward		(41,316,705	)
Shares of beneficial interest		163,594,668
Total net assets	$	140,010,184

  The difference between book-basis and tax-basis unrealized appreciation (depreciation) is due to differences in the timing of recognition of gains and losses on investments for tax and book purposes. The Fund’s net unrealized appreciation difference is attributable primarily to wash sales and the recognition for tax purposes, of unrealized gains or passive foreign investment companies.

  The temporary book/tax differences are a result of timing differences between book and tax recognition of income and/or expenses. The Fund’s temporary book/tax differences are the result of the trustee deferral of compensation and retirement plan benefits.

  Capital loss carryforward is calculated and reported as of a specific date. Results of transactions and other activity after that date may affect the amount of capital loss carryforward actually available for the Fund to utilize. The ability to utilize capital loss carryforward in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.

  The Fund has a capital loss carryforward as of December 31, 2009 which expires as follows:

	Capital Loss
Expiration	Carryforward*
December 31, 2016	$	18,695,360
December 31, 2017		22,621,345
Total capital loss carryforward	$	41,316,705

*  Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code.

NOTE 7—Investment Securities

The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the year ended December 31, 2009 was $95,564,077 and $73,633,533, respectively. Cost of investments on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed Federal income tax reporting period-end.

Unrealized Appreciation (Depreciation) of Investment Securities on a Tax Basis
Aggregate unrealized appreciation of investment securities	$	13,982,126
Aggregate unrealized (depreciation) of investment securities		(3,140,246	)
Net unrealized appreciation of investment securities	$	10,841,880
Cost of investments for tax purposes is $128,075,883.

NOTE 8—Reclassification of Permanent Differences

Primarily as a result of differing book/tax treatment of foreign currency transactions and passive foreign investment companies, on December 31, 2009, undistributed net investment income was increased by $912,409; undistributed net realized gain (loss) was decreased by $899,962 and shares of beneficial interest decreased by $12,447. This reclassification had no effect on the net assets of the Fund.

AIM V.I. Global Real Estate Fund

NOTE 9—Share Information

	Summary of Share Activity
	Year ended December 31,
	2009(a)						2008
	Shares			Amount			Shares			Amount
Sold:
Series I		4,597,449		$	43,715,169			2,881,953		$	52,755,460
Series II		617,087			6,098,786			287,801			4,439,666
Issued as reinvestment of dividends:
Series I		—			—			2,120,444			18,617,502
Series II		—			—			102,609			887,571
Reacquired:
Series I		(2,977,162	)		(28,568,572	)		(2,630,426	)		(45,972,528	)
Series II		(91,409	)		(893,357	)		(50,546	)		(850,781	)
Net increase in share activity		2,145,965		$	20,352,026			2,711,835		$	29,876,890

^(a) There are entities that are record owners of more than 5% of the outstanding shares of the Fund that owns 52% of the outstanding shares of the Fund. The Fund and the Fund’s principal underwriter or adviser, are parties to participation agreements with these entities whereby these entities sell units of interest in separate accounts funding variable products that are invested in the Fund. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and or Invesco affiliates including but not limited to services such as, securities brokerage, third party record keeping and account servicing and administrative services. The Trust has no knowledge as to whether all or any portion of the shares owned of record by there entities are also owned beneficially.

NOTE 10—Financial Highlights

The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.

																											Ratio of			Ratio of
					Net gains																						expenses			expenses
					(losses)																						to average			to average net			Ratio of net
	Net asset				on securities						Dividends			Distributions													net assets			assets without			investment
	value,		Net		(both			Total from			from net			from net						Net asset					Net assets,		with fee waivers			fee waivers			income
	beginning		investment		realized and			investment			investment			realized			Total			value, end		Total			end of period		and/or expenses			and/or expenses			to average			Portfolio
	of period		income(a)		unrealized)			operations			income			gains			Distributions			of period		Return(b)			(000s omitted)		absorbed			absorbed			net assets			turnover(c)
Series I
Year ended 12/31/09	$	9.23	$	0.26	$	2.65		$	2.91		$	—		$	—		$	—		$	12.14		31.53	%	$	128,224		1.26	%(d)		1.26	%(d)		2.59	%(d)		72	%
Year ended 12/31/08		21.88		0.44		(10.35	)		(9.91	)		(1.08	)		(1.66	)		(2.74	)		9.23		(44.65	)		82,582		1.17			1.17			2.51			62
Year ended 12/31/07		28.74		0.38		(1.52	)		(1.14	)		(1.69	)		(4.03	)		(5.72	)		21.88		(5.54	)		143,773		1.13			1.22			1.31			57
Year ended 12/31/06		21.06		0.33		8.61			8.94			(0.28	)		(0.98	)		(1.26	)		28.74		42.60			192,617		1.15			1.30			1.32			84
Year ended 12/31/05		19.13		0.38		2.34			2.72			(0.22	)		(0.57	)		(0.79	)		21.06		14.24			99,977		1.21			1.36			1.91			51
Series II
Year ended 12/31/09		9.10		0.24		2.59			2.83			—			—			—			11.93		31.10			11,786		1.45	(d)		1.51	(d)		2.40	(d)		72
Year ended 12/31/08		21.66		0.36		(10.19	)		(9.83	)		(1.07	)		(1.66	)		(2.73	)		9.10		(44.72	)		4,203		1.42			1.42			2.26			62
Year ended 12/31/07		28.57		0.29		(1.49	)		(1.20	)		(1.68	)		(4.03	)		(5.71	)		21.66		(5.76	)		2,646		1.38			1.47			1.06			57
Year ended 12/31/06		20.98		0.27		8.58			8.85			(0.28	)		(0.98	)		(1.26	)		28.57		42.30			311		1.40			1.55			1.07			84
Year ended 12/31/05		19.12		0.34		2.31			2.65			(0.22	)		(0.57	)		(0.79	)		20.98		13.85			62		1.45			1.61			1.67			51

(a)	Calculated using average shares outstanding.
(b)	Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Total returns do not reflect charges assessed in connection with a variable product, which if included would reduce total returns.
(c)	Portfolio turnover is calculated at the fund level and is not annualized for period less than one year, if applicable.
(d)	Ratios are based on average daily net assets (000’s omitted) of $98,083 and $6,931 for Series I and Series II shares, respectively.

AIM V.I. Global Real Estate Fund

Report of Independent Registered Public Accounting Firm

To the Board of Trustees of AIM Variable Insurance Funds

and Shareholders of AIM V.I. Global Real Estate Fund:

In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of AIM V.I. Global Real Estate Fund (one of the funds constituting AIM Variable Insurance Funds, hereafter referred to as the “Fund”) at December 31, 2009, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at December 31, 2009 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.

PRICEWATERHOUSECOOPERS LLP

February 10, 2010

Houston, Texas

AIM V.I. Global Real Estate Fund

Calculating your ongoing Fund expenses

Example

As a shareholder of the Fund, you incur ongoing costs, including management fees; distribution and/or service fees (12b-1); and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period July 1, 2009 through December 31, 2009.

  The actual and hypothetical expenses in the examples below do not represent the effect of any fees or other expenses assessed in connection with a variable product; if they did, the expenses shown would be higher while the ending account values shown would be lower.

Actual expenses

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

Hypothetical example for comparison purposes

The table below also provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return.

  The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

  Please note that the expenses shown in the table are meant to highlight your ongoing costs. Therefore, the hypothetical information is useful in comparing ongoing costs, and will not help you determine the relative total costs of owning different funds.

							HYPOTHETICAL
			ACTUAL				(5% annual return before expenses)
	Beginning		Ending		Expenses		Ending		Expenses		Annualized
	Account Value		Account Value		Paid During		Account Value		Paid During		Expense
Class	(07/01/09)		(12/31/09)1		Period2		(12/31/09)		Period2		Ratio
Series I	$	1,000.00	$	1,272.50	$	7.16	$	1,018.90	$	6.36		1.25	%
Series II		1,000.00		1,271.90		8.30		1,017.90		7.38		1.45

1	The actual ending account value is based on the actual total return of the Fund for the period July 1, 2009 through December 31, 2009, after actual expenses and will differ from the hypothetical ending account value which is based on the Fund’s expense ratio and a hypothetical annual return of 5% before expenses.
2	Expenses are equal to the Fund’s annualized expense ratio as indicated above multiplied by the average account value over the period, multiplied by 184/365 to reflect the most recent fiscal half year.

AIM V.I. Global Real Estate Fund

Trustees and Officers

The address of each trustee and officer of AIM Variable Insurance Funds (the “Trust”), is 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173. Each trustee oversees 105 portfolios in the AIM Funds complex. The trustees serve for the life of the Trust, subject to their earlier death, incapacitation, resignation, retirement or removal as more specifically provided in the Trust’s organizational documents. Each officer serves for a one year term or until their successors are elected and qualified. Column two below includes length of time served with predecessor entities, if any.

	Trustee and/
Name, Year of Birth and	or Officer	Principal Occupation(s)	Other Directorship(s)
Position(s) Held with the Trust	Since	During Past 5 Years	Held by Trustee
Interested Persons
Martin L. Flanagan1 — 1960 Trustee	2007	Executive Director, Chief Executive Officer and President, Invesco Ltd. (ultimate parent of Invesco Aim and a global investment management firm); Adviser to the Board, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Trustee, The AIM Family of Funds®; Board of Governors, Investment Company Institute; and Member of Executive Board, SMU Cox School of Business	None
		Formerly: Chairman, Invesco Aim Advisors, Inc. (registered investment adviser); Director, Chairman, Chief Executive Officer and President, IVZ Inc. (holding company), INVESCO Group Services, Inc. (service provider) and Invesco North American Holdings, Inc. (holding company); Director, Chief Executive Officer and President, Invesco Holding Company Limited (parent of Invesco Aim and a global investment management firm); Director, Invesco Ltd.; Chairman and Vice Chairman, Investment Company Institute
Philip A. Taylor2 — 1954 Trustee, President and Principal Executive Officer	2006	Head of North American Retail and Senior Managing Director, Invesco Ltd.; Director, Co-Chairman, Co-President and Co- Chief Executive Officer, Invesco Advisers, inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Director, Chief Executive Officer and President, Invesco Aim Advisors, Inc. and 1371 Preferred Inc. (holding company); Director, Chairman, Chief Executive Officer and President, Invesco Aim Management Group, Inc. (financial services holding company); Director, Co-Chairman, Co-President and Co-Chief Executive Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Director and President, INVESCO Funds Group, Inc. (registered investment adviser and registered transfer agent) and AIM GP Canada Inc. (general partner for limited partnerships); Director, Invesco Aim Distributors, Inc. (registered broker dealer); Director and Chairman, Invesco Aim Investment Services, Inc. (registered transfer agent) and INVESCO Distributors, Inc. (registered broker dealer); Director, President and Chairman, INVESCO Inc. (holding company) and Invesco Canada Holdings Inc. (holding company); Chief Executive Officer, AIM Trimark Corporate Class Inc. (corporate mutual fund company) and AIM Trimark Canada Fund Inc. (corporate mutual fund company); Director and Chief Executive Officer, Invesco Trimark Ltd./Invesco Trimark Ltèe (registered investment adviser and registered transfer agent) and Invesco Trimark Dealer Inc. (registered broker dealer); Trustee, President and Principal Executive Officer, The AIM Family of Funds® (other than AIM Treasurer’s Series Trust and Short-Term Investments Trust); Trustee and Executive Vice President, The AIM Family of Funds® (AIM Treasurer’s Series Trust and Short-Term Investments Trust only); and Manager, Invesco PowerShares Capital Management LLC	None
		Formerly: Manager, Invesco PowerShares Capital Management LLC; Director, Chief Executive Officer and President, Invesco Aim Advisors, Inc.; Director, Chairman, Chief Executive Officer and President, Invesco Aim Capital Management, Inc.; President, Invesco Trimark Dealer Inc. and Invesco Trimark Ltd./Invesco Trimark Ltèe; Director and President, AIM Trimark Corporate Class Inc. and AIM Trimark Canada Fund Inc.; Senior Managing Director, Invesco Holding Company Limited; Trustee and Executive Vice President, Tax-Free Investments Trust; Director and Chairman, Fund Management Company (former registered broker dealer); President and Principal Executive Officer, The AIM Family of Funds® (AIM Treasurer’s Series Trust, Short-Term Investments Trust and Tax-Free Investments Trust only); President, AIM Trimark Global Fund Inc. and AIM Trimark Canada Fund Inc.
Independent Trustees
Bruce L. Crockett — 1944 Trustee and Chair	1993	Chairman, Crockett Technology Associates (technology consulting company)	ACE Limited (insurance company); Captaris, Inc. (unified messaging provider); and Investment Company Institute
Bob R. Baker — 1936 Trustee	2004	Retired	None
Frank S. Bayley — 1939 Trustee	2001	Retired	None
		Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios)
James T. Bunch — 1942 Trustee	2004	Founder, Green, Manning & Bunch Ltd., (investment banking firm)	Board of Governors, Western Golf Association/Evans Scholars Foundation and Executive Committee, United States Golf Association
Albert R. Dowden — 1941 Trustee	2000	Director of a number of public and private business corporations, including the Boss Group, Ltd. (private investment and management); Reich & Tang Funds (registered investment company); and Homeowners of America Holding Corporation/Homeowners of America Insurance Company (property casualty company)	Board of Nature’s Sunshine Products, Inc.
		Formerly: Director, Continental Energy Services, LLC (oil and gas pipeline service); Director, CompuDyne Corporation (provider of product and services to the public security market) and Director, Annuity and Life Re (Holdings), Ltd. (reinsurance company); Director, President and Chief Executive Officer, Volvo Group North America, Inc.; Senior Vice President, AB Volvo; Director of various public and private corporations
Jack M. Fields — 1952 Trustee	1997	Chief Executive Officer, Twenty First Century Group, Inc. (government affairs company); and Owner and Chief Executive Officer, Dos Angelos Ranch, L.P. (cattle, hunting, corporate entertainment), Discovery Global Education Fund (non-profit) and Cross Timbers Quail Research Ranch (non-profit)	Administaff
		Formerly: Chief Executive Officer, Texana Timber LP (sustainable forestry company)
Carl Frischling — 1937 Trustee	1993	Partner, law firm of Kramer Levin Naftalis and Frankel LLP	Director, Reich & Tang Funds (16 portfolios)
Prema Mathai-Davis — 1950 Trustee	1998	Retired	None
Lewis F. Pennock — 1942 Trustee	1993	Partner, law firm of Pennock & Cooper	None
Larry Soll — 1942 Trustee	2004	Retired	None
Raymond Stickel, Jr. — 1944 Trustee	2005	Retired	None
		Formerly: Director, Mainstay VP Series Funds, Inc. (25 portfolios)

1	Mr. Flanagan is considered an interested person of the Trust because he is an officer of the adviser to the Trust, and an officer and a director of Invesco Ltd., ultimate parent of the adviser to the Trust.
2	Mr. Taylor is considered an interested person of the Trust because he is an officer and a director of the adviser to, and a director of the principal underwriter of, the Trust.

T-1

Trustees and Officers – (continued)

	Trustee and/
Name, Year of Birth and	or Officer	Principal Occupation(s)	Other Directorship(s)
Position(s) Held with the Trust	Since	During Past 5 Years	Held by Trustee
Other Officers
Russell C. Burk — 1958 Senior Vice President and Senior Officer	2005	Senior Vice President and Senior Officer of The AIM Family of Funds®	N/A
John M. Zerr — 1962 Senior Vice President, Chief Legal Officer and Secretary	2006	Director, Senior Vice President, Secretary and General Counsel, Invesco Aim Management Group, Inc., Senior Vice President, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Director, Senior Vice President and Secretary, Invesco Aim Distributors, Inc.; Director, Vice President and Secretary, Invesco Aim Investment Services, Inc. and INVESCO Distributors, Inc.; Director and Vice President, INVESCO Funds Group, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The AIM Family of Funds®; and Manager, Invesco PowerShares Capital Management LLC	N/A
		Formerly: Director, Senior Vice President, General Counsel and Secretary, Invesco Aim Advisors, Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco Aim Capital Management, Inc.; Chief Operating Officer and General Counsel, Liberty Ridge Capital, Inc. (an investment adviser); Vice President and Secretary, PBHG Funds (an investment company) and PBHG Insurance Series Fund (an investment company); Chief Operating Officer, General Counsel and Secretary, Old Mutual Investment Partners (a broker-dealer); General Counsel and Secretary, Old Mutual Fund Services (an administrator) and Old Mutual Shareholder Services (a shareholder servicing center); Executive Vice President, General Counsel and Secretary, Old Mutual Capital, Inc. (an investment adviser); and Vice President and Secretary, Old Mutual Advisors Funds (an investment company)
Lisa O. Brinkley — 1959 Vice President	2004	Global Compliance Director, Invesco Ltd.; Chief Compliance Officer, Invesco Aim Distributors, Inc. and Invesco Aim Investment Services, Inc.; and Vice President, The AIM Family of Funds®	N/A
		Formerly: Senior Vice President, Invesco Aim Management Group, Inc.; Senior Vice President and Chief Compliance Officer, Invesco Aim Advisors, Inc. and The AIM Family of Funds®; Vice President and Chief Compliance Officer, Invesco Aim Capital Management, Inc. and Invesco Aim Distributors, Inc.; Vice President, Invesco Aim Investment Services, Inc. and Fund Management Company
Kevin M. Carome — 1956 Vice President	2003	General Counsel, Secretary and Senior Managing Director, Invesco Ltd.; Director, Invesco Holding Company Limited and INVESCO Funds Group, Inc.; Director and Executive Vice President, IVZ, Inc., Invesco Group Services, Inc., Invesco North American Holdings, Inc. and Invesco Investments (Bermuda) Ltd.; Director and Secretary, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); and Vice President, The AIM Family of Funds®	N/A
		Formerly: Senior Managing Director and Secretary, Invesco North American Holdings, Inc.; Vice President and Secretary, IVZ, Inc. and Invesco Group Services, Inc.; Senior Managing Director and Secretary, Invesco Holding Company Limited; Director, Senior Vice President, Secretary and General Counsel, Invesco Aim Management Group, Inc. and Invesco Aim Advisors, Inc.; Senior Vice President, Invesco Aim Distributors, Inc.; Director, General Counsel and Vice President, Fund Management Company; Vice President, Invesco Aim Capital Management, Inc. and Invesco Aim Investment Services, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The AIM Family of Funds®; Director and Vice President, INVESCO Distributors, Inc.; and Chief Executive Officer and President, INVESCO Funds Group, Inc.
Sheri Morris — 1964 Vice President, Treasurer and Principal Financial Officer	1999	Vice President, Treasurer and Principal Financial Officer, The AIM Family of Funds®; and Vice President, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.)	N/A
		Formerly: Vice President, Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.; Assistant Vice President and Assistant Treasurer, The AIM Family of Funds® and Assistant Vice President, Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.
Karen Dunn Kelley — 1960 Vice President	1993	Head of Invesco’s World Wide Fixed Income and Cash Management Group; Senior Vice President, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Executive Vice President, Invesco Aim Distributors, Inc.; Senior Vice President, Invesco Aim Management Group, Inc.; and Director, Invesco Mortgage Capital Inc.; Vice President, The AIM Family of Funds® (other than AIM Treasurer’s Series Trust and Short-Term Investments Trust); and President and Principal Executive Officer, The AIM Family of Funds® (AIM Treasurer’s Series Trust and Short-Term Investments Trust only)	N/A
		Formerly: Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Director of Cash Management and Senior Vice President, Invesco Aim Advisors, Inc. and Invesco Aim Capital Management, Inc.; President and Principal Executive Officer, Tax-Free Investments Trust; Director and President, Fund Management Company; Chief Cash Management Officer, Director of Cash Management, Senior Vice President, and Managing Director, Invesco Aim Capital Management, Inc.; Director of Cash Management, Senior Vice President, and Vice President, Invesco Aim Advisors, Inc. and The AIM Family of Funds® (AIM Treasurer’s Series Trust, Short-Term Investments Trust and Tax-Free Investments Trust only)
Lance A. Rejsek — 1967 Anti-Money Laundering Compliance Officer	2005	Anti-Money Laundering Compliance Officer, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Invesco Aim Distributors, Inc., Invesco Aim Investment Services, Inc., and The AIM Family of Funds®	N/A
		Formerly: Anti-Money Laundering Compliance Officer, Fund Management Company, Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.
Todd L. Spillane — 1958 Chief Compliance Officer	2006	Senior Vice President, Invesco Aim Management Group, Inc.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Chief Compliance Officer, The AIM Family of Funds®, INVESCO Private Capital Investments, Inc. (holding company), Invesco Private Capital, Inc. (registered investment adviser) and Invesco Senior Secured Management, Inc. (registered investment adviser); Vice President, Invesco Aim Distributors, Inc. and Invesco Aim Investment Services, Inc.	N/A
		Formerly: Senior Vice President and Chief Compliance Officer, Invesco Aim Advisors, Inc. and Invesco Aim Capital Management, Inc.; Chief Compliance Officer, Invesco Global Asset Management (N.A.), Inc.; Vice President, Invesco Aim Capital Management, Inc. and Fund Management Company

The Statement of Additional Information of the Trust includes additional information about the Fund’s Trustees and is available upon request, without charge, by calling 1.800.959.4246. Please refer to the Fund’s prospectus for information on the Fund’s sub-advisers.

Office of the Fund	Investment Adviser	Distributor	Auditors
11 Greenway Plaza, Suite 100	Invesco Advisers, Inc.	Invesco Aim Distributors, Inc.	PricewaterhouseCoopers LLP
Houston, TX 77046-1173	1555 Peachtree Street, N.E.	11 Greenway Plaza, Suite 100	1201 Louisiana Street, Suite 2900
	Atlanta, GA 30309	Houston, TX 77046-1173	Houston, TX 77002-5678
Counsel to the Fund Stradley Ronon Stevens & Young, LLP	Counsel to the Independent Trustees	Transfer Agent Invesco Aim Investment Services, Inc.	Custodian State Street Bank and Trust Company
2600 One Commerce Square	Kramer, Levin, Naftalis & Frankel LLP	P.O. Box 4739	225 Franklin
Philadelphia, PA 19103	1177 Avenue of the Americas	Houston, TX 77210-4739	Boston, MA 02110-2801
	New York, NY 10036-2714

T-2

AIM V.I. Government Securities Fund

Annual Report to Shareholders § December 31, 2009

The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter-ends. For the second and fourth quarters, the lists appear in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The Fund’s Form N-Q filings are available on the SEC website, sec.gov. Copies of the Fund’s Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers for the Fund are 811-07452 and 033-57340. The Fund’s most recent portfolio holdings, as filed on Form N-Q, have also been made available to insurance companies issuing variable annuity contracts and variable life insurance policies (“variable products”) that invest in the Fund.

A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, from our Client Services department at 800 410 4246 or on the Invesco Aim website, invescoaim.com. On the home page, scroll down and click on Proxy Policy. The information is also available on the SEC website, sec.gov.

Information regarding how the Fund voted proxies related to its portfolio securities during the 12 months ended June 30, 2009, is available at our website, invescoaim.com. Click the About Us tab at the top of the home page; click Legal Information; and then click Proxy Voting Search. The information is also available on the SEC website, sec.gov.

Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Aim Distributors, Inc. is the U.S. distributor for Invesco Ltd.’s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd.

This report must be accompanied or preceded by a currently effective Fund prospectus and variable product prospectus, which contain more complete information, including sales charges and expenses. Investors should read each carefully before investing.

Invesco Aim Distributors, Inc.

NOT FDIC INSURED ½ MAY LOSE VALUE ½ NO BANK GUARANTEE

Management’s Discussion of Fund Performance

Performance summary

For the year ended December 31, 2009, Series I shares of AIM V.I. Government Securities Fund, excluding variable product issuer charges, outperformed the Fund’s style-specific benchmark and underperformed the Fund’s broad market index. Our investments in agency mortgage-backed securities (MBS) was a major contributor to performance relative to our style-specific index. The Fund’s underperformance of its broad market index can be attributed to the Fund’s inability to invest in corporate credit securities and commercial MBS.

     The Fund’s long-term performance appears later in this report.

Fund vs. Indexes

Total returns, 12/31/08 to 12/31/09, excluding variable product issuer charges.

If variable product issuer charges were included, returns would be lower.

Series I Shares	-0.01	%
Series II Shares	-0.26
Barclays Capital U.S. Aggregate Index6 (Broad Market Index)	5.93
Barclays Capital U.S. Government Index6 (Style-Specific Index)	-2.20
Lipper VUF General U.S. Government Funds Index6 (Peer Group Index)	6.34

⁶Lipper Inc.

How we invest

We invest primarily in debt securities issued, guaranteed or backed by the U.S. government or its agencies and instrumentalities. These securities include: U.S. Treasury notes and bonds, U.S. agency debentures and agency mortgage-backed securities (MBS). We may also invest in derivative instruments such as Treasury futures and options on Treasury futures to manage Fund duration.

     Consistent with our investment philosophy and belief that markets are increasingly complex, we use a distributed approach to decision making where specialists closest to the information have authority to make decisions. Investment decisions are made continuously and shared instantly for timely implementation in our portfolios. This is true for fundamental research decisions, macro decisions and security selection decisions, all made by specialists.

     We record and measure the performance of every investment decision. In this way, we develop a detailed understanding of the quality and skill of our decision makers to enhance quality control.

     Portfolio managers implement investment decisions made by specialists into portfolios. We believe that this separation of construction from decision making ensures objectivity in the investment process by removing behavioral biases linked to historic performance that may arise in portfolios where there is a sole decision maker also responsible for portfolio positioning. The primary role of the portfolio manager is the efficient implementation of investment decisions within portfolios. The portfolio managers work closely with sector specialists and traders to determine how best to express each investment decision at the security level.

     Our risk management process combines the evaluation of expected portfolio risks, a strong commitment to oversight of portfolio construction and actual performance and risk oversight. There are four key components to the investment risk management process applied within Invesco Fixed Income, namely:

§	Design: Portfolio Design Calculator/ Alpha Source Oversight.
§	Decisions: Decision Quality Analysis.
§	Portfolio Construction: Portfolio Management Oversight.
§	Invesco Fixed Income Oversight: Global Investment Policy Committee.

     Each investment decision is assigned to an individual within the firm. Specialists are required to explain the rationale behind every investment decision thereby helping the firm to distinguish skill from good fortune.

     Each investment decision includes pricing review levels. The upper level is the price the security is expected to reach, whereas the lower level is the point at which the rationale for persisting with the position must be reevaluated by the specialist. Specialists receive alerts from our proprietary investment system when the security is approaching or has reached these levels. While specialists are not forced to sell when these levels are reached, the investment decision must be reevaluated. Pricing levels are monitored continuously by senior management, which is integral to the firm’s risk management oversight.

     In addition to the realignment of a security’s valuation targets, sell decisions may also be based on:

§	A conscious decision to alter the Fund’s macro risk exposure (for example, duration, yield curve positioning, sector exposure).
§	The need to limit or reduce exposure to a particular sector or issuer.
§	Degradation of an issuer’s credit quality.
§	Presentation of a better relative value opportunity.

Market conditions and your Fund

The global economic environment at the beginning of 2009 was characterized by the carryover of 2008’s financial market turmoil, which contributed to one of the weakest economic periods on record.¹

Portfolio Composition

By security type

U.S. Government-Sponsored Mortgage-Backed Securities	77.4	%
U.S. Government Sponsored Agency Securities	19.5
U.S. Treasury Securities	1.9
Foreign Sovereign Debt	0.3
Money Market Funds Plus Other Assets Less Liabilities	0.9

Top 10 Fixed Income Issuers*

1. Freddie Mac REMICs		29.3	%
2. Federal Home Loan Bank		12.7
3. Ginnie Mae REMICs		11.3
4. Federal National Mortgage Association		10.5
5. Federal Agricultural Mortgage Corp.		8.9
6. Federal Home Loan Mortgage Corp.		8.4
7. Fannie Mae REMICs		8.3
8. Government National Mortgage Association		4.0
9. Federal Farm Credit Bank		2.4
10. U.S. Treasury Securities		1.9
Total Net Assets	$1.2 billion
Total Number of Holdings*		826

The Fund’s holdings are subject to change, and there is no assurance that the Fund will continue to hold any particular security.

* Excluding money market fund holdings.

AIM V.I. Government Securities Fund

Gross domestic product, the broadest measure of overall U.S. economic activity, reflected a shrinking economy during the first half of 2009 before turning positive during the second half of the year.¹

     The U.S. Federal Reserve Board (the Fed) maintained a very accommodative monetary policy through the Fund’s fiscal year, with the federal funds target rate unchanged in its range of zero to 0.25%.² The Fed also continued programs of quantitative easing by buying up Treasuries, agency MBS and agency debentures. In doing so, the Fed worked to stimulate economic recovery by keeping long-term interest rates low and making more money available to consumers and businesses.³

     Government bond yields started 2009 at historically low levels, following sharp declines in the latter part of 2008 when investors drove prices up (and yields down) as they sought the safety and liquidity of U.S. government securities. Beginning in early 2009, demand for credit sensitive bonds returned, and along with renewed concerns about future inflation and the ability of the market to absorb heavy government issuance, government bond yields were pushed higher (and prices lower) throughout 2009, especially for intermediate and longer maturity Treasuries.³ In fact, U.S. Treasury 10-year and 30-year security returns had their worst year of performance on record in 2009 following one of their best years on record.⁴

     Allocation decisions among the various government sub-sectors had a favorable impact on portfolio performance versus the Fund’s style-specific index. The Fund maintained a heavy allocation to agency MBS, particularly in the form of collateralized mortgage obligations structures that exhibited short and very stable durations. The Fund also benefited from tactical exposure to agency pass-through MBS in a market environment that saw mortgage yield spreads tighten versus Treasuries as investors’ risk appetite increased and the Fed embarked on a program to purchase $1.25 trillion of agency pass-through MBS. Our exposure to the U.S. Treasury market was accomplished through U.S. Treasury futures, which we believe is a more efficient way to employ the Fund’s cash than buying actual bonds. Treasury Inflation Protected securities (TIPs) were used during the year to capitalize on concerns about inflation that permeated the market due to the Fed’s extremely accommodative monetary policy. The use of TIPs was a positive factor for performance during 2009.

     The Fund was generally longer in duration than its benchmark during the first half of the year and generally shorter in duration than its benchmark during the second half of the year. Duration is a measure of a bond’s price sensitivity to interest rate changes. Generally, bonds with shorter durations tend to be less sensitive to these changes. Overall, duration had a negative impact on performance during 2009.

     The Fund was positioned for a flattening of the yield curve (bonds with longer maturities falling more than those with shorter rates) during the second quarter of 2009. While the yield curve fluctuated greatly over the period,⁴ the general steepening of the curve was a negative factor in Fund performance relative to the style-specific index.

     We thank you for your investment in AIM V.I. Government Securities Fund.

1	U.S. Bureau of Economic Analysis
2	Federal Reserve Board
3	Bloomberg L. P.
4	Barclays Capital

The views and opinions expressed in management’s discussion of Fund performance are those of Invesco Advisers, Inc. These views and opinions are subject to change at any time based on factors such as market and economic conditions. These views and opinions may not be relied upon as investment advice or recommendations, or as 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 Invesco Advisers, Inc. 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.

See important Fund and index disclosures later in this report.

Clint Dudley

Chartered Financial Analyst, portfolio manager, is manager of AIM V.I. Government Securities Fund. He joined Invesco Aim in 1996. Mr. Dudley earned a B.B.A. and an M.B.A. from Baylor University. He is a member of the CFA Institute.

Brian Schneider

Chartered Financial Analyst, portfolio manager, is manager of AIM V.I. Government Securities Fund. He joined Invesco in 1987. Mr. Schneider earned a B.A. in economics and an M.B.A. from Bellermine College. He is a member of the CFA Institute.

AIM V.I. Government Securities Fund

Your Fund’s Long-Term Performance

Results of a $10,000 Investment — Oldest Share Class since Inception
Index data from 4/30/93, Fund data from 5/5/93

1 Lipper Inc.

Past performance cannot guarantee comparable future results.

     This chart, which is a logarithmic chart, presents the fluctuations in the value of the Fund and its indexes. We believe that a logarithmic chart is more effective than other types of charts in illustrating changes in value during the early years shown in the chart. The vertical axis, the one that indicates the dollar value of an investment, is constructed with each segment representing a percent change in the value of the investment. In this chart, each segment represents a doubling, or 100% change, in the value of the investment. In other words, the space between $5,000 and $10,000 is the same size as the space between $10,000 and $20,000, and so on.

Average Annual Total Returns
As of 12/31/09

Series I Shares
Inception (5/5/93)	5.04	%
10 Years	5.28
5 Years	4.68
1 Year	-0.01
Series II Shares
10 Years	5.02	%
5 Years	4.42
1 Year	-0.26

Series II shares’ inception date is September 19, 2001. Returns since that date are historical. All other returns are the blended returns of the historical performance of Series II shares since their inception and the restated historical performance of Series I shares (for periods prior to inception of Series II shares) adjusted to reflect the Rule 12b-1 fees applicable to Series II shares. The inception date of Series I shares is May 5, 1993. The performance of the Fund’s Series I and Series II share classes will differ primarily due to different class expenses.

     The performance data quoted represent past performance and cannot guarantee comparable future results; current performance may be lower or higher. Please contact your variable product issuer or financial adviser for the most recent month-end variable product performance. Performance figures reflect Fund expenses, reinvested distributions and changes in net asset value. Investment return and principal value will fluctuate so that you may have a gain or loss when you sell shares.

     The net annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 0.74% and 0.99%, respectively.^{1, 2} The total annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 0.77% and 1.02%, respectively. The expense ratios presented above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

     AIM V.I. Government Securities Fund, a series portfolio of AIM Variable Insurance Funds, is currently offered through insurance companies issuing variable products. You cannot purchase shares of the Fund directly. Performance figures given represent the Fund and are not intended to reflect actual variable product values. They do not reflect sales charges, expenses and fees assessed in connection with a variable product. Sales charges, expenses and fees, which are determined by the variable product issuers, will vary and will lower the total return.

     The most recent month-end performance data at the Fund level, excluding variable product charges, is available on the Invesco Aim automated information line, 866 702 4402. As mentioned above, for the most recent month-end performance including variable product charges, please contact your variable product issuer or financial adviser.

1	Total annual operating expenses less any contractual fee waivers and/or expense reimbursements by the adviser in effect through at least April 30, 2011. See current prospectus for more information.
2	Total annual operating expenses less any contractual fee waivers and/or expense reimbursements by the adviser in effect through at least June 30, 2010. See current prospectus for more information.

AIM V.I. Government Securities Fund

AIM V.I. Government Securities Fund’s investment objective is a high level of current income consistent with reasonable concern for safety of principal.

§ Unless otherwise stated, information presented in this report is as of December 31, 2009, and is based on total net assets.

§ Unless otherwise noted, all data provided by Invesco.

Principal risks of investing in the Fund

The Fund may use enhanced investment techniques such as derivatives. The principal risk of derivatives is that the fluctuations in their values may not correlate perfectly with the overall securities markets. Derivatives are subject to counterparty risk—the risk that the other party will not complete the transaction with the Fund.

     Dollar-roll transactions involve the risk that the market value of securities to be purchased by the Fund may decline below the price at which the Fund is obligated to repurchase them, or that the other party may default on its obligation such that the Fund is delayed or prevented from completing the transaction.

     High-coupon, U.S. government agency mortgage-backed securities provide a higher coupon than current prevailing market interest rates, and the Fund may purchase such securities at a premium. If these securities experience a faster-than-expected principal prepayment rate, both the market value and income from such securities will decrease.

     Interest rate risk refers to the risk that bond prices generally fall as interest rates rise and vice versa.

     Since a large percentage of the Fund’s assets may be invested in securities of a limited number of companies, each investment has a greater effect on the Fund’s overall performance, and any change in the value of those securities could significantly affect the value of your investment in the Fund.

     Leveraging entails risks such as magnifying changes in the value of the portfolio’s securities.

     There is no guarantee that the investment techniques and risk analysis used by the Fund’s portfolio managers will produce the desired results.

     The prices of securities held by the Fund may decline in response to market risks.

     Reinvestment risk is the risk that a bond’s cash flows will be reinvested at an interest rate below that of the original bond.

     Reverse repurchase agreements and dollar-roll transactions involve the risk that the market value of securities to be purchased by the Fund may decline below the price at which the Fund is obligated to repurchase them, or that the other party may default on its obligation such that the Fund is delayed or prevented from completing the transaction.

     The Fund may invest in obligations issued by agencies and instrumentalities of the U.S. government that may vary in the level of support they receive from the U.S. government. The U.S. government may choose not to provide financial support to U.S.-government-sponsored agencies or instrumentalities if it is not legally obligated to do so. In this case, if the issuer defaulted, the fund holding securities of such an issuer might not be able to recover its investment from the U.S. government.

About indexes used in this report

The Barclays Capital U.S. Aggregate Index is an unmanaged index considered representative of the U.S. investment-grade, fixed-rate bond market.

     The Barclays Capital U.S. Government Index is an unmanaged index considered representative of fixed-income obligations issued by the U.S. Treasury, government agencies and quasi-federal corporations.

     The Lipper VUF General U.S. Government Funds Index is an unmanaged index considered representative of general U.S. government variable insurance underlying funds tracked by Lipper.

     The Fund is not managed to track the performance of any particular index, including the indexes defined here, and consequently, the performance of the Fund may deviate significantly from the performance of the indexes.

     A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group reflects fund expenses; performance of a market index does not.

Other information

The Chartered Financial Analyst^® (CFA^®) designation is globally recognized and attests to a charterholder’s success in a rigorous and comprehensive study program in the field of investment management and research analysis.

     The returns shown in management’s discussion of Fund performance are based on net asset values calculated for shareholder transactions. Generally accepted accounting principles require adjustments to be made to the net assets of the Fund at period end for financial reporting purposes, and as such, the net asset values for shareholder transactions and the returns based on those net asset values may differ from the net asset values and returns reported in the Financial Highlights. Additionally, the returns and net asset values shown throughout this report are at the Fund level only and do not include variable product issuer charges. If such charges were included, the total returns would be lower.

     Industry classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s.

AIM V.I. Government Securities Fund

Schedule of Investments

December 31, 2009

	Principal
	Amount		Value
U.S. Government Sponsored Mortgage-Backed Securities–77.44%
Collateralized Mortgage Obligations–58.92%
Fannie Mae Grantor Trust, 5.34%, 04/25/12	$	4,500,000	$	4,801,113
Fannie Mae REMICs, 4.50%, 01/25/12 to 07/25/28		14,448,940		14,657,376
5.00%, 12/25/15 to 03/25/25		11,192,669		11,444,946
4.00%, 09/25/16		6,629,977		6,798,951
5.50%, 04/25/24 to 03/25/28		12,324,907		12,597,312
6.00%, 05/25/26 to 10/25/33		48,410,511		49,596,532
4.57%, 06/25/30		3,264,865		3,298,789
4.25%, 06/25/33		1,724,203		1,761,391
Fannie Mae Whole Loans, 5.50%, 07/25/34		2,346,205		2,331,658
Federal Home Loan Bank, 4.75%, 10/25/10		35,475,061		36,517,141
5.27%, 12/28/12		19,567,779		20,785,159
5.46%, 11/27/15		52,514,796		55,537,947
Freddie Mac REMICs, 6.75%, 06/15/11		228,421		233,296
5.25%, 08/15/11 to 08/15/32		18,925,048		19,849,868
5.38%, 08/15/11 to 09/15/11		5,760,242		5,971,830
4.50%, 12/15/15 to 04/15/30		18,415,512		18,888,855
7.50%, 01/15/16		1,110,665		1,132,316
5.00%, 04/15/16 to 09/15/27		40,309,000		41,254,629
6.00%, 09/15/16 to 09/15/29		88,529,481		90,610,566
3.50%, 10/15/16 to 05/15/22		4,642,983		4,757,980
4.00%, 11/15/16 to 02/15/30		7,861,218		8,015,705
5.75%, 12/15/18		17,743,941		18,135,985
5.50%, 07/15/22 to 10/15/28		123,316,701		126,022,220
4.75%, 05/15/23 to 04/15/31		18,981,637		19,450,603
Ginnie Mae REMICs, 3.13%, 04/16/16		4,701,151		4,760,451
5.86%, 10/16/23		46,084		46,247
2.17%, 02/16/24		22,906,708		23,028,210
5.00%, 09/16/27 to 02/20/29		9,066,854		9,329,672
4.21%, 01/16/28		9,089,444		9,338,694
4.75%, 12/20/29		9,579,930		9,677,981
5.50%, 04/16/31		8,140,899		8,527,592
4.50%, 11/20/34 to 08/20/35		25,506,070		26,376,791
4.00%, 03/20/36		44,580,516		45,910,750
				711,448,556
Federal Home Loan Mortgage Corp. (FHLMC)–5.44%
Pass Through Ctfs., 6.00%, 08/01/10 to 02/01/34		5,346,838		5,725,868
7.00%, 11/01/10 to 12/01/37		18,846,472		20,941,688
6.50%, 10/01/12 to 12/01/35		8,809,442		9,536,294
8.00%, 07/01/15 to 09/01/36		16,769,438		19,197,346
7.50%, 03/01/16 to 08/01/36		6,811,046		7,535,827
10.50%, 08/01/19		6,112		6,858
8.50%, 09/01/20 to 08/01/31		1,255,643		1,442,914
10.00%, 03/01/21		87,138		97,876
9.00%, 06/01/21 to 06/01/22		716,866		798,410
7.05%, 05/20/27		374,614		413,915
				65,696,996
Federal National Mortgage Association (FNMA)–9.07%
Pass Through Ctfs., 6.50%, 10/01/10 to 11/01/37		10,958,668		11,842,326
7.00%, 12/01/10 to 06/01/36		31,267,422		34,145,354
7.50%, 08/01/11 to 07/01/37		20,172,022		22,680,060
8.00%, 06/01/12 to 11/01/37		18,735,484		21,122,700
8.50%, 06/01/12 to 08/01/37		7,999,831		9,084,677
10.00%, 09/01/13		17,785		19,014
6.00%, 09/01/17 to 03/01/37		5,749,470		6,134,450
5.00%, 11/01/17 to 12/01/33		1,613,166		1,693,130
5.50%, 03/01/21		669		710
6.75%, 07/01/24		1,350,850		1,497,267
6.95%, 10/01/25 to 09/01/26		200,457		222,851
STRIPS, 6.74%, 10/09/19(a)		1,000,000		556,811
7.37%, 10/09/19(a)		800,000		445,449
				109,444,799
Government National Mortgage Association (GNMA)–4.01%
Pass Through Ctfs., 6.50%, 02/20/12 to 01/15/37		16,870,245		18,273,272
8.00%, 07/15/12 to 01/15/37		4,953,286		5,685,376
6.75%, 08/15/13		47,851		51,002
7.50%, 10/15/14 to 10/15/35		8,318,556		9,377,007
11.00%, 10/15/15		2,152		2,410
9.50%, 09/15/16		2,861		3,185
9.00%, 10/20/16 to 12/20/16		103,077		114,393
7.00%, 04/15/17 to 01/15/37		6,712,445		7,440,894
10.50%, 09/15/17 to 11/15/19		3,803		4,086
8.50%, 12/15/17 to 01/15/37		1,051,131		1,151,868
10.00%, 06/15/19		42,112		46,329
6.00%, 09/15/20 to 08/15/33		3,722,799		3,986,704

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

AIM V.I. Government Securities Fund

	Principal
	Amount		Value
Government National Mortgage Association (GNMA)–(continued)
6.95%, 08/20/25 to 08/20/27	$	1,108,851	$	1,226,061
6.25%, 06/15/27		187,312		200,891
6.38%, 10/20/27 to 09/20/28		793,103		857,540
				48,421,018
Total U.S. Government Sponsored Mortgage-Backed Securities (Cost $917,718,892)				935,011,369
U.S. Government Sponsored Agency Securities–19.46%
Federal Agricultural Mortgage Corp.–8.87%
Bonds, 2.11%, 03/15/12		70,000,000		70,697,879
Medium-Term Notes, 5.60%, 01/19/17		11,000,000		11,059,676
Unsec. Medium-Term Notes, 2.20%, 11/09/11		25,000,000		25,291,803
				107,049,358
Federal Farm Credit Bank (FFCB)–2.44%
Bonds, 3.00%, 09/22/14		12,500,000		12,616,464
5.59%, 10/04/21		10,075,000		10,703,275
5.75%, 01/18/22		2,775,000		2,936,425
Medium-Term Notes, 5.75%, 12/07/28		3,100,000		3,245,485
				29,501,649
Federal Home Loan Bank (FHLB)–3.31%
Unsec. Bonds, 5.45%, 04/15/11		9,919,651		10,386,465
4.72%, 09/20/12		1,501,459		1,585,727
Unsec. Global Bonds, 1.75%, 08/22/12		5,000,000		5,011,087
Unsec. Global Notes, 1.63%, 11/21/12		13,000,000		12,933,803
Series 1, Unsec. Bonds, 5.77%, 03/23/18		9,367,616		10,035,233
				39,952,315
Federal Home Loan Mortgage Corp. (FHLMC)–2.93%
Unsec. Global Notes, 2.13%, 09/21/12		35,000,000		35,378,373
Federal National Mortgage Association (FNMA)–1.45%
Sr. Unsec. Global Bonds, 6.63%, 11/15/30(b)		700,000		845,435
Unsec. Global Notes, 1.00%, 11/23/11		16,750,000		16,703,291
				17,548,726
Tennessee Valley Authority–0.46%
Series A, Bonds, 6.79%, 05/23/12		5,000,000		5,608,860
Total U.S. Government Sponsored Agency Securities (Cost $232,206,293)				235,039,281
U.S. Treasury Securities–1.89%
U.S. Treasury Bonds–0.31%
7.63%, 02/15/25(b)		550,000		743,703
6.88%, 08/15/25(b)		500,000		635,000
4.25%, 05/15/39(b)		2,500,000		2,347,265
				3,725,968
U.S. Treasury Notes–1.58%
1.13%, 06/30/11(b)		8,400,000		8,433,469
1.00%, 09/30/11		5,000,000		4,998,047
3.13%, 05/15/19(b)		6,000,000		5,686,875
				19,118,391
Total U.S. Treasury Securities (Cost $22,692,665)				22,844,359
Foreign Sovereign Bonds–0.32%
Sovereign Debt–0.32%
Israel Government Agency for International Development (AID) Bond (Israel), Gtd. Global Bonds, 5.13%, 11/01/24 (Cost $3,831,394)		3,800,000		3,876,692
	Shares
Money Market Funds–0.78%
Government & Agency Portfolio–Institutional Class (Cost $9,381,806)(c)		9,381,806		9,381,806
TOTAL INVESTMENTS–99.89% (Cost $1,185,831,050)				1,206,153,507
OTHER ASSETS LESS LIABILITIES–0.11%				1,275,204
NET ASSETS–100.00%			$	1,207,428,711

Investment Abbreviations:

Ctfs.	– Certificates
Gtd.	– Guaranteed
REMIC	– Real Estate Mortgage Investment Conduits
Sr.	– Senior
STRIPS	– Separately Traded Registered Interest and Principal Security
Unsec.	– Unsecured

Notes to Schedule of Investments:

(a)	Security traded on a discount basis. The interest rate shown represents the discount rate at the time of purchase by the Fund.
(b)	All or a portion of the value was pledged as collateral to cover margin requirements for open futures contracts. See Note 1M and Note 5.
(c)	The money market fund and the Fund are affiliated by having the same investment adviser.

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

AIM V.I. Government Securities Fund

Statement of Assets and Liabilities

December 31, 2009

Assets:
Investments, at value (Cost $1,176,449,244)	$	1,196,771,701
Investments in affiliated money market funds, at value and cost		9,381,806
Total investments, at value (Cost $1,185,831,050)		1,206,153,507
Receivables for:
Fund shares sold		68,376
Dividends and interest		5,473,937
Fund expenses absorbed		29,348
Principal paydowns		15,883
Investment for trustee deferred compensation and retirement plans		43,188
Other assets		381
Total assets		1,211,784,620
Liabilities:
Payables for:
Fund shares reacquired		655,404
Amount due custodian		1,065,033
Variation margin		1,676,221
Accrued fees to affiliates		785,027
Accrued other operating expenses		47,028
Trustee deferred compensation and retirement plans		127,196
Total liabilities		4,355,909
Net assets applicable to shares outstanding	$	1,207,428,711
Net assets consist of:
Shares of beneficial interest	$	1,199,917,431
Undistributed net investment income		55,633,788
Undistributed net realized gain (loss)		(54,349,760	)
Unrealized appreciation		6,227,252
	$	1,207,428,711
Net Assets:
Series I	$	1,192,966,614
Series II	$	14,462,097
Shares outstanding, $0.001 par value per share, unlimited number of shares authorized:
Series I		99,810,236
Series II		1,216,913
Series I:
Net asset value per share	$	11.95
Series II:
Net asset value per share	$	11.88

Statement of Operations

For the year ended December 31, 2009

Investment income:
Interest	$	56,459,726
Dividends from affiliated money market funds		127,142
Total investment income		56,586,868
Expenses:
Advisory fees		6,185,958
Administrative services fees		3,632,550
Custodian fees		90,822
Distribution fees — Series II		43,690
Transfer agent fees		17,504
Trustees’ and officers’ fees and benefits		63,168
Other		164,728
Total expenses		10,198,420
Less: Fees waived and expense offset arrangement(s)		(356,858	)
Net expenses		9,841,562
Net investment income		46,745,306
Realized and unrealized gain (loss) from:
Net realized gain from:
Investment securities		442,896
Futures contracts		5,953,880
		6,396,776
Change in net unrealized appreciation (depreciation) of:
Investment securities		7,472,864
Futures contracts		(65,670,002	)
		(58,197,138	)
Net realized and unrealized gain (loss)		(51,800,362	)
Net increase (decrease) in net assets resulting from operations	$	(5,055,056	)

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

AIM V.I. Government Securities Fund

Statement of Changes in Net Assets

For the years ended December 31, 2009 and 2008

	2009			2008
Operations:
Net investment income	$	46,745,306		$	54,372,123
Net realized gain		6,396,776			53,200,708
Change in net unrealized appreciation (depreciation)		(58,197,138	)		58,547,019
Net increase (decrease) in net assets resulting from operations		(5,055,056	)		166,119,850
Distributions to shareholders from net investment income:
Series I		(60,184,129	)		(56,114,206	)
Series II		(678,455	)		(694,714	)
Total distributions from net investment income		(60,862,584	)		(56,808,920	)
Distributions to shareholders from net realized gains:
Series I		(43,257,923	)		—
Series II		(522,035	)		—
Total distributions from net realized gains		(43,779,958	)		—
Share transactions-net:
Series I		(290,464,747	)		314,015,739
Series II		(4,570,136	)		79,644
Net increase (decrease) in net assets resulting from share transactions		(295,034,883	)		314,095,383
Net increase (decrease) in net assets		(404,732,481	)		423,406,313
Net assets:
Beginning of year		1,612,161,192			1,188,754,879
End of year (includes undistributed net investment income of $55,633,788 and $60,726,416, respectively)	$	1,207,428,711		$	1,612,161,192

Notes to Financial Statements

December 31, 2009

NOTE 1—Significant Accounting Policies

AIM V.I. Government Securities Fund (the “Fund”) is a series portfolio of AIM Variable Insurance Funds (the “Trust”). The Trust is a Delaware statutory trust registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end series management investment company consisting of twenty-one separate portfolios, (each constituting a “Fund”). The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Matters affecting each Fund or class will be voted on exclusively by the shareholders of such Fund or class. Current Securities and Exchange Commission (“SEC”) guidance, however, requires participating insurance companies offering separate accounts to vote shares proportionally in accordance with the instructions of the contract owners whose investments are funded by shares of each Fund or class.

  The Fund’s investment objective is a high level of current income consistent with reasonable concern for safety of principal.

  The Fund currently offers two classes of shares, Series I and Series II, both of which are offered to insurance company separate accounts funding variable annuity contracts and variable life insurance policies (“variable products”).

  The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements.

A.	Security Valuations — Securities, including restricted securities, are valued according to the following policy.
	Debt obligations (including convertible bonds) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution-size trading in similar groups of securities, developments related to specific securities, dividend rate, yield, quality, type of issue, coupon rate, maturity, individual trading characteristics and other market data. Short-term obligations, including commercial paper, having 60 days or less to maturity are recorded at amortized cost which approximates value. Debt securities are subject to interest rate and credit risks. In addition, all debt securities involve some risk of default with respect to interest and/or principal payments.
	A security listed or traded on an exchange (except convertible bonds) is valued at its last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales or official closing price on a particular day, the security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based on prices furnished by

AIM V.I. Government Securities Fund

	independent pricing services or market makers. When such securities are valued by an independent pricing service they may be considered fair valued. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean between the last bid and ask prices from the exchange on which they are principally traded. Options not listed on an exchange are valued by an independent source at the mean between the last bid and ask prices. For purposes of determining net asset value per share, futures and option contracts generally are valued 15 minutes after the close of the customary trading session of the New York Stock Exchange (“NYSE”).
	Investments in open-end and closed-end registered investment companies that do not trade on an exchange are valued at the end of day net asset value per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded.
	Foreign securities (including foreign exchange contracts) are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the NYSE. If market quotations are available and reliable for foreign exchange traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that are significant and make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economical upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
	Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities and Corporate Loans. The mean between the last bid and asked prices may be used to value debt obligations other than Corporate Loans.
	Securities for which market quotations are not readily available or are unreliable are valued at fair value as determined in good faith by or under the supervision of the Trust’s officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a security’s fair value.
	Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
B.	Securities Transactions and Investment Income — Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income is recorded on the accrual basis from settlement date. Dividend income is recorded on the ex-dividend date. Bond premiums and discounts are amortized and/or accreted for financial reporting purposes.
	The Fund may periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain/loss for investments no longer held and as unrealized gain/loss for investments still held.
	Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the realized and unrealized net gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the Fund’s net asset value and, accordingly, they reduce the Fund’s total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in the Statement of Operations and Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the adviser.
	The Fund allocates income and realized and unrealized capital gains and losses to a class based on the relative net assets of each class.
C.	Country Determination — For the purposes of making investment selection decisions and presentation in the Schedule of Investments, the investment adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuer’s securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted.
D.	Distributions — Distributions from income and net realized capital gain, if any, are generally paid to separate accounts of participating insurance companies annually and recorded on ex-dividend date.
E.	Federal Income Taxes — The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code necessary to qualify as a regulated investment company and to distribute substantially all of the Fund’s taxable earnings to shareholders. As such, the Fund will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements.
	The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.

AIM V.I. Government Securities Fund

F.	Expenses — Fees provided for under the Rule 12b-1 plan of a particular class of the Fund and which are directly attributable to that class are charged to the operations of such class. All other expenses are allocated among the classes based on relative net assets.
G.	Accounting Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print, which is generally 45 days from the period-end date.
H.	Indemnifications — Under the Trust’s organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Fund’s servicing agreements, that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote.
I.	Other Risks — The Funds may invest in obligations issued by agencies and instrumentalities of the U.S. Government that may vary in the level of support they receive from the government. The government may choose not to provide financial support to government sponsored agencies or instrumentalities if it is not legally obligated to do so. In this case, if the issuer defaulted, the underlying fund holding securities of such issuer might not be able to recover its investment from the U.S. Government. Many securities purchased by the Fund are not guaranteed by the U.S. Government.
J.	Dollar Roll and Forward Commitment Transactions — The Fund may engage in dollar roll and forward commitment transactions with respect to mortgage-backed securities issued by GNMA, FNMA and FHLMC. These transactions are often conducted on a to be announced (“TBA”) basis. In a TBA mortgage-backed transaction, the seller does not specify the particular securities to be delivered. Rather, a Fund agrees to accept any security that meets specified terms, such as an agreed upon issuer, coupon rate and terms of the underlying mortgages. TBA mortgage-backed transactions generally settle once a month on a specific date.
	In a dollar roll transaction, the Fund sells a mortgage-backed security held in the Fund to a financial institution such as a bank or broker-dealer, and simultaneously agrees to purchase a substantially similar security (same type, coupon and maturity) from the institution at an agreed upon price and future date. The mortgage-backed securities to be purchased will bear the same coupon as those sold, but generally will be collateralized by different pools of mortgages with different prepayment histories. Based on the typical structure of dollar roll transactions by the Fund, the dollar roll transactions are accounted for as financing transactions in which the Fund receives compensation as either a “fee” or a “drop”. “Fee” income which is agreed upon amongst the parties at the commencement of the dollar roll and the “drop” which is the difference between the selling price and the repurchase price of the mortgage-backed securities are amortized to income. During the period between the sale and purchase settlement dates, the Fund will not be entitled to receive interest and principal payments on securities purchased and not yet settled. Proceeds of the sale may be invested in short-term instruments, and the income from these investments, together with any additional fee income received on the sale, could generate income for the Fund exceeding the yield on the security sold. Dollar roll transactions are considered borrowings under the 1940 Act.
	Forward commitment transactions involve commitments by the Fund to acquire or sell TBA mortgage-backed securities from/to a financial institution, such as a bank or broker-dealer at a specified future date and amount. The TBA mortgage-backed security is marked to market until settlement and the unrealized appreciation or depreciation is recorded in the statement of operations.
	At the time the Fund enters into the dollar roll or forward commitment transaction, mortgage-backed securities or other liquid assets held by the Fund having a dollar value equal to the purchase price or in an amount sufficient to honor the forward commitment will be segregated.
	Dollar roll transactions involve the risk that the market value of the securities retained by the Fund may decline below the price of the securities that the Fund has sold but is obligated to purchase under the agreement. In the event that the buyer of securities in a dollar roll transaction files for bankruptcy or becomes insolvent, the Fund’s use of the proceeds from the sale of the securities may be restricted pending a determination by the other party, or its trustee or receiver, whether to enforce the Fund’s obligation to purchase the securities. The return earned by the Fund with the proceeds of the dollar roll transaction may not exceed the return on the securities sold.
	Forward commitment transactions involve the risk that a counter-party to the transaction may fail to complete the transaction. If this occurs, the Fund may lose the opportunity to purchase or sell the security at the agreed upon price. Settlement dates of forward commitment transactions may be a month or more after entering into these transactions and as a result the market values of the securities may vary from the purchase or sale prices. Therefore, forward commitment transactions may increase the Fund’s overall interest rate exposure.
K.	Foreign Currency Translations — Foreign currency is valued at the close of the NYSE based on quotations posted by banks and major currency dealers. Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at date of valuation. Purchases and sales of portfolio securities (net of foreign taxes withheld on disposition) and income items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. The Fund does not separately account for the portion of the results of operations resulting from changes in foreign exchange rates on investments and the fluctuations arising from changes in market prices of securities held. The combined results of changes in foreign exchange rates and the fluctuation of market prices on investments (net of estimated foreign tax withholding) are included with the net realized and unrealized gain or loss from investments in the Statement of Operations. Reported net realized foreign currency gains or losses arise from (i) sales of foreign currencies, (ii) currency gains or losses realized between the trade and settlement dates on securities transactions, and (iii) the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign currency gains and losses arise from changes in the fair values of assets and liabilities, other than investments in securities at fiscal period end, resulting from changes in exchange rates.
	The Fund may invest in foreign securities which may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable.

AIM V.I. Government Securities Fund

L.	Foreign Currency Contracts — The Fund may enter into foreign currency contracts to manage or minimize currency or exchange rate risk. The Fund may also enter into foreign currency contracts for the purchase or sale of a security denominated in a foreign currency in order to “lock in” the U.S. dollar price of that security. A foreign currency contract is an obligation to purchase or sell a specific currency for an agreed-upon price at a future date. The use of foreign currency contracts does not eliminate fluctuations in the price of the underlying securities the Fund owns or intends to acquire but establishes a rate of exchange in advance. Fluctuations in the value of these contracts are measured by the difference in the contract date and reporting date exchange rates and are recorded as unrealized appreciation (depreciation) until the contracts are closed. When the contracts are closed, realized gains (losses) are recorded. Realized and unrealized gains (losses) on the contracts are included in the Statement of Operations. The primary risks associated with foreign currency contracts include failure of the counterparty to meet the terms of the contract and the value of the foreign currency changing unfavorably. These risks may be in excess of the amounts reflected in the Statement of Assets and Liabilities.
M.	Futures Contracts — The Fund may enter into futures contracts to manage exposure to interest rate, equity and market price movements and/or currency risks. A futures contract is an agreement between two parties to purchase or sell a specified underlying security, currency or commodity (or delivery of a cash settlement price, in the case of an index future) for a fixed price at a future date. The Fund currently invests only in exchange-traded futures and they are standardized as to maturity date and underlying financial instrument. Initial margin deposits required upon entering into futures contracts are satisfied by the segregation of specific securities or cash as collateral at the futures commission merchant (broker). During the period the futures contracts are open, changes in the value of the contracts are recognized as unrealized gains or losses by recalculating the value of the contracts on a daily basis. Subsequent or variation margin payments are received or made depending upon whether unrealized gains or losses are incurred. These amounts are reflected as receivables or payables on the Statement of Assets and Liabilities. When the contracts are closed or expire, the Fund recognizes a realized gain or loss equal to the difference between the proceeds from, or cost of, the closing transaction and the Fund’s basis in the contract. The net realized gain (loss) and the change in unrealized gain (loss) on futures contracts held during the period is included on the Statement of Operations. The primary risks associated with futures contracts are market risk and the absence of a liquid secondary market. If the Fund were unable to liquidate a futures contract and/or enter into an offsetting closing transaction, the Fund would continue to be subject to market risk with respect to the value of the contracts and continue to be required to maintain the margin deposits on the futures contracts. Futures contracts have minimal counterparty risk since the exchange’s clearinghouse, as counterparty to all exchange traded futures, guarantees the futures against default. Risks may exceed amounts recognized in the Statement of Assets and Liabilities.
N.	Collateral — To the extent the Fund has pledged or segregated a security as collateral and that security is subsequently sold, it is the Fund’s practice to replace such collateral no later than the next business day.

NOTE 2—Advisory Fees and Other Fees Paid to Affiliates

The Trust has entered into a master investment advisory agreement with Invesco Advisers, Inc. (the “Adviser” or “Invesco”). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Adviser based on the annual rate of the Fund’s average daily net assets as follows:

Average Net Assets	Rate
First $250 million		0	.50%
Over $250 million		0	.45%

  Under the terms of a master sub-advisory agreement approved by shareholders of the Funds between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Trimark Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Funds, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide discretionary investment management services to each Fund based on the percentage of assets allocated to such Sub-Adviser(s).

  On December 31, 2009, Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc., Invesco Private Asset Management, Inc. and Invesco Global Asset Management (N.A.), Inc. merged into Invesco Institutional (N.A.), Inc. and the consolidated adviser firm was renamed Invesco Advisers, Inc.

  The Adviser has contractually agreed to waive advisory fees and/or reimburse expenses of all shares to the extent necessary to limit total annual fund operating expenses after fee waiver (excluding certain items discussed below) of Series I shares to 0.73% and Series II shares to 0.98% of average daily net assets, through at least April 30, 2011. In determining the Adviser’s obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the total annual fund operating expenses after fee waiver to exceed the numbers reflected above: (1) interest; (2) taxes; (3) dividend expense on short sales; (4) extraordinary items or non-routine items; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. The Board of Trustees or Invesco may terminate the fee waiver arrangement at any time.

  For the year ended December 31, 2009, the Adviser waived advisory fees of $356,698.

  At the request of the Trustees of the Trust, Invesco Ltd. agreed to reimburse expenses incurred by the Fund in connection with market timing matters in the AIM Funds, which may include legal, audit, shareholder reporting, communications and trustee expenses. For the year ended December 31, 2009, Invesco Ltd. did not reimburse any expenses.

  The Trust has entered into a master administrative services agreement with Invesco pursuant to which the Fund has agreed to pay Invesco a fee for costs incurred in providing accounting services and fund administrative services to the Fund and to reimburse Invesco for administrative services fees paid to insurance companies that have agreed to provide services to the participants of separate accounts. These administrative services provided by the insurance companies may include, among other things: the printing of prospectuses, financial reports and proxy statements and the delivery of the same to existing participants; the maintenance of master accounts; the facilitation of purchases and redemptions requested by the participants; and the servicing of participants’ accounts. Pursuant to such agreement, for the year ended December 31, 2009, Invesco was paid $319,782 for accounting and fund administrative services and reimbursed $3,312,768 for services provided by insurance companies.

AIM V.I. Government Securities Fund

  The Trust has entered into a transfer agency and service agreement with Invesco Aim Investment Services, Inc. (“IAIS”) pursuant to which the Fund has agreed to pay IAIS a fee for providing transfer agency and shareholder services to the Fund and reimburse IAIS for certain expenses incurred by IAIS in the course of providing such services. For the year ended December 31, 2009, expenses incurred under the agreement are shown in the Statement of Operations as transfer agent fees.

  The Trust has entered into a master distribution agreement with Invesco Aim Distributors, Inc. (“IADI”) to serve as the distributor for the Fund. The Trust has adopted a plan pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund’s Series II shares (the “Plan”). The Fund, pursuant to the Plan, pays IADI compensation at the annual rate of 0.25% of the Fund’s average daily net assets of Series II shares. Of the Plan payments, up to 0.25% of the average daily net assets of the Series II shares may be paid to insurance companies who furnish continuing personal shareholder services to customers who purchase and own Series II shares of the Fund. For the year ended December 31, 2009, expenses incurred under the Plan are detailed in the Statement of Operations as distribution fees.

  Certain officers and trustees of the Trust are officers and directors of Invesco, IAIS and/or IADI.

NOTE 3—Additional Valuation Information

Generally Accepted Accounting Principles (“GAAP”) defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3) generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment’s assigned level:

Level 1 —	Prices are determined using quoted prices in an active market for identical assets.
Level 2 —	Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk and others.
Level 3 —	Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information.

  The following is a summary of the tiered valuation input levels, as of December 31, 2009. The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.

	Level 1			Level 2		Level 3		Total
Equity Securities	$	9,381,806		$	—	$	—	$	9,381,806
Collateralized debt securities		—			733,455,980		—		733,455,980
Foreign Government Debt Securities		—			3,876,692		—		3,876,692
U.S. Treasury Securities		—			22,844,359		—		22,844,359
U.S. Government Sponsored Securities		—			436,594,670		—		436,594,670
		9,381,806			1,196,771,701		—		1,206,153,507
Other Investments*		(14,095,205	)		—		—		(14,095,205	)
Total Investments		(4,713,399	)		1,196,771,701		—		1,192,058,302

*  Other Investments include futures, which are included at unrealized appreciation (depreciation).

NOTE 4—Security Transactions with Affiliated Funds

The Fund is permitted to purchase or sell securities from or to certain other AIM Funds under specified conditions outlined in procedures adopted by the Board of Trustees of the Trust. The procedures have been designed to ensure that any purchase or sale of securities by the Fund from or to another fund or portfolio that is or could be considered an affiliate by virtue of having a common investment adviser (or affiliated investment advisers), common Trustees and/or common officers complies with Rule 17a-7 of the 1940 Act. Further, as defined under the procedures, each transaction is effected at the current market price. Pursuant to these procedures, for the year ended December 31, 2009, the Fund engaged in securities purchases of $28,538,550.

AIM V.I. Government Securities Fund

NOTE 5—Derivative Investments

Effective with the beginning of the Fund’s fiscal year, the Fund has implemented new required disclosures about derivative instruments and hedging activities in accordance with GAAP. GAAP has intended to improve financial reporting about derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity’s financial position and financial performance. The enhanced disclosure has no impact on the results of operations reported in the financial statements.

Value of Derivative Instruments at Period-End

The table below summarizes the value of the Fund’s derivative instruments, detailed by primary risk exposure, held as of December 31, 2009:

	Value
Risk Exposure/ Derivative Type	Assets		Liabilities
Interest rate risk
Futures contracts(a)	$	38,188	$	(14,133,393	)

^(a) Includes cumulative appreciation (depreciation) of futures contracts. Only current day’s net variation margin (payable) is reported within the Statement of Assets & Liabilities.

Effect of Derivative Instruments for the year ended December 31, 2009

The table below summarizes the gains (losses) on derivative instruments, detailed by primary risk exposure, recognized in earnings during the period:

	Location of Gain (Loss) on
	Statement of Operations
	Futures*
Realized Gain
Interest rate risk	$	5,953,880
Change in Unrealized Appreciation (Depreciation)
Interest rate risk	$	(65,670,002	)
Total	$	(59,716,122	)

*  The average value of futures outstanding during the period was $711,961,588.

Open Futures Contracts
							Unrealized
	Number of		Month/				Appreciation
Contract	Contracts		Commitment		Value		(Depreciation)
U.S. Treasury 2 Year Notes		199		March-2010/Long	$	43,036,860	$	(193,209	)
U.S. Treasury 5 Year Notes		2208		March-2010/Long		252,557,251		(3,487,881	)
U.S. Treasury 10 Year Notes		331		March-2010/Long		38,214,984		(988,540	)
U.S. Treasury 30 Year Bonds		1830		March-2010/Long		211,136,250		(9,425,575	)
Total					$	544,945,345	$	(14,095,205	)

NOTE 6—Expense Offset Arrangement(s)

The expense offset arrangement is comprised of custodian credits which result from periodic overnight cash balances at the custodian. For the year ended December 31, 2009, the Fund received credits from this arrangement, which resulted in the reduction of the Fund’s total expenses of $160.

NOTE 7—Trustees’ and Officers’ Fees and Benefits

“Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and “Trustees’ and Officers’ Fees and Benefits” also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various AIM Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees are eligible to participate in a retirement plan that provides for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former Trustees who also participate in a retirement plan and receive benefits under such plan. “Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund.

  During the year ended December 31, 2009, the Fund paid legal fees of $6,273 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A member of that firm is a Trustee of the Trust.

AIM V.I. Government Securities Fund

NOTE 8—Cash Balances

The Fund may borrow for leveraging in an amount up to 5% of the Fund’s total assets (excluding the amount borrowed) at the time the borrowing is made. In doing so, the Fund is permitted to temporarily carry a negative or overdrawn balance in its account with The State Street Bank and Trust Company, the custodian bank. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (i) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (ii) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate. A Fund may not purchase additional securities when any borrowings from banks exceeds 5% of the Fund’s total assets.

NOTE 9—Distributions to Shareholders and Tax Components of Net Assets

Tax Character of Distributions to Shareholders Paid During the Years Ended December 31, 2009 and 2008:

	2009		2008
Ordinary income	$	60,878,384	$	56,608,920
Long-term capital gain		43,764,158		—
Total distributions	$	104,642,542	$	56,608,920

Tax Components of Net Assets at Period-End:

	2009
Undistributed ordinary income	$	55,764,293
Net unrealized appreciation — investments		20,191,168
Temporary book/tax differences		(130,504	)
Post-October deferrals		(11,863,630	)
Capital loss carryforward		(56,450,047	)
Shares of beneficial interest		1,199,917,431
Total net assets	$	1,207,428,711

  The difference between book-basis and tax-basis unrealized appreciation (depreciation) is due to differences in the timing of recognition of gains and losses on investments for tax and book purposes. The Fund’s net unrealized appreciation difference is attributable primarily to wash sales and the realization for tax purposes of unrealized gains on certain future contracts..

  The temporary book/tax differences are a result of timing differences between book and tax recognition of income and/or expenses. The Fund’s temporary book/tax differences are the result of the trustee deferral of compensation and retirement plan benefits.

  Capital loss carryforward is calculated and reported as of a specific date. Results of transactions and other activity after that date may affect the amount of capital loss carryforward actually available for the Fund to utilize. The ability to utilize capital loss carryforward in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.

  The Fund has a capital loss carryforward as of December 31, 2009 which expires as follows:

	Capital Loss
Expiration	Carryforward*
December 31, 2017	$	56,450,047

*  Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code.

NOTE 10—Investment Securities

The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the year ended December 31, 2009 was $649,895,603 and $846,261,621, respectively. During the same period, purchases and sales of U.S. Treasury obligations were $66,930,580 and $51,800,878, repectively. Cost of investments on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed Federal income tax reporting period end.

Unrealized Appreciation (Depreciation) of Investment Securities on a Tax Basis
Aggregate unrealized appreciation of investment securities	$	21,128,513
Aggregate unrealized (depreciation) of investment securities		(937,345	)
Net unrealized appreciation of investment securities	$	20,191,168
Cost of investments for tax purposes is $1,185,962,339.

AIM V.I. Government Securities Fund

NOTE 11—Reclassification of Permanent Differences

Primarily as a result of differing book/tax treatment of paydowns, on December 31, 2009, undistributed net investment income was increased by $9,024,650, undistributed net realized gain (loss) was decreased by $9,024,650. This reclassification had no effect on the net assets of the Fund.

NOTE 12—Share Information

	Summary of Share Activity
	Year ended December 31,
	2009(a)						2008
	Shares			Amount			Shares			Amount
Sold:
Series I		13,378,824		$	173,338,232			42,340,755		$	529,835,003
Series II		368,564			4,730,767			722,852			8,979,278
Issued as reinvestment of dividends:
Series I		8,534,823			103,442,051			4,387,350			56,114,206
Series II		99,626			1,200,490			54,659			694,714
Reacquired:
Series I		(44,095,427	)		(567,245,030	)		(21,773,179	)		(271,933,470	)
Series II		(821,161	)		(10,501,393	)		(772,520	)		(9,594,348	)
Net increase (decrease) in share activity		(22,534,751	)	$	(295,034,883	)		24,959,917		$	314,095,383

^(a) There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 94% of the outstanding shares of the Fund. The Fund and the Fund’s principal underwriter or adviser, are parties to participation agreements with these entities whereby these entities sell units of interest in separate accounts funding variable products that are invested in the Fund. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and or Invesco affiliates including but not limited to services such as, securities brokerage, third party record keeping and account servicing and administrative services. The Trust has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially.

NOTE 13—Financial Highlights

The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.

																											Ratio of			Ratio of
					Net gains																						expenses			expenses to
					(losses)																						to average			average net			Ratio of net
	Net asset				on securities						Dividends			Distributions											Net assets,		net assets			assets without			investment
	value,		Net		(both			Total from			from net			from net						Net asset					end of period		with fee waivers			fee waivers			income
	beginning		investment		realized and			investment			investment			realized			Total			value, end		Total			(000s		and/or expenses			and/or expenses			to average			Portfolio
	of period		income(a)		unrealized)			operations			income			gains			Distributions			of period		Return(b)			omitted)		absorbed			absorbed			net assets			turnover(c)
Series I
Year ended 12/31/09	$	13.05	$	0.45	$	(0.43	)	$	0.02		$	(0.65	)	$	(0.47	)	$	(1.12	)	$	11.95		(0.01	)%	$	1,192,967		0.73	%(d)		0.75	%(d)		3.47	%(d)		55	%
Year ended 12/31/08		12.06		0.50		0.96			1.46			(0.47	)		—			(0.47	)		13.05		12.22			1,591,799		0.73			0.76			3.96			109
Year ended 12/31/07		11.80		0.59		0.16			0.75			(0.49	)		—			(0.49	)		12.06		6.43			1,169,985		0.73			0.76			4.93			106
Year ended 12/31/06		11.87		0.55		(0.13	)		0.42			(0.49	)		—			(0.49	)		11.80		3.55			907,403		0.71			0.77			4.62			89
Year ended 12/31/05		12.07		0.45		(0.25	)		0.20			(0.40	)		—			(0.40	)		11.87		1.66			812,824		0.85			0.88			3.68			174
Series II
Year ended 12/31/09		12.97		0.41		(0.43	)		(0.02	)		(0.60	)		(0.47	)		(1.07	)		11.88		(0.26	)		14,462		0.98	(d)		1.00	(d)		3.22	(d)		55
Year ended 12/31/08		11.99		0.46		0.97			1.43			(0.45	)		—			(0.45	)		12.97		11.98			20,362		0.98			1.01			3.71			109
Year ended 12/31/07		11.74		0.56		0.15			0.71			(0.46	)		—			(0.46	)		11.99		6.11			18,770		0.98			1.01			4.68			106
Year ended 12/31/06		11.81		0.52		(0.13	)		0.39			(0.46	)		—			(0.46	)		11.74		3.28			16,218		0.96			1.02			4.37			89
Year ended 12/31/05		12.01		0.41		(0.24	)		0.17			(0.37	)		—			(0.37	)		11.81		1.41			18,863		1.10			1.13			3.43			174

(a)	Calculated using average shares outstanding.
(b)	Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Total returns do not reflect charges assessed in connection with a variable product, which if included would reduce total returns.
(c)	Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable.
(d)	Ratios are based on average daily net assets (000’s omitted) of $1,329,404 and $17,476 for Series I and Series II shares, respectively.

AIM V.I. Government Securities Fund

Report of Independent Registered Public Accounting Firm

To the Board of Trustees of AIM Variable Insurance Funds

and Shareholders of AIM V.I. Government Securities Fund:

In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of AIM V.I. Government Securities Fund (one of the funds constituting AIM Variable Insurance Funds, hereafter referred to as the “Fund”) at December 31, 2009, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for the each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at December 31, 2009 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.

PRICEWATERHOUSECOOPERS LLP

February 10, 2010

Houston, Texas

AIM V.I. Government Securities Fund

Calculating your ongoing Fund expenses

Example

As a shareholder of the Fund, you incur ongoing costs, including management fees; distribution and/or service fees (12b-1); and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period July 1, 2009, through December 31, 2009.

  The actual and hypothetical expenses in the examples below do not represent the effect of any fees or other expenses assessed in connection with a variable product; if they did, the expenses shown would be higher while the ending account values shown would be lower.

Actual expenses

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

Hypothetical example for comparison purposes

The table below also provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return.

  The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

  Please note that the expenses shown in the table are meant to highlight your ongoing costs. Therefore, the hypothetical information is useful in comparing ongoing costs, and will not help you determine the relative total costs of owning different funds.

							HYPOTHETICAL
							(5% annual return before
			ACTUAL				expenses)
	Beginning		Ending		Expenses		Ending		Expenses		Annualized
	Account Value		Account Value		Paid During		Account Value		Paid During		Expense
Class	(07/01/09)		(12/31/09)1		Period2		(12/31/09)		Period2		Ratio
Series I	$	1,000.00	$	1,019.40	$	3.72	$	1,021.53	$	3.72		0.73	%
Series II		1,000.00		1,017.80		4.98		1,020.27		4.99		0.98

1	The actual ending account value is based on the actual total return of the Fund for the period July 1, 2009 through December 31, 2009, after actual expenses and will differ from the hypothetical ending account value which is based on the Fund’s expense ratio and a hypothetical annual return of 5% before expenses.
2	Expenses are equal to the Fund’s annualized expense ratio as indicated above multiplied by the average account value over the period, multiplied by 184/365 to reflect the most recent fiscal half year.

AIM V.I. Government Securities Fund

Tax Information

Form 1099-DIV, Form 1042-S and other year-end tax information provide shareholders with actual calendar year amounts that should be included in their tax returns. Shareholders should consult their tax advisors.

  The following distribution information is being provided as required by the Internal Revenue Code or to meet a specific state’s requirement.

  The Fund designates the following amounts or, if subsequently determined to be different, the maximum amount allowable for its fiscal year ended December 31, 2009:

Federal and State Income Tax
Long-Term Capital Gain Dividends	$	43,764,157
Corporate Dividends Received Deduction*		0%
U.S. Treasury Obligations*		1.51%

*  The above percentages are based on ordinary income dividends paid to shareholders during the Fund’s fiscal year.

AIM V.I. Government Securities Fund

Trustees and Officers

The address of each trustee and officer of AIM Variable Insurance Funds (the “Trust”), is 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173. Each trustee oversees 105 portfolios in the AIM Funds complex. The trustees serve for the life of the Trust, subject to their earlier death, incapacitation, resignation, retirement or removal as more specifically provided in the Trust’s organizational documents. Each officer serves for a one year term or until their successors are elected and qualified. Column two below includes length of time served with predecessor entities, if any.

	Trustee and/
Name, Year of Birth and	or Officer	Principal Occupation(s)	Other Directorship(s)
Position(s) Held with the Trust	Since	During Past 5 Years	Held by Trustee
Interested Persons
Martin L. Flanagan1 — 1960 Trustee	2007	Executive Director, Chief Executive Officer and President, Invesco Ltd. (ultimate parent of Invesco Aim and a global investment management firm); Adviser to the Board, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Trustee, The AIM Family of Funds®; Board of Governors, Investment Company Institute; and Member of Executive Board, SMU Cox School of Business Formerly: Chairman, Invesco Aim Advisors, Inc. (registered investment adviser); Director, Chairman, Chief Executive Officer and President, IVZ Inc. (holding company), INVESCO Group Services, Inc. (service provider) and Invesco North American Holdings, Inc. (holding company); Director, Chief Executive Officer and President, Invesco Holding Company Limited (parent of Invesco Aim and a global investment management firm); Director, Invesco Ltd.; Chairman and Vice Chairman, Investment Company Institute	None
Philip A. Taylor2 — 1954 Trustee, President and Principal Executive Officer	2006	Head of North American Retail and Senior Managing Director, Invesco Ltd.; Director, Co-Chairman, Co-President and Co-Chief Executive Officer, Invesco Advisers, inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Director, Chief Executive Officer and President, Invesco Aim Advisors, Inc. and 1371 Preferred Inc. (holding company); Director, Chairman, Chief Executive Officer and President, Invesco Aim Management Group, Inc. (financial services holding company); Director, Co-Chairman, Co-President and Co-Chief Executive Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Director and President, INVESCO Funds Group, Inc. (registered investment adviser and registered transfer agent) and AIM GP Canada Inc. (general partner for limited partnerships); Director, Invesco Aim Distributors, Inc. (registered broker dealer); Director and Chairman, Invesco Aim Investment Services, Inc. (registered transfer agent) and INVESCO Distributors, Inc. (registered broker dealer); Director, President and Chairman, INVESCO Inc. (holding company) and Invesco Canada Holdings Inc. (holding company); Chief Executive Officer, AIM Trimark Corporate Class Inc. (corporate mutual fund company) and AIM Trimark Canada Fund Inc. (corporate mutual fund company); Director and Chief Executive Officer, Invesco Trimark Ltd./Invesco Trimark Ltèe (registered investment adviser and registered transfer agent) and Invesco Trimark Dealer Inc. (registered broker dealer); Trustee, President and Principal Executive Officer, The AIM Family of Funds® (other than AIM Treasurer’s Series Trust and Short-Term Investments Trust); Trustee and Executive Vice President, The AIM Family of Funds® (AIM Treasurer’s Series Trust and Short-Term Investments Trust only); and Manager, Invesco PowerShares Capital Management LLC	None
		Formerly: Manager, Invesco PowerShares Capital Management LLC; Director, Chief Executive Officer and President, Invesco Aim Advisors, Inc.; Director, Chairman, Chief Executive Officer and President, Invesco Aim Capital Management, Inc.; President, Invesco Trimark Dealer Inc. and Invesco Trimark Ltd./Invesco Trimark Ltèe; Director and President, AIM Trimark Corporate Class Inc. and AIM Trimark Canada Fund Inc.; Senior Managing Director, Invesco Holding Company Limited; Trustee and Executive Vice President, Tax-Free Investments Trust; Director and Chairman, Fund Management Company (former registered broker dealer); President and Principal Executive Officer, The AIM Family of Funds® (AIM Treasurer’s Series Trust, Short-Term Investments Trust and Tax-Free Investments Trust only); President, AIM Trimark Global Fund Inc. and AIM Trimark Canada Fund Inc.
Independent Trustees
Bruce L. Crockett — 1944 Trustee and Chair	1993	Chairman, Crockett Technology Associates (technology consulting company)	ACE Limited (insurance company); Captaris, Inc. (unified messaging provider); and Investment Company Institute
Bob R. Baker — 1936 Trustee	2004	Retired	None
Frank S. Bayley — 1939 Trustee	2001	Retired Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios)	None
James T. Bunch — 1942 Trustee	2004	Founder, Green, Manning & Bunch Ltd., (investment banking firm)	Board of Governors, Western Golf Association/Evans Scholars Foundation and Executive Committee, United States Golf Association
Albert R. Dowden — 1941 Trustee	2000	Director of a number of public and private business corporations, including the Boss Group, Ltd. (private investment and management); Reich & Tang Funds (registered investment company); and Homeowners of America Holding Corporation/Homeowners of America Insurance Company (property casualty company) Formerly: Director, Continental Energy Services, LLC (oil and gas pipeline service); Director, CompuDyne Corporation (provider of product and services to the public security market) and Director, Annuity and Life Re (Holdings), Ltd. (reinsurance company); Director, President and Chief Executive Officer, Volvo Group North America, Inc.; Senior Vice President, AB Volvo; Director of various public and private corporations	Board of Nature’s Sunshine Products, Inc.
Jack M. Fields — 1952 Trustee	1997	Chief Executive Officer, Twenty First Century Group, Inc. (government affairs company); and Owner and Chief Executive Officer, Dos Angelos Ranch, L.P. (cattle, hunting, corporate entertainment), Discovery Global Education Fund (non-profit) and Cross Timbers Quail Research Ranch (non-profit) Formerly: Chief Executive Officer, Texana Timber LP (sustainable forestry company)	Administaff
Carl Frischling — 1937 Trustee	1993	Partner, law firm of Kramer Levin Naftalis and Frankel LLP	Director, Reich & Tang Funds (16 portfolios)
Prema Mathai-Davis — 1950 Trustee	1998	Retired	None
Lewis F. Pennock — 1942 Trustee	1993	Partner, law firm of Pennock & Cooper	None
Larry Soll — 1942 Trustee	2004	Retired	None
Raymond Stickel, Jr. — 1944 Trustee	2005	Retired Formerly: Director, Mainstay VP Series Funds, Inc. (25 portfolios)	None

1	Mr. Flanagan is considered an interested person of the Trust because he is an officer of the adviser to the Trust, and an officer and a director of Invesco Ltd., ultimate parent of the adviser to the Trust.
2	Mr. Taylor is considered an interested person of the Trust because he is an officer and a director of the adviser to, and a director of the principal underwriter of, the Trust.

T-1

Trustees and Officers — (continued)

	Trustee and/
Name, Year of Birth and	or Officer	Principal Occupation(s)	Other Directorship(s)
Position(s) Held with the Trust	Since	During Past 5 Years	Held by Trustee
Other Officers
Russell C. Burk — 1958 Senior Vice President and Senior Officer	2005	Senior Vice President and Senior Officer of The AIM Family of Funds®	N/A
John M. Zerr — 1962 Senior Vice President, Chief Legal Officer and Secretary	2006	Director, Senior Vice President, Secretary and General Counsel, Invesco Aim Management Group, Inc., Senior Vice President, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Director, Senior Vice President and Secretary, Invesco Aim Distributors, Inc.; Director, Vice President and Secretary, Invesco Aim Investment Services, Inc. and INVESCO Distributors, Inc.; Director and Vice President, INVESCO Funds Group, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The AIM Family of Funds®; and Manager, Invesco PowerShares Capital Management LLC Formerly: Director, Senior Vice President, General Counsel and Secretary, Invesco Aim Advisors, Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco Aim Capital Management, Inc.; Chief Operating Officer and General Counsel, Liberty Ridge Capital, Inc. (an investment adviser); Vice President and Secretary, PBHG Funds (an investment company) and PBHG Insurance Series Fund (an investment company); Chief Operating Officer, General Counsel and Secretary, Old Mutual Investment Partners (a broker-dealer); General Counsel and Secretary, Old Mutual Fund Services (an administrator) and Old Mutual Shareholder Services (a shareholder servicing center); Executive Vice President, General Counsel and Secretary, Old Mutual Capital, Inc. (an investment adviser); and Vice President and Secretary, Old Mutual Advisors Funds (an investment company)	N/A
Lisa O. Brinkley — 1959 Vice President	2004	Global Compliance Director, Invesco Ltd.; Chief Compliance Officer, Invesco Aim Distributors, Inc. and Invesco Aim Investment Services, Inc.; and Vice President, The AIM Family of Funds® Formerly: Senior Vice President, Invesco Aim Management Group, Inc.; Senior Vice President and Chief Compliance Officer, Invesco Aim Advisors, Inc. and The AIM Family of Funds®; Vice President and Chief Compliance Officer, Invesco Aim Capital Management, Inc. and Invesco Aim Distributors, Inc.; Vice President, Invesco Aim Investment Services, Inc. and Fund Management Company	N/A
Kevin M. Carome — 1956 Vice President	2003	General Counsel, Secretary and Senior Managing Director, Invesco Ltd.; Director, Invesco Holding Company Limited and INVESCO Funds Group, Inc.; Director and Executive Vice President, IVZ, Inc., Invesco Group Services, Inc., Invesco North American Holdings, Inc. and Invesco Investments (Bermuda) Ltd.; Director and Secretary, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); and Vice President, The AIM Family of Funds® Formerly: Senior Managing Director and Secretary, Invesco North American Holdings, Inc.; Vice President and Secretary, IVZ, Inc. and Invesco Group Services, Inc.; Senior Managing Director and Secretary, Invesco Holding Company Limited; Director, Senior Vice President, Secretary and General Counsel, Invesco Aim Management Group, Inc. and Invesco Aim Advisors, Inc.; Senior Vice President, Invesco Aim Distributors, Inc.; Director, General Counsel and Vice President, Fund Management Company; Vice President, Invesco Aim Capital Management, Inc. and Invesco Aim Investment Services, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The AIM Family of Funds®; Director and Vice President, INVESCO Distributors, Inc.; and Chief Executive Officer and President, INVESCO Funds Group, Inc.	N/A
Sheri Morris — 1964 Vice President, Treasurer and Principal Financial Officer	1999	Vice President, Treasurer and Principal Financial Officer, The AIM Family of Funds®; and Vice President, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.) Formerly: Vice President, Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.; Assistant Vice President and Assistant Treasurer, The AIM Family of Funds® and Assistant Vice President, Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A
Karen Dunn Kelley — 1960 Vice President	1993	Head of Invesco’s World Wide Fixed Income and Cash Management Group; Senior Vice President, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Executive Vice President, Invesco Aim Distributors, Inc.; Senior Vice President, Invesco Aim Management Group, Inc.; and Director, Invesco Mortgage Capital Inc.; Vice President, The AIM Family of Funds® (other than AIM Treasurer’s Series Trust and Short-Term Investments Trust); and President and Principal Executive Officer, The AIM Family of Funds® (AIM Treasurer’s Series Trust and Short-Term Investments Trust only) Formerly: Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Director of Cash Management and Senior Vice President, Invesco Aim Advisors, Inc. and Invesco Aim Capital Management, Inc.; President and Principal Executive Officer, Tax-Free Investments Trust; Director and President, Fund Management Company; Chief Cash Management Officer, Director of Cash Management, Senior Vice President, and Managing Director, Invesco Aim Capital Management, Inc.; Director of Cash Management, Senior Vice President, and Vice President, Invesco Aim Advisors, Inc. and The AIM Family of Funds® (AIM Treasurer’s Series Trust, Short-Term Investments Trust and Tax-Free Investments Trust only)	N/A
Lance A. Rejsek — 1967 Anti-Money Laundering Compliance Officer	2005	Anti-Money Laundering Compliance Officer, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Invesco Aim Distributors, Inc., Invesco Aim Investment Services, Inc., and The AIM Family of Funds® Formerly: Anti-Money Laundering Compliance Officer, Fund Management Company, Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A
Todd L. Spillane — 1958 Chief Compliance Officer	2006	Senior Vice President, Invesco Aim Management Group, Inc.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Chief Compliance Officer, The AIM Family of Funds®, INVESCO Private Capital Investments, Inc. (holding company), Invesco Private Capital, Inc. (registered investment adviser) and Invesco Senior Secured Management, Inc. (registered investment adviser); Vice President, Invesco Aim Distributors, Inc. and Invesco Aim Investment Services, Inc. Formerly: Senior Vice President and Chief Compliance Officer, Invesco Aim Advisors, Inc. and Invesco Aim Capital Management, Inc.; Chief Compliance Officer, Invesco Global Asset Management (N.A.), Inc.; Vice President, Invesco Aim Capital Management, Inc. and Fund Management Company	N/A

The Statement of Additional Information of the Trust includes additional information about the Fund’s Trustees and is available upon request, without charge, by calling 1.800.959.4246. Please refer to the Fund’s prospectus for information on the Fund’s sub-advisers.

Office of the Fund	Investment Adviser	Distributor	Auditors
11 Greenway Plaza, Suite 100	Invesco Advisers, Inc.	Invesco Aim Distributors, Inc.	PricewaterhouseCoopers LLP
Houston, TX 77046-1173	1555 Peachtree Street, N.E.	11 Greenway Plaza, Suite 100	1201 Louisiana Street, Suite 2900
	Atlanta, GA 30309	Houston, TX 77046-1173	Houston, TX 77002-5678
Counsel to the Fund	Counsel to the	Transfer Agent	Custodian
Stradley Ronon Stevens & Young, LLP	Independent Trustees	Invesco Aim Investment Services, Inc.	State Street Bank and Trust Company
2600 One Commerce Square	Kramer, Levin, Naftalis & Frankel LLP	P.O. Box 4739	225 Franklin
Philadelphia, PA 19103	1177 Avenue of the Americas	Houston, TX 77210-4739	Boston, MA 02110-2801
	New York, NY 10036-2714

T-2

AIM V.I. High Yield Fund

Annual Report to Shareholders § December 31, 2009

The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter-ends. For the second and fourth quarters, the lists appear in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The Fund’s Form N-Q filings are available on the SEC website, sec.gov. Copies of the Fund’s Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers for the Fund are 811-07452 and 033-57340. The Fund’s most recent portfolio holdings, as filed on Form N-Q, have also been made available to insurance companies issuing variable annuity contracts and variable life insurance policies (“variable products”) that invest in the Fund.

A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, from our Client Services department at 800 410 4246 or on the Invesco Aim website, invescoaim.com. On the home page, scroll down and click on Proxy Policy. The information is also available on the SEC website, sec.gov.

Information regarding how the Fund voted proxies related to its portfolio securities during the 12 months ended June 30, 2009, is available at our website, invescoaim.com. Click the About Us tab at the top of the home page; click Legal Information; and then click Proxy Voting Search. The information is also available on the SEC website, sec.gov.

Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Aim Distributors, Inc. is the U.S. distributor for Invesco Ltd.’s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd.

This report must be accompanied or preceded by a currently effective Fund prospectus and variable product prospectus, which contain more complete information, including sales charges and expenses. Investors should read each carefully before investing.

Invesco Aim Distributors, Inc.

NOT PDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEE

Management’s Discussion of Fund Performance

Performance summary

For the year ended December 31, 2009, Series I shares of AIM V.I. High Yield Fund, excluding variable product issuer charges, underperformed the Fund’s style-specific index, but outperformed its broad market index. As lower quality bonds (CCC-rated and below) outperformed higher quality securities (BB- and B-rated) within the high yield market, the Fund’s strategy of maintaining its focus on BB- and B-rated issues benefited performance relative to its broad market benchmark. The primary detractor from relative performance versus the style-specific benchmark was our underweight position within financials as this non-traditional high yield sector posted a strong rally for the year.

     Your Fund’s long-term performance appears later in this report.

Fund vs. Indexes

Total returns, 12/31/08 to 12/31/09, excluding variable product issuer charges.

If variable product issuer charges were included, returns would be lower.

Series I Shares	52.79	%
Series II Shares	52.06
Barclays Capital U.S. Aggregate Index6 (Broad Market Index)	5.93
Barclays Capital U.S. Corporate High Yield Index6 (Style-Specific Index)	58.21
Lipper VUF High Current Yield Bond Funds Category Average6 (Peer Group)	43.48

⁶ Lipper Inc.

How we invest

We invest primarily in debt securities that are determined to be below investment-grade quality. These bonds, commonly known as “junk bonds’” are typically corporate bonds of U.S. based companies, many of which are moderately sized companies. We principally invest in junk bonds rated B or above, although we own holdings with lower quality ratings as well. We may invest in convertible, preferred, derivatives and foreign securities. We may also invest up to 25% of total assets in foreign securities of which 15% can be in developing markets.

     The primary driver of our security selection is fundamental analysis conducted by a team of analysts who specialize by industry. This bottom-up approach is augmented with an ongoing review of securities’ relative value and a top-down process that includes sector, economic and quantitative analysis. Changes in a security’s risk/return profile or relative value and top-down factors generally determine buy and sell decisions.

     Portfolio construction begins with a well-defined portfolio design that emphasizes diversification and establishes the target investment vehicles for generating the desired “alpha” (the extra return above a specific benchmark) as well as the risk parameters for the Fund. Investments are evaluated for liquidity and risk versus relative value. Working closely with other investment specialists and traders, we determine the timing and amount of each alpha decision to use in the portfolio at any time taking into account skill and market opportunities.

Sell decisions are based on:

§	Low equity value to debt, high subordination and negative free cash flow coupled with negative news, declining expectations or an increasing risk profile.
§	Very low yields.
§	Presentation of a better relative value opportunity.

Market conditions and your Fund

The year ended December 31, 2009, was truly a tale of two markets. During the first few months of the year, the equity and fixed-income markets continued to experience steep declines as severe problems in credit markets, a rapidly deteriorating housing market, rising energy and food prices and a deteriorating outlook for corporate earnings led to a global economic recession. The market was still suffering significant losses because of a lack of liquidity and an inventory surplus as troubled banks, brokers and insurers were trying to improve their balance sheets, raise cash and wind down operations. However, the U.S. economy began to show signs that the economic contraction was subsiding, and equity markets rapidly reversed direction beginning in March 2009, rallying strongly through most of the remaining months in the year.

By early spring there was some evidence that the pace of the economic downturn was slowing. Credit markets began to show signs of life again, as actions taken by the government to jump start the economy provided a boost to the markets. Liquidity improved significantly in the later part of the first quarter of 2009, as fund flow activity into high yield funds remained positive for 14 consecutive weeks, as reported by AMG Data Services.

Portfolio Composition¹

By credit quality

BBB		10.3	%
BB		27.4
B		38.1
CCC		19.1
CC		0.7
D		0.9
NR		1.6
Equity		0.7
Cash		1.2
Top Five Industries*
1. Oil & Gas Exploration & Production		6.2	%
2. Casinos & Gaming		4.8
3. Wireless Telecommunication Services		4.5
4. Consumer Finance		4.0
5. Health Care Facilities		3.8
Total Net Assets	$	61.1 million
Total Number of Holdings*		341
Top 10 Fixed Income Issuers*
1. HCA, Inc.		2.3	%
2. GMAC Inc.		1.9
3. MGM Mirage		1.7
4. Nielsen Finance LLC/Co.		1.7
5. Ford Motor Credit Co. LLC		1.7
6. United Air Lines Inc.		1.2
7. Travelport LLC		1.2
8. Continental Airlines Inc.		1.2
9. AMH Holdings Inc.		1.0
10. Ford Motor Co.		1.0

1	Sources: S&P, Moody’s, Fitch: This table is calculated based on the highest rating assigned by one of these agencies to an individual security. A credit rating is an assessment provided by a nationally recognized statistical rating organization (NRSRO) of the creditworthiness of an issuer with respect to debt obligations, including specific securities, money market instruments or other debts. Ratings are measured on a scale that generally ranges from AAA (highest) to D (lowest); ratings are subject to change without notice. “NR” indicates the debtor was not rated, and should not be interpreted as indicating low quality.
The Fund’s holdings are subject to change, and there is no assurance that the Fund will continue to hold any particular security.
*	Excluding money market fund holdings.

AIM V.I. High Yield Fund

     The influx of cash was driven by investors viewing the high yield sector as a favorable asset class given that the risk of high yield corporate defaults was already reflected in the valuations in this asset class. Given the reversal in risk appetite by investors, credit spreads tightened significantly from the all time highs posted in mid-December 2008.¹ The beginning of 2009 also witnessed three of the five best performing months on record for high yield bonds as measured by the Barclays Capital U.S. Corporate High Yield Index.¹

     The reporting period was truly a banner year for high yield bonds as credit markets began to show life again. The high yield sector was one of the top-performing asset classes in 2009.²

     During the year, we maintained our focus on BB- and B-rated bonds, but actively adjusted the weights in all tiers of the credit quality spectrum. We increased our lower quality exposure in 2009, largely to offset our underweight from 2008. This decision was positive for relative performance as CCC-rated bonds were up more than 90% in the index over 2009.²

     The primary detractor from relative performance for the year was our underweight position within the financials sector as this non-traditional high yield sector posted a strong rally over the second half of the year. Many financials sector securities fell into the high yield category during 2009 on credit downgrades. Our Fund was underweight in financials as we have been selective in participating in this sector. In recent months, we significantly increased our exposure to financials. Our approach was to complement high yield securities with those from the dislocated investment-grade universe. These investment-grade bonds offered compelling return opportunities with potentially lower default risk by having a more senior position in a firm’s debt structure.

     From a security selection perspective, our positions in Ford and Motors Liquidation Co. in the automotive industry contributed to Fund performance. We recently increased our exposure to these two companies on expectations of a sales recovery. In addition, recovery stories continued to be a key driver to performance for the year. Spansion Technology is an example of a company that filed for bankruptcy earlier in the year, but recovered significantly with the turn-around in the information technology sector and management’s focus on reducing expenses and improving working capital. We expected Spansion to provide a full recovery of both principal and interest.

     While the portfolio remained well-diversified across industries and issues, some of the Fund’s holdings experienced weaker performance. Indalex Holdings Finance was a detractor from Fund performance. The owner of the second-largest producer of soft aluminum extrusions in the U.S. sought bankruptcy protection from creditors, blaming collection efforts by Alcoa (not a Fund holding) and liquidity constraints. In addition, MagnaChip Semiconductor was also a detractor from performance. The company was simply beat by its competitors and harmed by the recession and lack of continued financing. In the case of both companies, we did not expect material future recoveries.

     As always, we appreciate your continued participation in AIM V.I. High Yield Fund.

1	Barclays Capital
2	Lipper Inc.

The views and opinions expressed in management’s discussion of Fund performance are those of Invesco Advisers, Inc. These views and opinions are subject to change at any time based on factors such as market and economic conditions. These views and opinions may not be relied upon as investment advice or recommendations, or as 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 Invesco Advisers, Inc. 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.

See important Fund and index disclosures later in this report.

Peter Ehret

Chartered Financial Analyst, senior portfolio manager, is lead manager of AIM V.I. High Yield Fund. Mr. Ehret joined Invesco Aim in 2001. He graduated cum laude with a B.S. in economics from the University of Minnesota. He also earned an M.S. in real estate appraisal and investment analysis from the University of Wisconsin-Madison.

Darren Hughes

Chartered Financial Analyst, senior portfolio manager, is manager of AIM V.I. High Yield Fund. He joined Invesco Aim in 1992. Mr. Hughes earned a B.B.A. in finance and economics from Baylor University.

AIM V.I. High Yield Fund

Your Fund’s Long-Term Performance

Results of a $10,000 Investment — Oldest Share Class since Inception
Index data from 4/30/98, Fund data from 5/1/98

1 Lipper Inc.

Past performance cannot guarantee comparable future results.

     This chart, which is a logarithmic chart, presents the fluctuations in the value of the Fund and its indexes. We believe that a logarithmic chart is more effective than other types of charts in illustrating changes in value during the early years shown in the chart. The vertical axis, the one that indicates the dollar value of an investment, is constructed with each segment representing a percent change in the value of the investment. In this chart, each segment represents a doubling, or 100% change, in the value of the investment. In other words, the space between $5,000 and $10,000 is the same size as the space between $10,000 and $20,000.

Average Annual Total Returns
As of 12/31/09

Series I Shares
Inception (5/1/98)	2.78	%
10 Years	3.04
5 Years	5.51
1 Year	52.79
Series II Shares
10 Years	2.79	%
5 Years	5.21
1 Year	52.06

Series II shares’ inception date is March 26, 2002. Returns since that date are historical. All other returns are the blended returns of the historical performance of Series II shares since their inception and the restated historical performance of Series I shares (for periods prior to inception of Series II shares) adjusted to reflect the Rule 12b-1 fees applicable to Series II shares. The inception date of Series I shares is May 1, 1998. The performance of the Fund’s Series I and Series II share classes will differ primarily due to different class expenses.

     The performance data quoted represent past performance and cannot guarantee comparable future results; current performance may be lower or higher. Please contact your variable product issuer or financial adviser for the most recent month-end variable product performance. Performance figures reflect Fund expenses, reinvested distributions and changes in net asset value. Investment return and principal value will fluctuate so that you may have a gain or loss when you sell shares.

     The net annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 0.96% and 1.21%, respectively.^1,2 The total annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 1.23% and 1.48%, respectively. The expense ratios presented above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

     AIM V.I. High Yield Fund, a series portfolio of AIM Variable Insurance Funds, is currently offered through insurance companies issuing variable products. You cannot purchase shares of the Fund directly. Performance figures given represent the Fund and are not intended to reflect actual variable product values. They do not reflect sales charges, expenses and fees assessed in connection with a variable product. Sales charges, expenses and fees, which are determined by the variable product issuers, will vary and will lower the total return.

     The most recent month-end performance data at the Fund level, excluding variable product charges, is available on the Invesco Aim automated information line, 866 702 4402. As mentioned above, for the most recent month-end performance including variable product charges, please contact your variable product issuer or financial adviser.

     Had the adviser not waived fees and/ or reimbursed expenses, performance would have been lower.

1	Total annual operating expenses less any contractual fee waivers and/or expense reimbursements by the adviser in effect through at least April 30, 2011. See current prospectus for more information.
2	Total annual operating expenses less any contractual fee waivers and/or expense reimbursements by the adviser in effect through at least June 30, 2010. See current prospectus for more information.

AIM V.I. High Yield Fund

AIM V.I. High Yield Fund’s investment objective is a high level of current income.

§	Unless otherwise stated, information presented in this report is as of December 31, 2009, and is based on total net assets.
§	Unless otherwise noted, all data provided by Invesco.

Principal risks of investing in the Fund

Credit risk is the risk of loss on an investment due to the deterioration of an issuer’s financial health. Such a deterioration of financial health may result in a reduction of the credit rating of the issuer’s securities and may lead to the issuer’s inability to honor its contractual obligations, including making timely payment of interest and principal.

     Investing in developing countries can add additional risk, such as high rates of inflation or sharply devalued currencies against the U.S. dollar. Transaction costs are often higher, and there may be delays in settlement procedures.

     Foreign securities have additional risks, including exchange rate changes, political and economic upheaval, relative lack of information, relatively low market liquidity, and the potential lack of strict financial and accounting controls and standards.

     Lower rated securities may be more susceptible to real or perceived adverse economic and competitive industry conditions, and the secondary markets in which lower rated securities are traded may be less liquid than higher grade securities. The loans in which the Fund may invest are typically noninvestment-grade and involve a greater risk of default on interest and principal payments and of price changes due to the changes in the credit quality of the issuer.

     Interest rate risk refers to the risk that bond prices generally fall as interest rates rise and vice versa.

     Leveraging entails risks such as magnifying changes in the value of the portfolio’s securities.

     Reinvestment risk is the risk that a bond’s cash flows will be reinvested at an interest rate below that of the original bond.

     There is no guarantee that the investment techniques and risk analysis used by the Fund’s portfolio managers will produce the desired results.

     The prices of securities held by the Fund may decline in response to market risks.

About indexes used in this report

The Barclays Capital U.S. Aggregate Index is an unmanaged index considered representative of the U.S. investment-grade, fixed-rate bond market.

     The Barclays Capital U.S. Corporate High Yield Index is an unmanaged index that covers the universe of fixed-rate, noninvestment-grade debt.

     The Lipper VUF High Current Yield Bond Funds Category Average represents an average of all of the variable insurance underlying funds in the Lipper High Current Yield Bond Funds category.

     The Fund is not managed to track the performance of any particular index, including the indexes defined here, and consequently, the performance of the Fund may deviate significantly from the performance of the indexes.

     A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group reflects fund expenses; performance of a market index does not.

Other information

The Chartered Financial Analyst^® (CFA^®) designation is globally recognized and attests to a charterholder’s success in a rigorous and comprehensive study program in the field of investment management and research analysis.

     The returns shown in management’s discussion of Fund performance are based on net asset values calculated for shareholder transactions. Generally accepted accounting principles require adjustments to be made to the net assets of the Fund at period end for financial reporting purposes, and as such, the net asset values for shareholder transactions and the returns based on those net asset values may differ from the net asset values and returns reported in the Financial Highlights. Additionally, the returns and net asset values shown throughout this report are at the Fund level only and do not include variable product issuer charges. If such charges were included, the total returns would be lower.

     Industry classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s.

AIM V.I. High Yield Fund

Schedule of Investments^(a)

December 31, 2009

	Principal
	Amount		Value
U.S. Dollar Denominated Bonds & Notes–92.30%
Advertising–0.32%
Lamar Media Corp., Sr. Unsec. Gtd. Sub. Global Notes, 7.25%, 01/01/13	$	195,000	$	195,000
Aerospace & Defense–0.41%
Alliant Techsystems Inc., Sr. Unsec. Gtd. Sub. Notes, 6.75%, 04/01/16		60,000		59,700
BE Aerospace, Inc., Sr. Unsec. Unsub. Notes, 8.50%, 07/01/18		180,000		191,700
				251,400
Agricultural Products–0.18%
CCL Finance Ltd. (Cayman Islands), Sr. Unsec. Gtd. Notes, 9.50%, 08/15/14(b)		105,000		110,114
Airlines–3.56%
American Airlines Pass Through Trust–Series 2009-1A, Sec. Pass Through Ctfs., 10.38%, 07/02/19		70,000		78,662
Continental Airlines Inc., Pass Through Ctfs., 9.00%, 07/08/16		165,000		177,066
Sr. Unsec. Unsub. Notes, 8.75%, 12/01/11		185,000		179,450
Series 2000-1, Class C-1, Sec. Sub. Pass Through Ctfs., 8.50%, 05/01/11		39,186		37,423
Series 2000-2, Class B, Sec. Sub. Pass Through Ctfs., 8.31%, 04/02/18		135,344		123,840
Series 2001-1, Class B, Sec. Sub. Pass Through Ctfs., 7.37%, 12/15/15		111,276		98,479
Series A, Global Pass Through Ctfs., 7.25%, 11/10/19		40,000		41,075
Series B, Global Pass Through Ctfs., 9.25%, 05/10/17		50,000		50,906
Delta Air Lines, Inc., Sr. Sec. Notes, 9.50%, 09/15/14(b)		45,000		47,025
Series 2002-1, Class C, Sec. Pass Through Ctfs., 7.78%, 01/02/12		321,032		311,401
Series 2007-1, Class C, Sec. Global Pass Through Ctfs., 8.95%, 08/10/14		238,162		215,537
UAL Corp., Series 2000-2, Class A-2, Sec. Pass Through Ctfs., 7.19%, 04/01/11		11,520		11,534
Series 2007-1, Class B, Sr. Sec. Gtd. Global Pass Through Ctfs., 7.34%, 07/02/19(b)		126,822		89,726
United Air Lines Inc., Gtd. Global Pass Through Ctfs., 9.75%, 01/15/17		200,000		207,125
Sec. Gtd., 12.00%, 01/15/16(b)		260,000		256,750
Sr. Sec. Gtd. Global Pass Through Ctfs., 10.40%, 11/01/16		235,000		250,422
				2,176,421
Alternative Carriers–2.24%
Intelsat Intermediate Holding Co. Ltd. (Bermuda), Sr. Unsec. Gtd. Disc. Global Notes, 9.50%, 02/01/15(c)		560,000		578,200
Intelsat Jackson Holdings Ltd. (Bermuda), Sr. Unsec. Gtd. Global Notes, 11.25%, 06/15/16		315,000		341,775
Intelsat Subsidiary Holding Co. Ltd. (Bermuda), Sr. Unsec. Gtd. Global Notes, 8.50%, 01/15/13		170,000		174,250
Level 3 Financing Inc., Sr. Unsec. Gtd. Unsub. Global Notes, 9.25%, 11/01/14		285,000		273,600
				1,367,825
Aluminum–1.41%
Century Aluminum Co., Sr. Sec. Notes, 8.00%, 05/15/14		265,630		251,020
Novelis Inc. (Canada), Sr. Unsec. Gtd. Global Notes, 7.25%, 02/15/15		634,000		608,640
				859,660
Apparel Retail–1.17%
Collective Brands, Inc., Sr. Unsec. Gtd. Sub. Global Notes, 8.25%, 08/01/13		450,000		460,125
Limited Brands Inc., Sr. Notes, 8.50%, 06/15/19(b)		140,000		151,550
Sr. Unsec. Notes, 5.25%, 11/01/14		105,000		100,800
				712,475
Apparel, Accessories & Luxury Goods–1.84%
American Achievement Corp., Sr. Unsec. Gtd. Sub. Notes, 8.25%, 04/01/12(b)		205,000		206,025
Hanesbrands, Inc.–Series B, Sr. Unsec. Gtd. Floating Rate Global Notes, 3.83%, 12/15/14(d)		285,000		272,887

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

AIM V.I. High Yield Fund

	Principal
	Amount		Value
Apparel, Accessories & Luxury Goods–(continued)
Levi Strauss & Co., Sr. Unsec. Unsub. Global Notes, 8.88%, 04/01/16	$	225,000	$	237,094
Perry Ellis International, Inc., Series B, Sr. Unsec. Gtd. Sub. Global Notes, 8.88%, 09/15/13		325,000		325,000
Quiksilver Inc., Sr. Unsec. Gtd. Global Notes, 6.88%, 04/15/15		100,000		82,500
				1,123,506
Auto Parts & Equipment–1.44%
Allison Transmission Inc., Sr. Unsec. Gtd. Notes, 11.00%, 11/01/15(b)		330,000		348,975
Tenneco Inc., Sr. Unsec. Gtd. Global Notes, 8.13%, 11/15/15		145,000		147,175
TRW Automotive Inc., Sr. Unsec. Gtd. Unsub. Notes, 7.25%, 03/15/17(b)		345,000		336,375
Visteon Corp., Sr. Unsec. Unsub. Notes, 7.00%, 03/10/14(e)		180,000		47,250
				879,775
Automobile Manufacturers–1.46%
Ford Motor Co., Sr. Unsec. Conv. Notes, 4.25%, 11/15/16		165,000		208,354
Sr. Unsec. Unsub. Global Notes, 7.45%, 07/16/31		475,000		425,125
Motors Liquidation Co., Sr. Unsec. Unsub. Global Notes, 7.20%, 01/15/11(e)		445,000		116,813
Sr. Unsec. Unsub. Notes, 8.38%, 07/15/33(e)		525,000		144,375
				894,667
Broadcasting–0.77%
Belo Corp., Sr. Unsec. Unsub. Notes, 6.75%, 05/30/13		365,000		361,350
8.00%, 11/15/16		15,000		15,450
Clear Channel Worldwide Holdings Inc., Sr. Unsec. Gtd. Unsub. Notes, 9.25%, 12/15/17(b)		70,000		72,450
Sr. Unsec. Unsub. Gtd. Notes, 9.25%, 12/15/17(b)		20,000		20,550
				469,800
Building Products–3.24%
AMH Holdings Inc., Sr. Unsec. Global Notes Disc., 11.25%, 03/01/14		655,000		635,350
Building Materials Corp. of America, Sec. Gtd. Second Lien Global Notes, 7.75%, 08/01/14		415,000		412,925
Goodman Global Group Inc., Sr. Disc. Notes, 12.48%, 12/15/14(b)(f)		445,000		253,650
Nortek Inc., Sr. Sec. Global Notes, 11.00%, 12/01/13		215,955		228,912
Ply Gem Industries Inc., Sr. Sec. Gtd. First & Second Lien Global Notes, 11.75%, 06/15/13		285,000		286,425
Sr. Unsec. Gtd. Sub. Global Notes, 9.00%, 02/15/12		135,000		115,425
USG Corp., Sr. Unsec. Gtd. Notes, 9.75%, 08/01/14(b)		45,000		48,038
				1,980,725
Cable & Satellite–1.70%
Cablevision Systems Corp., Sr. Notes, 8.63%, 09/15/17(b)		135,000		141,244
CSC Holdings LLC, Sr. Unsec. Notes, 8.50%, 04/15/14(b)		115,000		122,906
8.63%, 02/15/19(b)		30,000		32,438
Hughes Network Systems LLC/HNS Finance Corp., Sr. Unsec. Gtd. Global Notes, 9.50%, 04/15/14		150,000		155,625
Virgin Media Finance PLC (United Kingdom) Sr. Unsec. Gtd. Global Notes, 8.75%, 04/15/14		50,000		51,687
Sr. Unsec. Gtd. Sub. Global Notes, 8.38%, 10/15/19		100,000		103,375
Series 1, Sr. Gtd. Global Bonds, 9.50%, 08/15/16		180,000		194,400
XM Satellite Radio Inc., Sr. Sec. Notes, 11.25%, 06/15/13(b)		220,000		235,950
				1,037,625
Casinos & Gaming–4.99%
Great Canadian Gaming Corp. (Canada), Sr. Unsec. Gtd. Sub. Notes, 7.25%, 02/15/15(b)		260,000		250,900
Harrah’s Operating Co. Inc., Sr. Sec. Notes, 11.25%, 06/01/17(b)		275,000		292,187
Sr. Unsec. Gtd. Unsub. Global Bonds, 5.63%, 06/01/15		265,000		159,000
Mandalay Resort Group, Sr. Unsec. Gtd. Sub. Global Notes, 9.38%, 02/15/10		65,000		65,000
MGM Mirage, Sr. Sec. Gtd. Notes, 13.00%, 11/15/13		130,000		150,150
Sr. Sec. Notes, 10.38%, 05/15/14(b)		165,000		180,675
11.13%, 11/15/17(b)		165,000		183,975
Sr. Unsec. Gtd. Global Notes, 6.63%, 07/15/15		273,000		212,257
Sr. Unsec. Gtd. Unsub. Notes, 8.50%, 09/15/10		310,000		310,000
5.88%, 02/27/14		10,000		8,100
Pinnacle Entertainment, Inc., Sr. Notes, 8.63%, 08/01/17(b)		285,000		290,700

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

AIM V.I. High Yield Fund

	Principal
	Amount		Value
Casinos & Gaming–(continued)
Scientific Games International Inc., Sr. Sub. Unsec. Notes, 9.25%, 06/15/19(b)	$	45,000	$	47,419
Seneca Gaming Corp., Sr. Unsec. Unsub. Global Notes, 7.25%, 05/01/12		160,000		156,800
Series B, Sr. Unsec. Global Notes, 7.25%, 05/01/12		95,000		93,100
Snoqualmie Entertainment Authority, Sr. Sec. Floating Rate Notes, 4.68%, 02/01/14 (Acquired 05/04/09-11/09/09; Cost $133,544)(b)(d)		295,000		156,350
Sr. Sec. Notes, 9.13%, 02/01/15(b)		220,000		121,000
Tunica-Biloxi Gaming Authority, Sr. Unsec. Notes, 9.00%, 11/15/15(b)		130,000		117,650
Wynn Las Vegas Capital LLC/Corp., Sec. First Mortgage Notes, 7.88%, 11/01/17(b)		130,000		132,275
Sr. Sec. Gtd. First Mortgage Global Notes, 6.63%, 12/01/14		65,000		63,294
6.63%, 12/01/14		60,000		58,425
				3,049,257
Commodity Chemicals–0.12%
Georgia Gulf Corp., Sr. Sec. Notes, 9.00%, 01/15/17(b)		50,000		50,750
Westlake Chemical Corp., Sr. Unsec. Gtd. Notes, 6.63%, 01/15/16		25,000		24,000
				74,750
Computer Storage & Peripherals–0.09%
Seagate Technology International, Sr. Sec. Gtd. Notes, 10.00%, 05/01/14(b)		50,000		55,625
Construction & Engineering–0.55%
MasTec, Inc., Sr. Unsec. Gtd. Global Notes, 7.63%, 02/01/17		350,000		338,188
Construction Materials–0.85%
Texas Industries, Inc., Sr. Unsec. Gtd. Unsub. Global Notes, 7.25%, 07/15/13		65,000		64,187
7.25%, 07/15/13		170,000		167,875
U.S. Concrete, Inc., Sr. Unsec. Gtd. Sub. Global Notes, 8.38%, 04/01/14		475,000		287,375
				519,437
Construction, Farm Machinery & Heavy Trucks–1.57%
Case New Holland Inc., Sr. Unsec. Gtd. Unsub. Notes, 7.75%, 09/01/13(b)		125,000		127,812
CNH America LLC, Sr. Unsec. Gtd. Notes, 7.25%, 01/15/16		60,000		59,550
Navistar International Corp., Sr. Sub. Unsec. Conv. Notes, 3.00%, 10/15/14		175,000		183,033
Sr. Unsec. Gtd. Notes, 8.25%, 11/01/21		105,000		107,756
Terex Corp., Sr. Unsec. Global Notes, 10.88%, 06/01/16		95,000		106,400
Sr. Unsec. Gtd. Sub. Global Notes, 7.38%, 01/15/14		95,000		96,425
Titan International, Inc., Sr. Unsec. Gtd. Global Notes, 8.00%, 01/15/12		285,000		280,725
				961,701
Consumer Finance–4.01%
Capital One Capital VI, Jr. Sub. Gtd. Bonds, 8.88%, 05/15/40		150,000		160,489
Ford Motor Credit Co. LLC, Sr. Unsec. Unsub. Global Notes, 7.50%, 08/01/12		140,000		141,750
7.00%, 10/01/13		325,000		327,437
Sr. Unsec. Unsub. Notes, 9.88%, 08/10/11		120,000		126,000
8.70%, 10/01/14		390,000		409,500
GMAC Inc., Sr. Unsec. Gtd. Notes, 6.75%, 12/01/14(b)		294,000		285,180
8.00%, 11/01/31(b)		266,000		244,720
Sr. Unsec. Gtd. Unsub. Notes, 6.88%, 09/15/11(b)		25,000		24,938
Sr. Unsec. Unsub. Global Notes, 6.88%, 09/15/11		620,000		616,900
National Money Mart Co., Sr. Gtd. Notes, 10.38%, 12/15/16(b)		110,000		112,750
				2,449,664
Data Processing & Outsourced Services–1.62%
First Data Corp., Sr. Unsec. Gtd. Global Notes, 9.88%, 09/24/15		375,000		349,687
Sr. Unsec. Gtd. Unsub. Global Notes, 9.88%, 09/24/15		155,000		144,538
SunGard Data Systems Inc., Sr. Unsec. Gtd. Global Notes, 9.13%, 08/15/13		386,000		398,545
Sr. Unsec. Gtd. Sub. Global Notes, 10.25%, 08/15/15		90,000		96,300
				989,070
Department Stores–0.37%
Macy’s Retail Holdings Inc., Sr. Unsec. Gtd. Notes, 5.35%, 03/15/12		220,000		226,325

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

AIM V.I. High Yield Fund

	Principal
	Amount		Value
Distillers & Vintners–0.18%
Constellation Brands Inc., Sr. Unsec. Gtd. Global Notes, 7.25%, 05/15/17	$	110,000	$	111,650
Diversified Banks–1.56%
BAC Capital Trust VI, Jr. Unsec. Gtd. Sub. Capital Securities Notes, 5.63%, 03/08/35		185,000		148,914
BankAmerica Capital II–Series 2, Jr. Unsec. Gtd. Sub. Trust Pfd. Capital Securities, 8.00%, 12/15/26		120,000		118,200
Citigroup Inc., Sr. Unsec. Notes, 8.13%, 07/15/39		50,000		57,332
Halyk Savings Bank of Kazakhstan (Netherlands), Unsec. Gtd. Unsub. Notes, 7.25%, 05/03/17(b)		100,000		91,082
JPMorgan Chase Capital XXVII–Series AA, Jr. Unsec. Gtd. Sub. Notes, 7.00%, 11/01/39		200,000		204,114
Northern Rock Asset Management PLC (United Kingdom), Sub. Unsec. Yankee Notes, 5.60%, 04/29/49(b)(g)		125,000		17,500
Royal Bank of Scotland Group PLC (United Kingdom), Sr. Unsec. Unsub. Global Notes, 6.40%, 10/21/19		100,000		99,412
VTB Capital S.A. (Luxembourg), Sr. Sec. Putable Notes, 6.88%, 05/29/18(b)		220,000		219,475
				956,029
Diversified Metals & Mining–1.65%
FMG Finance Pty. Ltd. (Australia), Sr. Sec. Gtd. Notes, 10.63%, 09/01/16(b)		370,000		411,162
Teck Resources Ltd. (Canada), Sr. Sec. Global Notes, 10.75%, 05/15/19		230,000		274,563
Vedanta Resources PLC (United Kingdom), Sr. Unsec. Unsub. Notes, 9.50%, 07/18/18(b)		320,000		324,862
				1,010,587
Diversified Support Services–1.45%
Education Management LLC/ Education Management Finance Corp., Sr. Unsec. Gtd. Global Notes, 8.75%, 06/01/14		105,000		108,412
Mobile Mini, Inc., Sr. Unsec. Gtd. Global Notes, 9.75%, 08/01/14		60,000		62,700
Travelport LLC, Sr. Unsec. Gtd. Sub. Global Notes, 11.88%, 09/01/16		190,000		203,300
Sr. Unsec. Gtd. Unsub. Global Notes, 9.88%, 09/01/14		485,000		509,250
				883,662
Drug Retail–0.93%
General Nutrition Centers Inc., Sr. Unsec. Unsub. Gtd. PIK Floating Rate Global Notes, 5.18%, 03/15/14(d)		275,000		255,750
Rite Aid Corp., Sr. Sec. Gtd. Notes, 10.38%, 07/15/16		190,000		204,250
Sr. Sec. Unsub. Global Notes, 9.75%, 06/12/16		100,000		109,375
				569,375
Electric Utilities–0.67%
Elwood Energy LLC, Sr. Sec. Global Notes, 8.16%, 07/05/26		134,276		124,541
LSP Energy L.P./LSP Batesville Funding Corp., Series C, Sr. Sec. Mortgage Bonds, 7.16%, 01/15/14		110,826		98,397
Series D, Sr. Sec. Bonds, 8.16%, 07/15/25		275,000		185,625
				408,563
Electronic Manufacturing Services–0.06%
Jabil Circuit, Inc., Sr. Unsec. Notes, 7.75%, 07/15/16		35,000		37,013
Food Retail–0.73%
American Stores Co., Sr. Unsec. Bonds, 8.00%, 06/01/26		285,000		260,775
New Albertsons Inc., Sr. Unsec. Bonds, 8.00%, 05/01/31		205,000		188,344
				449,119
Forest Products–0.08%
Weyerhaeuser Co., Sr. Unsec. Unsub. Deb., 6.88%, 12/15/33		55,000		49,331
Gas Utilities–0.32%
Ferrellgas Escrow LLC/Ferrellgas Finance Escrow Corp., Sr. Unsec. Global Notes, 6.75%, 05/01/14		200,000		197,500
General Merchandise Stores–0.21%
Susser Holdings LLC & Susser Finance Corp., Sr. Unsec. Gtd. Global Notes, 10.63%, 12/15/13		125,000		130,781
Health Care Equipment–0.45%
DJO Finance LLC/DJO Finance Corp., Sr. Unsec. Gtd. Global Notes, 10.88%, 11/15/14		260,000		274,625
Health Care Facilities–3.77%
Community Health Systems Inc., Sr. Unsec. Gtd. Unsub. Global Notes, 8.88%, 07/15/15		405,000		420,694
HCA, Inc., Sec. Gtd. Global Notes, 9.13%, 11/15/14		240,000		254,700
9.25%, 11/15/16		220,000		238,150
Sr. Sec. Gtd. Notes, 7.88%, 02/15/20(b)		345,000		361,387

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

AIM V.I. High Yield Fund

	Principal
	Amount		Value
Health Care Facilities–(continued)
HCA, Inc.,–(continued)
Sr. Sec. Gtd. PIK Global Notes, 9.63%, 11/15/16	$	100,000	$	109,000
Sr. Sec. Notes, 9.88%, 02/15/17(b)		130,000		143,975
8.50%, 04/15/19(b)		120,000		130,050
Sr. Unsec. Global Notes, 6.38%, 01/15/15		55,000		52,525
Sr. Unsec. Unsub. Notes, 7.19%, 11/15/15		130,000		121,550
Healthsouth Corp., Sr. Unsec. Unsub. Gtd. Notes, 8.13%, 02/15/20		90,000		89,325
Tenet Healthcare Corp., Sr. Unsec. Notes, 7.38%, 02/01/13		380,000		382,850
				2,304,206
Health Care Services–1.42%
Multiplan Inc., Sr. Unsec. Sub. Notes, 10.38%, 04/15/16(b)		285,000		279,300
Universal Hospital Services Inc., Sr. Sec. PIK Sub. Global Notes, 8.50%, 06/01/15		190,000		188,100
US Oncology Inc., Sr. Sec. Gtd. Global Notes, 9.13%, 08/15/17		145,000		152,975
Viant Holdings Inc., Sr. Unsec. Gtd. Sub. Notes, 10.13%, 07/15/17(b)		247,000		245,765
				866,140
Health Care Supplies–0.23%
Inverness Medical Innovations Inc., Sr. Sub. Unsec. Gtd. Notes, 9.00%, 05/15/16		135,000		139,050
Homebuilding–0.19%
TOUSA, Inc., Sr. Unsec. Gtd. Global Notes, 9.00%, 07/01/10(e)		60,000		31,200
9.00%, 07/01/10(e)		163,000		84,760
				115,960
Hotels, Resorts & Cruise Lines–0.96%
Royal Caribbean Cruises Ltd., Sr. Unsec. Unsub. Global Notes, 6.88%, 12/01/13		160,000		156,800
Sr. Unsec. Unsub. Yankee Notes, 7.25%, 03/15/18		160,000		149,600
Starwood Hotels & Resorts Worldwide, Inc., Sr. Unsec. Unsub. Notes, 7.88%, 10/15/14		105,000		112,532
7.15%, 12/01/19		165,000		165,825
				584,757
Housewares & Specialties–0.43%
Yankee Acquisition Corp.–Series B, Sr. Gtd. Global Notes, 8.50%, 02/15/15		260,000		260,000
Independent Power Producers & Energy Traders–2.24%
AES Corp. (The), Sr. Unsec. Notes, 9.75%, 04/15/16(b)		150,000		165,000
Sr. Unsec. Unsub. Global Notes, 8.00%, 10/15/17		65,000		66,950
AES Red Oak LLC–Series A, Sr. Sec. Bonds, 8.54%, 11/30/19		301,150		301,903
Dynegy Holdings Inc., Sr. Unsec. Global Notes, 8.38%, 05/01/16		325,000		310,375
Intergen N.V. (Netherlands), Sr. Sec. Gtd. Bonds, 9.00%, 06/30/17(b)		50,000		52,625
NRG Energy, Inc., Sr. Unsec. Gtd. Notes, 7.38%, 02/01/16		190,000		190,950
Sr. Unsec. Gtd. Unsub. Notes, 7.38%, 01/15/17		155,000		156,162
Sr. Unsec. Unsub. Gtd. Notes, 7.25%, 02/01/14		120,000		122,100
				1,366,065
Industrial Conglomerates–0.31%
Aleris International Inc., Sr. Unsec. Gtd. PIK Global Notes, 9.00%, 12/15/14(e)		215,000		1,075
Indalex Holding Corp.–Series B, Sr. Sec. Gtd. Global Notes, 11.50%, 02/01/14(e)		230,000		2,300
RBS Global Inc./Rexnord LLC, Sr. Unsec. Gtd. Unsub. Global Notes, 9.50%, 08/01/14		185,000		185,925
				189,300
Industrial Machinery–0.10%
Columbus McKinnon Corp., Sr. Unsec. Gtd. Sub. Global Notes, 8.88%, 11/01/13		63,000		63,945
Integrated Oil & Gas–0.19%
Lukoil International Finance B.V. (Netherlands), Sr. Unsec. Unsub. Gtd. Notes, 7.25%, 11/05/19(b)		115,000		115,271
Integrated Telecommunication Services–1.64%
Frontier Communications Corp., Sr. Unsec Notes, 6.25%, 01/15/13		8,000		8,040
Sr. Unsec. Global Notes, 7.88%, 01/15/27		340,000		314,500
Hawaiian Telcom Communications Inc.–Series B, Sr. Unsec. Gtd. Unsub. Global Notes, 9.75%, 05/01/13(e)		360,000		9,900
Nordic Telephone Co. Holdings (Denmark), Sr. Sec. Bonds, 8.88%, 05/01/16(b)		240,000		256,200
Qwest Communications International Inc., Sr. Unsec. Gtd. Notes, 8.00%, 10/01/15(b)		85,000		87,975

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

AIM V.I. High Yield Fund

	Principal
	Amount		Value
Integrated Telecommunication Services–(continued)
Qwest Corp., Sr. Unsec. Unsub. Global Notes, 8.38%, 05/01/16	$	60,000	$	64,331
Wind Acquisition Finance S.A. (Luxembourg), Sr. Sec. Gtd. Sub. Notes, 11.75%, 07/15/17(b)		240,000		264,000
				1,004,946
Investment Banking & Brokerage–1.26%
E*Trade Financial Corp., Sr. Unsec. Unsub. Global Notes, 7.38%, 09/15/13		95,000		89,775
Sr. Unsec. Unsub. Notes, 7.88%, 12/01/15		265,000		247,775
Merrill Lynch & Co. Inc., Unsec. Sub. Global Notes, 6.11%, 01/29/37		470,000		432,693
				770,243
Leisure Facilities–0.34%
Speedway Motorsports Inc., Sr. Unsec. Unsub. Gtd. Global Notes, 8.75%, 06/01/16		55,000		58,163
Universal City Development Partners Ltd., Sr. Notes, 8.88%, 11/15/15(b)		125,000		123,125
Sr. Sub. Notes, 10.88%, 11/15/16(b)		25,000		25,625
				206,913
Life & Health Insurance–1.45%
MetLife Inc., Jr. Sub. Global Notes, 10.75%, 08/01/39		210,000		261,069
New York Life Insurance Co., Sub. Notes, 6.75%, 11/15/39(b)		175,000		178,651
Pacific Life Insurance Co., Sub. Notes, 9.25%, 06/15/39(b)		105,000		121,959
Protective Life Corp., Sr. Unsec. Notes, 7.38%, 10/15/19		320,000		322,289
				883,968
Marine Ports & Services–0.17%
Novorossiysk Port Capital S.A. (Luxembourg), Sec. Loan Participation Euro Notes, 7.00%, 05/17/12		100,000		102,750
Movies & Entertainment–0.98%
AMC Entertainment Inc., Sr. Unsec. Global Notes, 8.75%, 06/01/19		35,000		35,744
Sr. Unsec. Sub. Gtd. Global Notes, 8.00%, 03/01/14		375,000		359,062
Cinemark USA Inc., Sr. Gtd. Notes, 8.63%, 06/15/19(b)		95,000		99,037
Marquee Holdings Inc., Sr. Unsec. Disc. Global Notes, 12.00%, 08/15/14(c)		125,000		104,219
				598,062
Multi-Line Insurance–1.43%
Hartford Financial Services Group Inc. (The), Sr. Unsec. Global Notes, 5.95%, 10/15/36		90,000		74,648
Liberty Mutual Group Inc., Sr. Unsec. Bonds, 7.50%, 08/15/36(b)		95,000		87,591
Sr. Unsec. Notes, 6.70%, 08/15/16(b)		70,000		68,607
Liberty Mutual Insurance Co., Unsec. Sub. Notes, 8.50%, 05/15/25(b)		235,000		236,627
Nationwide Mutual Insurance Co., Notes, 9.38%, 08/15/39(b)		385,000		404,790
				872,263
Multi-Sector Holdings–0.31%
Stena A.B. (Sweden), Sr. Unsec. Global Notes, 7.50%, 11/01/13		195,000		190,856
Office Services & Supplies–0.20%
ACCO Brands Corp., Sr. Unsec. Gtd. Sub. Global Notes, 7.63%, 08/15/15		130,000		121,225
Oil & Gas Equipment & Services–0.26%
Bristow Group, Inc., Sr. Unsec. Gtd. Global Notes, 7.50%, 09/15/17		160,000		160,000
Oil & Gas Exploration & Production–6.23%
Chaparral Energy Inc., Sr. Unsec. Gtd. Global Notes, 8.50%, 12/01/15		155,000		137,175
8.88%, 02/01/17		305,000		269,162
Chesapeake Energy Corp., Sr. Unsec. Gtd. Global Notes, 6.38%, 06/15/15		254,000		250,190
6.88%, 11/15/20		100,000		97,000
Cimarex Energy Co., Sr. Unsec. Gtd. Notes, 7.13%, 05/01/17		225,000		228,094
Concho Resources Inc., Sr. Unsec. Gtd. Notes, 8.63%, 10/01/17		25,000		26,313
Continental Resources Inc., Sr. Unsec. Unsub. Notes, 8.25%, 10/01/19(b)		50,000		52,688
Delta Petroleum Corp., Sr. Unsec. Gtd. Global Notes, 7.00%, 04/01/15		575,000		412,562
Denbury Resources Inc., Sr. Gtd. Sub. Notes, 9.75%, 03/01/16		175,000		187,687
Encore Acquisition Co., Sr. Gtd. Sub. Notes, 9.50%, 05/01/16		45,000		47,531
Sr. Unsec. Gtd. Sub. Global Notes, 6.00%, 07/15/15		295,000		295,553
Gaz Capital S.A. (Luxembourg), Sr. Unsec. Unsub. Notes, 8.15%, 04/11/18(b)		250,000		264,140
McMoRan Exploration Co., Sr. Unsec. Gtd. Notes, 11.88%, 11/15/14		265,000		272,619

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

AIM V.I. High Yield Fund

	Principal
	Amount		Value
Oil & Gas Exploration & Production–(continued)
Newfield Exploration Co., Sr. Unsec. Sub. Global Notes, 7.13%, 05/15/18	$	40,000	$	40,500
OPTI Canada Inc. (Canada), Sr. Sec. Notes, 9.00%, 12/15/12(b)		60,000		61,500
Pioneer Natural Resources Co., Sr. Unsec. Notes, 7.50%, 01/15/20		150,000		151,125
Plains Exploration & Production Co., Sr. Unsec. Gtd. Notes, 7.75%, 06/15/15		250,000		256,250
7.63%, 06/01/18		185,000		185,000
Sr. Unsec. Gtd. Unsub. Notes, 8.63%, 10/15/19		100,000		103,125
Range Resources Corp., Sr. Unsec. Gtd. Sub. Notes, 7.50%, 05/15/16		80,000		82,400
7.50%, 10/01/17		315,000		326,025
Southwestern Energy Co., Sr. Gtd. Global Notes, 7.50%, 02/01/18		55,000		58,713
				3,805,352
Oil & Gas Refining & Marketing–0.63%
Tesoro Corp., Sr. Unsec. Gtd. Unsub. Global Bonds, 6.50%, 06/01/17		95,000		88,825
United Refining Co.–Series 2, Sr. Unsec. Gtd. Global Notes, 10.50%, 08/15/12		315,000		298,463
				387,288
Oil & Gas Storage & Transportation–1.96%
Copano Energy LLC/ Capano Energy Finance Corp., Sr. Unsec. Gtd. Global Notes, 8.13%, 03/01/16		200,000		204,000
Inergy L.P./Inergy Finance Corp., Sr. Unsec. Gtd. Global Notes, 8.75%, 03/01/15		135,000		139,387
8.25%, 03/01/16		85,000		86,913
MarkWest Energy Partners L.P./MarkWest Energy Finance Corp.–Series B, Sr. Unsec. Gtd. Global Notes, 8.75%, 04/15/18		370,000		382,487
Regency Energy Partners L.P./Regency Energy Finance Corp., Sr. Unsec. Gtd. Global Notes, 8.38%, 12/15/13		255,000		265,200
Williams Partners L.P./Williams Partners Finance Corp., Sr. Unsec. Global Notes, 7.25%, 02/01/17		115,000		117,300
				1,195,287
Other Diversified Financial Services–0.87%
Cantor Fitzgerald L.P., Bonds, 7.88%, 10/15/19(b)		220,000		221,412
CenterCredit International B.V. (Netherlands), Unsec. Gtd. Unsub. Bonds, 8.63%, 01/30/14(b)		100,000		92,887
Countrywide Capital III–Series B, Jr. Unsec. Gtd. Sub. Capital Securities, 8.05%, 06/15/27		225,000		217,125
				531,424
Packaged Foods & Meats–0.94%
Chiquita Brands International, Inc., Sr. Unsec. Unsub. Global Notes, 7.50%, 11/01/14		60,000		60,225
8.88%, 12/01/15		60,000		61,425
Del Monte Corp., Sr. Sub. Notes, 7.50%, 10/15/19(b)		30,000		30,975
Dole Food Co. Inc., Sr. Sec. Notes, 13.88%, 03/15/14(b)		62,000		74,245
8.00%, 10/01/16(b)		60,000		61,650
Tyson Foods Inc., Sr. Unsec. Unsub. Global Notes, 10.50%, 03/01/14		250,000		288,125
				576,645
Paper Packaging–0.54%
Cascades Inc. (Canada), Sr. Gtd. Notes, 7.88%, 01/15/20(b)		85,000		86,487
Graham Packaging Co. L.P./GPC Capital Corp. I, Sr. Unsec. Gtd. Sub. Global Notes, 9.88%, 10/15/14		130,000		132,925
Sr. Gtd. Notes, 8.25%, 01/01/17(b)		90,000		88,875
Sealed Air Corp., Sr. Notes, 7.88%, 06/15/17(b)		20,000		21,369
				329,656
Paper Products–2.91%
Abitibi-Consolidated Co. of Canada (Canada), Sr. Sec. Gtd. Notes, 13.75%, 04/01/11(b)(e)		178,244		182,700
Domtar Corp., Sr. Unsec. Gtd. Global Notes, 5.38%, 12/01/13		125,000		121,875
Exopack Holding Corp., Sr. Unsec. Gtd. Global Notes, 11.25%, 02/01/14		210,000		214,725
Georgia-Pacific LLC, Sr. Unsec. Gtd. Notes, 7.00%, 01/15/15(b)		90,000		91,575
Mercer International Inc., Sr. Unsec. Global Notes, 9.25%, 02/15/13		537,000		441,682
Neenah Paper, Inc., Sr. Unsec. Gtd. Global Notes, 7.38%, 11/15/14		179,000		164,233
PE Paper Escrow GmbH (Austria), Sr. Sec. Notes, 12.00%, 08/01/14(b)		100,000		108,304
Verso Paper Holdings LLC/Verso Paper Inc., Series B, Sr. Sec. Gtd. Global Notes, 9.13%, 08/01/14		175,000		168,875
Sr. Unsec. Gtd. Sub. Global Notes, 11.38%, 08/01/16		350,000		283,500
				1,777,469
Personal Products–0.43%
NBTY, Inc., Sr. Unsec. Gtd. Sub. Global Notes, 7.13%, 10/01/15		259,000		260,943
Pharmaceuticals–0.16%
Elan Finance Corp./PLC, Sr. Gtd. Notes, 8.75%, 10/15/16(b)		105,000		100,800

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

AIM V.I. High Yield Fund

	Principal
	Amount		Value
Property & Casualty Insurance–0.53%
Crum & Forster Holdings Corp., Sr. Unsec. Unsub. Global Notes, 7.75%, 05/01/17	$	335,000	$	322,019
Publishing–2.07%
Dex Media Inc., Sr. Unsec. Disc. Global Notes, 9.00%, 11/15/13(e)		318,000		84,270
Gannett Co. Inc., Sr. Unsec. Gtd. Notes, 8.75%, 11/15/14(b)		90,000		93,487
Sr. Unsec. Gtd. Unsub. Notes, 9.38%, 11/15/17(b)		45,000		46,688
MediMedia USA Inc., Sr. Sub. Notes, 11.38%, 11/15/14(b)		30,000		25,538
Nielsen Finance LLC/Co., Sr. Global Notes, 11.63%, 02/01/14		85,000		95,944
Sr. Unsec. Gtd. Global Notes, 11.50%, 05/01/16		125,000		140,312
Sr. Unsec. Gtd. Sub. Disc. Global Notes, 12.50%, 08/01/16(c)		845,000		775,287
Reader’s Digest Association Inc. (The), Sr. Unsec. Gtd. Sub. Global Notes, 9.00%, 02/15/17(e)		210,000		3,150
				1,264,676
Regional Banks–0.43%
Zions Bancorporation, Sr. Unsec. Notes, 7.75%, 09/23/14		300,000		265,313
Restaurants–0.42%
Arcos Dorados B.V. (Argentina), Sr. Unsec. Gtd. Notes, 7.50%, 10/01/19(b)		265,000		255,143
Semiconductor Equipment–0.03%
Amkor Technology Inc., Sr. Unsec. Gtd. Notes, 9.25%, 06/01/16		20,000		21,300
Semiconductors–2.97%
Avago Technologies Finance Pte./Avago Technologies U.S./ Avago Technologies Wireless (Singapore), Sr. Unsec. Gtd. Sub. Global Notes, 11.88%, 12/01/15		120,000		132,900
Freescale Semiconductor Inc., Sr. Unsec. Gtd. Global Notes, 8.88%, 12/15/14		425,000		397,375
MagnaChip Semiconductor S.A./MagnaChip Semiconductor Finance Co. (South Korea), Sr. Sec. Gtd. Global Notes, 6.88%, 12/15/11(e)		360,000		8,100
NXP BV/NXP Funding LLC (Netherlands), Sr. Sec. Gtd. Global Notes, 7.88%, 10/15/14		309,000		281,190
Spansion Inc., Sr. Sec. Floating Rate Notes, 3.79%, 06/01/13(b)(d)(e)		440,000		447,700
Viasystems Inc., Sr. Unsec. Gtd. Global Notes, 10.50%, 01/15/11		545,000		545,000
				1,812,265
Specialty Chemicals–1.65%
Huntsman International LLC, Sr. Unsec. Gtd. Sub. Global Notes, 7.88%, 11/15/14		305,000		302,712
7.38%, 01/01/15		205,000		199,875
NewMarket Corp., Sr. Unsec. Gtd. Unsub. Global Notes, 7.13%, 12/15/16		150,000		147,188
PolyOne Corp., Sr. Unsec. Notes, 8.88%, 05/01/12		65,000		67,519
Polypore Inc., Sr. Unsec. Gtd. Sub. Global Notes, 8.75%, 05/15/12		290,000		289,275
				1,006,569
Specialty Stores–1.26%
Michaels Stores, Inc., Sr. Unsec. Gtd. Unsub. Global Notes, 10.00%, 11/01/14		340,000		355,300
Sally Holdings LLC/Sally Capital Inc., Sr. Unsec. Gtd. Global Notes, 9.25%, 11/15/14		395,000		413,269
				768,569
Steel–0.84%
Metals USA, Inc., Sr. Sec. Gtd. Global Notes, 11.13%, 12/01/15		185,000		187,775
Steel Dynamics Inc., Sr. Unsec. Gtd. Unsub. Global Notes, 7.38%, 11/01/12		185,000		191,937
Sr. Unsec. Unsub. Global Notes, 7.75%, 04/15/16		130,000		136,175
				515,887
Textiles–0.36%
Invista, Sr. Unsec. Unsub. Notes, 9.25%, 05/01/12(b)		215,000		219,300
Thrifts & Mortgage Finance–0.03%
Northern Rock Asset Management PLC (United Kingdom), Sub. Unsec. Notes, 6.59%(b)(e)(g)		120,000		16,800
Tires & Rubber–1.50%
Cooper Tire & Rubber Co., Sr. Unsec. Unsub. Notes, 8.00%, 12/15/19		245,000		238,875
7.63%, 03/15/27		370,000		321,900
Goodyear Tire & Rubber Co. (The), Sr. Unsec. Gtd. Unsub. Global Notes, 9.00%, 07/01/15		340,000		355,300
				916,075
Trading Companies & Distributors–0.97%
Ashtead Capital Inc., Sr. Sec. Gtd. Notes, 9.00%, 08/15/16(b)		150,000		151,875
H&E Equipment Services Inc., Sr. Unsec. Gtd. Global Notes, 8.38%, 07/15/16		230,000		232,875

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

AIM V.I. High Yield Fund

	Principal
	Amount		Value
Trading Companies & Distributors–(continued)
United Rentals North America, Inc., Sr. Unsec. Gtd. Global Notes, 6.50%, 02/15/12	$	185,000	$	185,462
Sr. Unsec. Gtd. Sub. Global Notes, 7.75%, 11/15/13		25,000		23,750
				593,962
Trucking–0.56%
Hertz Corp. (The), Sr. Unsec. Gtd. Global Notes, 8.88%, 01/01/14		335,000		344,213
Wireless Telecommunication Services–3.93%
Clearwire Communications LLC/Clearwire Finance Inc., Sr. Sec. Gtd. Notes, 12.00%, 12/01/15(b)		50,000		51,250
12.00%, 12/01/15(b)		135,000		138,375
Cricket Communications, Inc., Sr. Unsec. Gtd. Unsub. Global Notes, 10.00%, 07/15/15		70,000		71,313
Crown Castle International Corp., Sr. Unsec. Notes, 9.00%, 01/15/15		175,000		186,812
Digicel Group Ltd., (Bermuda) Sr. Notes, 8.25%, 09/01/17(b)		155,000		150,866
Sr. Unsec. Notes, 12.00%, 04/01/14(b)		110,000		123,887
8.88%, 01/15/15(b)		145,000		142,644
MetroPCS Wireless Inc., Sr. Unsec. Gtd. Global Notes, 9.25%, 11/01/14		95,000		96,306
9.25%, 11/01/14		100,000		101,375
SBA Telecommunications Inc., Sr. Gtd. Notes, 8.00%, 08/15/16(b)		40,000		42,000
8.25%, 08/15/19(b)		125,000		132,344
Sprint Capital Corp., Sr. Unsec. Gtd. Global Notes, 8.38%, 03/15/12		145,000		150,619
Sr. Unsec. Gtd. Unsub. Global Notes, 6.88%, 11/15/28		550,000		462,000
Sprint Nextel Corp., Sr. Unsec. Unsub. Notes, 8.38%, 08/15/17		110,000		112,475
VIP Finance Ireland Ltd. for OJSC Vimpel Communications, (Ireland) Sec. Loan Participation Notes, 8.38%, 04/30/13(b)		115,000		121,431
9.13%, 04/30/18(b)		300,000		318,248
				2,401,945
Total U.S. Dollar Denominated Bonds & Notes (Cost $53,315,316)				56,406,065
Non-U.S. Dollar Denominated Bonds & Notes–4.60%(h)
Bermuda–0.26%
Central European Media Enterprises Ltd., Sr. Notes, 11.63%, 09/15/16(b)	EUR	115,000		159,694
Croatia–0.31%
Agrokor, Sr. Unsec. Euro Medium-Term Notes, 10.00%, 12/07/16	EUR	130,000		188,760
France–0.47%
Tereos Europe, Sr. Gtd. Bonds, 6.38%, 04/15/14(b)	EUR	215,000		284,709
Germany–0.37%
Unitymedia Hessen GmbH & Co. KG, Sr. Sec. Gtd. Euro Floating Rate Notes, 3.60%, 04/15/13(b)(d)	EUR	160,000		227,910
Greece–0.27%
Yioula Glassworks S.A., Sr. Unsec. Gtd. Notes, 9.00%, 12/01/15(b)	EUR	200,000		163,202
Luxembourg–0.81%
Hellas Telecommunications, Sr. Sec. Gtd. Floating Rate Bonds, 4.24%, 10/15/12(b)(d)	EUR	300,000		356,467
Lecta S.A., Sr. Sec. Gtd. Floating Rate Notes, 3.34%, 02/15/14(b)(d)	EUR	120,000		139,151
				495,618
Netherlands–0.61%
Carlson Wagonlit B.V., Sr. Gtd. Floating Rate Notes, 6.47%, 05/01/15(b)(d)	EUR	340,000		369,924
Spain–0.23%
Campofrio Food S.A.-REGS, Sr. Euro Notes, 8.25%, 10/31/16	EUR	100,000		142,231
Trinidad–0.21%
Royal Caribbean Cruises Ltd., Sr. Unsec. Unsub. Bonds, 5.63%, 01/27/14(b)	EUR	100,000		128,486
United Kingdom–0.48%
Cable & Wireless PLC, Sr. Unsec. Unsub. Euro Bonds, 8.75%, 08/06/12	GBP	90,000		157,790
Infinis PLC, Sr. Euro Notes, 9.13%, 12/15/14	GBP	80,000		134,032
				291,822
United States–0.58%
Hertz Corp. (The), Sr. Unsec. Gtd. Global Notes, 7.88%, 01/01/14	EUR	100,000		139,580
Levi Strauss & Co., Sr. Unsec. Unsub. Global Notes, 8.63%, 04/01/13	EUR	150,000		216,887
				356,467
Total Non-U.S. Dollar Denominated Bonds & Notes (Cost $2,576,018)				2,808,823

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

AIM V.I. High Yield Fund

	Principal
	Amount		Value
Bundled Security–0.63%
Investment Banking & Brokerage–0.63%
Targeted Return Index Securities Trust Series HY 2006-1, Sec. Variable Rate Bonds, (Acquired 08/15/08; Cost $368,550) (Cost $371,469)(b)(d)	$	390,000	$	382,699
	Shares
Preferred Stocks–0.55%
Diversified Banks–0.21%
GMAC Inc.(b)		195		128,542
Packaged Foods & Meats–0.34%
Heinz (H.J.) Finance Co.–Series B, 8.00%–Pfd.(b)		2		208,000
Total Preferred Stocks (Cost $259,967)				336,542
Common Stocks & Other Equity Interests–0.18%(a)
Broadcasting–0.17%
Adelphia Communications Corp., 10.88%, 10/01/10(i)(j)		—		6,560
Adelphia Recovery Trust–Series ACC-1(i)(j)		318,570		10,194
Adelphia Recovery Trust–Series ARAHOVA(i)(j)		109,170		19,651
Sirius XM Radio Inc.–Wts., expiring 03/15/10(j)(k)		182		45
Virgin Media Inc.		4,129		69,491
				105,941
Building Products–0.01%
Nortek, Inc.(j)		215		7,525
Integrated Telecommunication Services–0.00%
XO Holdings Inc.(j)		33		19
XO Holdings Inc.–Series A–Wts., expiring 01/16/10(k)		1,533		1
XO Holdings Inc.–Series B–Wts., expiring 01/16/10(k)		1,148		12
XO Holdings Inc.–Series C–Wts., expiring 01/16/10(k)		1,148		0
				32
Total Common Stocks & Other Equity Interests (Cost $196,196)				113,498
	Principal
	Amount
Senior Secured Floating Rate Interest Loans–0.12%
Airlines–0.12%
Evergreen International Aviation, Inc., Sr. Gtd. Floating Rate First Lien Term Loan (Cost $95,862)(d)	$	95,862		76,450
TOTAL INVESTMENTS–98.38% (Cost $56,814,828)				60,124,077
OTHER ASSETS LESS LIABILITIES–1.62%				989,249
NET ASSETS–100.00%			$	61,113,326

Investment Abbreviations:

Conv.	– Convertible
Ctfs.	– Certificates
Disc.	– Discounted
EUR	– Euro
GBP	– British Pound
Gtd.	– Guaranteed
Jr.	– Junior
Pfd.	– Preferred
PIK	– Payment in Kind
REGS	– Regulation S
Sec.	– Secured
Sr.	– Senior
Sub.	– Subordinated
Unsec.	– Unsecured
Unsub.	– Unsubordinated
Wts.	– Warrants

Notes to Schedule of Investments:

(a)	Industry and/or sector classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s.
(b)	Security purchased or received in a transaction exempt from registration under the Securities Act of 1933, as amended. The security may be resold pursuant to an exemption from registration under the 1933 Act, typically to qualified institutional buyers. The aggregate value of these securities at December 31, 2009 was $16,226,280, which represented 26.55% of the Fund’s Net Assets.
(c)	Step coupon bond issued at discount. The interest rate represents the coupon rate at which the bond will accrue at a specified future date.
(d)	Interest or dividend rate is redetermined periodically. Rate shown is the rate in effect on December 31, 2009.
(e)	Defaulted security. Currently, the issuer is partially or fully in default with respect to interest payments. The aggregate value of these securities at December 31, 2009 was $1,180,393, which represented 1.93% of the Fund’s Net Assets.
(f)	Security traded on a discount basis. The interest rate shown represents the discount rate at the time of purchase by the Fund.
(g)	Perpetual bond with no specified maturity date.
(h)	Foreign denominated security. Principal amount is denominated in currency indicated.
(i)	Non-income producing security acquired as part of the Adelphia Communications bankruptcy reorganization.
(j)	Non-income producing security.
(k)	Non-income producing security acquired as part of a unit with or in exchange for other securities or acquired through a corporate action.

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

AIM V.I. High Yield Fund

Statement of Assets and Liabilities

December 31, 2009

Assets:
Investments, at value (Cost $56,814,828)	$	60,124,077
Foreign currencies, at value (Cost $133,975)		133,272
Receivables for:
Fund shares sold		117,332
Interest		1,322,667
Fund expenses absorbed		6,952
Foreign currency contracts outstanding		72,054
Investment for trustee deferred compensation and retirement plans		27,499
Total assets		61,803,853
Liabilities:
Payables for:
Investments purchased		356,473
Credit default swap agreements close-out		239
Fund shares reacquired		27,931
Amount due custodian		199,149
Accrued fees to affiliates		37,731
Accrued other operating expenses		35,926
Trustee deferred compensation and retirement plans		33,078
Total liabilities		690,527
Net assets applicable to shares outstanding	$	61,113,326
Net assets consist of:
Shares of beneficial interest	$	68,385,569
Undistributed net investment income		5,286,704
Undistributed net realized gain (loss)		(15,938,672	)
Unrealized appreciation		3,379,725
	$	61,113,326
Net Assets:
Series I	$	60,649,161
Series II	$	464,165
Shares outstanding, $0.001 par value per share, unlimited number of shares authorized:
Series I		11,616,750
Series II		88,958
Series I:
Net asset value per share	$	5.22
Series II:
Net asset value per share	$	5.22

Statement of Operations

For the year ended December 31, 2009

Investment income:
Interest	$	5,629,443
Dividends		51,873
Dividends from affiliated money market funds (includes securities lending income of $58,333)		73,888
Total investment income		5,755,204
Expenses:
Advisory fees		320,199
Administrative services fees		173,563
Custodian fees		17,541
Distribution fees — Series II		1,085
Transfer agent fees		13,482
Trustees’ and officers’ fees and benefits		21,386
Professional services fees		48,819
Other		27,695
Total expenses		623,770
Less: Fees waived		(139,029	)
Net expenses		484,741
Net investment income		5,270,463
Realized and unrealized gain (loss) from:
Net realized gain (loss) from:
Investment securities		46,857
Foreign currencies		37,263
Foreign currency contracts		(96,404	)
Swap agreements		(4,540	)
		(16,824	)
Change in net unrealized appreciation (depreciation) of:
Investment securities		17,009,735
Foreign currencies		(1,578	)
Foreign currency contracts		72,054
Swap agreements		12
		17,080,223
Net realized and unrealized gain		17,063,399
Net increase in net assets resulting from operations	$	22,333,862

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

AIM V.I. High Yield Fund

Statement of Changes in Net Assets

For the years ended December 31, 2009 and 2008

	2009			2008
Operations:
Net investment income	$	5,270,463		$	4,361,948
Net realized gain (loss)		(16,824	)		(5,201,273	)
Change in net unrealized appreciation (depreciation)		17,080,223			(11,459,373	)
Net increase (decrease) in net assets resulting from operations		22,333,862			(12,298,698	)
Distributions to shareholders from net investment income:
Series I		(4,425,953	)		(4,318,865	)
Series II		(35,151	)		(48,535	)
Total distributions from net investment income		(4,461,104	)		(4,367,400	)
Share transactions-net:
Series I		3,004,710			5,152,523
Series II		(55,854	)		(85,487	)
Net increase in net assets resulting from share transactions		2,948,856			5,067,036
Net increase (decrease) in net assets		20,821,614			(11,599,062	)
Net assets:
Beginning of year		40,291,712			51,890,774
End of year (includes undistributed net investment income of $5,286,704 and $4,413,973, respectively)	$	61,113,326		$	40,291,712

Notes to Financial Statements

December 31, 2009

NOTE 1—Significant Accounting Policies

AIM V.I. High Yield Fund (the “Fund”) is a series portfolio of AIM Variable Insurance Funds (the “Trust”). The Trust is a Delaware statutory trust registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end series management investment company consisting of twenty-one separate portfolios, (each constituting a “Fund”). The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Matters affecting each Fund or class will be voted on exclusively by the shareholders of such Fund or class. Current Securities and Exchange Commission (“SEC”) guidance, however, requires participating insurance companies offering separate accounts to vote shares proportionally in accordance with the instructions of the contract owners whose investments are funded by shares of each Fund or class.

  The Fund’s investment objective is a high level of current income.

  The Fund currently offers two classes of shares, Series I and Series II, both of which are offered to insurance company separate accounts funding variable annuity contracts and variable life insurance policies (“variable products”).

  The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements.

A.	Security Valuations — Securities, including restricted securities, are valued according to the following policy.
	Debt obligations (including convertible bonds) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution-size trading in similar groups of securities, developments related to specific securities, dividend rate, yield, quality, type of issue, coupon rate, maturity, individual trading characteristics and other market data. Short-term obligations, including commercial paper, having 60 days or less to maturity are recorded at amortized cost which approximates value. Debt securities are subject to interest rate and credit risks. In addition, all debt securities involve some risk of default with respect to interest and/or principal payments.
	Senior secured floating rate loans and senior secured floating rate debt securities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may reflect appropriate factors such as ratings, tranche type, industry, company performance, spread, individual trading characteristics, institution-size trading in similar groups of securities and other market data.
	A security listed or traded on an exchange (except convertible bonds) is valued at its last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales or official closing price on a particular day, the security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based on prices furnished by independent pricing services or market makers. When such securities are valued by an independent pricing service they may be considered fair valued. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean

AIM V.I. High Yield Fund

	between the last bid and ask prices from the exchange on which they are principally traded. Options not listed on an exchange are valued by an independent source at the mean between the last bid and ask prices. For purposes of determining net asset value per share, futures and option contracts generally are valued 15 minutes after the close of the customary trading session of the New York Stock Exchange (“NYSE”).
	Investments in open-end and closed-end registered investment companies that do not trade on an exchange are valued at the end of day net asset value per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded.
	Foreign securities (including foreign exchange contracts) are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the NYSE. If market quotations are available and reliable for foreign exchange traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that are significant and make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economical upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
	Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities and Corporate Loans. The mean between the last bid and asked prices may be used to value debt obligations other than Corporate Loans.
	Securities for which market quotations are not readily available or are unreliable are valued at fair value as determined in good faith by or under the supervision of the Trust’s officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a security’s fair value.
	Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
B.	Securities Transactions and Investment Income — Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income is recorded on the accrual basis from settlement date. Dividend income is recorded on the ex-dividend date. Bond premiums and discounts are amortized and/or accreted for financial reporting purposes.
	The Fund may periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain/loss for investments no longer held and as unrealized gain/loss for investments still held.
	Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the realized and unrealized net gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the Fund’s net asset value and, accordingly, they reduce the Fund’s total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in the Statement of Operations and Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the adviser.
	The Fund allocates income and realized and unrealized capital gains and losses to a class based on the relative net assets of each class.
C.	Country Determination — For the purposes of making investment selection decisions and presentation in the Schedule of Investments, the investment adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuer’s securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted.
D.	Distributions — Distributions from income and net realized capital gain, if any, are generally paid to separate accounts of participating insurance companies annually and recorded on ex-dividend date.
E.	Federal Income Taxes — The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code necessary to qualify as a regulated investment company and to distribute substantially all of the Fund’s taxable earnings to shareholders. As such, the Fund will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements.
	The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.
F.	Expenses — Fees provided for under the Rule 12b-1 plan of a particular class of the Fund and which are directly attributable to that class are charged to the operations of such class. All other expenses are allocated among the classes based on relative net assets.

AIM V.I. High Yield Fund

G.	Accounting Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print, which is generally 45 days from the period-end date.
H.	Indemnifications — Under the Trust’s organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Fund’s servicing agreements, that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote.
I.	Lower-Rated Securities — The Fund normally invests at least 80% of its net assets in lower-quality debt securities, i.e., “junk bonds”. Investments in lower-rated securities or unrated securities of comparable quality tend to be more sensitive to economic conditions than higher rated securities. Junk bonds involve a greater risk of default by the issuer because such securities are generally unsecured and are often subordinated to other creditors’ claims.
J.	Securities Lending — The Fund may lend portfolio securities having a market value up to one-third of the Fund’s total assets. Such loans are secured by collateral equal to no less than the market value of the loaned securities determined daily by the securities lending provider. Such collateral will be cash or debt securities issued or guaranteed by the U.S. Government or any of its sponsored agencies. Cash collateral received in connection with these loans is invested in short-term money market instruments or affiliated money market funds and is shown as such on the Schedule of Investments. It is the Fund’s policy to obtain additional collateral from or return excess collateral to the borrower by the end of the next business day, following the valuation date of the securities loaned. Therefore, the value of the collateral held may be temporarily less than the value of the securities on loan. Lending securities entails a risk of loss to the Fund if and to the extent that the market value of the securities loaned were to increase and the borrower did not increase the collateral accordingly, and the borrower fails to return the securities. Upon the failure of the borrower to return the securities, collateral may be liquidated and the securities may be purchased on the open market to replace the loaned securities. The Fund could experience delays and costs in gaining access to the collateral. The Fund bears the risk of any deficiency in the amount of the collateral available for return to the borrower due to any loss on the collateral invested. Dividends received on cash collateral investments for securities lending transactions, which are net of compensation to counterparties, is included in Dividends from affiliates on the Statement of Operations. The aggregate value of securities out on loan is shown as a footnote on the Statement of Assets and Liabilities, if any.
K.	Foreign Currency Translations — Foreign currency is valued at the close of the NYSE based on quotations posted by banks and major currency dealers. Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at date of valuation. Purchases and sales of portfolio securities (net of foreign taxes withheld on disposition) and income items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. The Fund does not separately account for the portion of the results of operations resulting from changes in foreign exchange rates on investments and the fluctuations arising from changes in market prices of securities held. The combined results of changes in foreign exchange rates and the fluctuation of market prices on investments (net of estimated foreign tax withholding) are included with the net realized and unrealized gain or loss from investments in the Statement of Operations. Reported net realized foreign currency gains or losses arise from (i) sales of foreign currencies, (ii) currency gains or losses realized between the trade and settlement dates on securities transactions, and (iii) the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign currency gains and losses arise from changes in the fair values of assets and liabilities, other than investments in securities at fiscal period end, resulting from changes in exchange rates.
	The Fund may invest in foreign securities which may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable.
L.	Foreign Currency Contracts — The Fund may enter into foreign currency contracts to manage or minimize currency or exchange rate risk. The Fund may also enter into foreign currency contracts for the purchase or sale of a security denominated in a foreign currency in order to “lock in” the U.S. dollar price of that security. A foreign currency contract is an obligation to purchase or sell a specific currency for an agreed-upon price at a future date. The use of foreign currency contracts does not eliminate fluctuations in the price of the underlying securities the Fund owns or intends to acquire but establishes a rate of exchange in advance. Fluctuations in the value of these contracts are measured by the difference in the contract date and reporting date exchange rates and are recorded as unrealized appreciation (depreciation) until the contracts are closed. When the contracts are closed, realized gains (losses) are recorded. Realized and unrealized gains (losses) on the contracts are included in the Statement of Operations. The primary risks associated with foreign currency contracts include failure of the counterparty to meet the terms of the contract and the value of the foreign currency changing unfavorably. These risks may be in excess of the amounts reflected in the Statement of Assets and Liabilities.
M.	Swap Agreements — The Fund may enter into various swap transactions, including interest rate, total return, index, currency exchange rate and credit default swap contracts (“CDS”) for investment purposes or to manage interest rate, currency or credit risk.
	Interest rate, total return, index, and currency exchange rate swap agreements are two-party contracts entered into primarily to exchange the returns (or differentials in rates of returns) earned or realized on particular predetermined investments or instruments. The gross returns to be exchanged or “swapped” between the parties are calculated with respect to a notional amount, i.e., the return on or increase in value of a particular dollar amount invested at a particular interest rate or return of an underlying asset, in a particular foreign currency, or in a “basket” of securities representing a particular index.
	A CDS is an agreement between two parties (“Counterparties”) to exchange the credit risk of an issuer. A buyer of a CDS is said to buy protection by paying a fixed payment over the life of the agreement and in some situations an upfront payment to the seller of the CDS. If a defined credit event occurs (such as payment default or bankruptcy), the Fund as a protection buyer would cease paying its fixed payment, the Fund would deliver eligible bonds

AIM V.I. High Yield Fund

	issued by the reference entity to the seller, and the seller would pay the full notional value, or the “par value”, of the referenced obligation to the Fund. A seller of a CDS is said to sell protection and thus would receive a fixed payment over the life of the agreement and an upfront payment, if applicable. If a credit event occurs, the Fund as a protection seller would cease to receive the fixed payment stream, the Fund would pay the buyer “par value” or the full notional value of the referenced obligation, and the Fund would receive the eligible bonds issued by the reference entity. In turn, these bonds may be sold in order to realize a recovery value. Alternatively, the seller of the CDS and its counterparty may agree to net the notional amount and the market value of the bonds and make a cash payment equal to the difference to the buyer of protection. If no credit event occurs, the Fund receives the fixed payment over the life of the agreement. As the seller, the Fund would effectively add leverage to its portfolio because, in addition to its total net assets, the Fund would be subject to investment exposure on the notional amount of the CDS. In connection with these agreements, cash and securities may be identified as collateral in accordance with the terms of the respective swap agreements to provide assets of value and recourse in the event of default under the swap agreement or bankruptcy/insolvency of a party to the swap agreement.
	Implied credit spreads represent the current level at which protection could be bought or sold given the terms of the existing CDS contract and serve as an indicator of the current status of the payment/performance risk of the CDS. An implied spread that has widened or increased since entry into the initial contract may indicate a deteriorating credit profile and increased risk of default for the reference entity. A declining or narrowing spread may indicate an improving credit profile or decreased risk of default for the reference entity. Alternatively, credit spreads may increase or decrease reflecting the general tolerance for risk in the credit markets.
	Changes in the value of swap agreements are recognized as unrealized gains (losses) in the Statement of Operations by “marking to market” on a daily basis to reflect the value of the swap agreement at the end of each trading day. Payments received or paid at the beginning of the agreement are reflected as such on the Statement of Assets and Liabilities and may be referred to as upfront payments. The Fund accrues for the fixed payment stream and amortizes upfront payments, if any, on swap agreements on a daily basis with the net amount, recorded as a component of realized gain (loss) on the Statement of Operations. A liquidation payment received or made at the termination of a swap agreement is recorded as realized gain (loss) on the Statement of Operations. The Fund segregates liquid securities having a value at least equal to the amount of the potential obligation of a Fund under any swap transaction. The Fund’s maximum risk of loss from counterparty risk, either as the protection seller or as the protection buyer, is the value of the contract. The risk may be mitigated by having a master netting arrangement between the Fund and the counterparty and by the posting of collateral by the counterparty to cover the Fund’s exposure to the counterparty. Entering into these agreements involves, to varying degrees, lack of liquidity and elements of credit, market, and counterparty risk in excess of amounts recognized on the Statement of Assets and Liabilities. Such risks involve the possibility that a swap is difficult to sell or liquidate; the counterparty does not honor its obligations under the agreement and unfavorable interest rates and market fluctuations.
N.	Collateral — To the extent the Fund has pledged or segregated a security as collateral and that security is subsequently sold, it is the Fund’s practice to replace such collateral no later than the next business day. This practice does not apply to securities pledged as collateral for securities lending transactions.

NOTE 2—Advisory Fees and Other Fees Paid to Affiliates

The Trust has entered into a master investment advisory agreement with Invesco Advisers, Inc. (the “Adviser” or “Invesco”). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Adviser based on the annual rate of the Fund’s average daily net assets as follows:

Average Net Assets	Rate
First $200 million		0	.625%
Next $300 million		0	.55%
Next $500 million		0	.50%
Over $1 billion		0	.45%

  Under the terms of a master sub-advisory agreement approved by shareholders of the Funds between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Trimark Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Funds, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide discretionary investment management services to each Fund based on the percentage of assets allocated to such Sub-Adviser(s).

  On December 31, 2009, Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc., Invesco Private Asset Management, Inc. and Invesco Global Asset Management (N.A.), Inc. merged into Invesco Institutional (N.A.), Inc. and the consolidated adviser firm was renamed Invesco Advisers, Inc.

  The Adviser has contractually agreed to waive advisory fees and/or reimburse expenses of all shares to the extent necessary to limit total annual fund operating expenses after fee waiver (excluding certain items discussed below) of Series I shares to 0.95% and Series II shares to 1.20% of average daily net assets, through at least April 30, 2011. In determining the Adviser’s obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the total annual fund operating expenses after fee waiver to exceed the numbers reflected above: (1) interest; (2) taxes; (3) dividend expense on short sales; (4) extraordinary items or non-routine items; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. The Board of Trustees or Invesco may terminate the fee waiver arrangement at any time.

  Further, the Adviser has contractually agreed, through at least June 30, 2010, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash (excluding investments of cash collateral from securities lending) in such affiliated money market funds.

  For the year ended December 31, 2009, the Adviser waived advisory fees of $139,029.

AIM V.I. High Yield Fund

  At the request of the Trustees of the Trust, Invesco Ltd. agreed to reimburse expenses incurred by the Fund in connection with market timing matters in the AIM Funds, which may include legal, audit, shareholder reporting, communications and trustee expenses. For the year ended December 31, 2009, Invesco Ltd. did not reimburse any expenses.

  The Trust has entered into a master administrative services agreement with Invesco pursuant to which the Fund has agreed to pay Invesco a fee for costs incurred in providing accounting services and fund administrative services to the Fund and to reimburse Invesco for administrative services fees paid to insurance companies that have agreed to provide services to the participants of separate accounts. These administrative services provided by the insurance companies may include, among other things: the printing of prospectuses, financial reports and proxy statements and the delivery of the same to existing participants; the maintenance of master accounts; the facilitation of purchases and redemptions requested by the participants; and the servicing of participants’ accounts. Pursuant to such agreement, for the year ended December 31, 2009, Invesco was paid $50,000 for accounting and fund administrative services and reimbursed $123,563 for services provided by insurance companies.

  The Trust has entered into a transfer agency and service agreement with Invesco Aim Investment Services, Inc. (“IAIS”) pursuant to which the Fund has agreed to pay IAIS a fee for providing transfer agency and shareholder services to the Fund and reimburse IAIS for certain expenses incurred by IAIS in the course of providing such services. For the year ended December 31, 2009, expenses incurred under the agreement are shown in the Statement of Operations as transfer agent fees.

  The Trust has entered into a master distribution agreement with Invesco Aim Distributors, Inc. (“IADI”) to serve as the distributor for the Fund. The Trust has adopted a plan pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund’s Series II shares (the “Plan”). The Fund, pursuant to the Plan, pays IADI compensation at the annual rate of 0.25% of the Fund’s average daily net assets of Series II shares. Of the Plan payments, up to 0.25% of the average daily net assets of the Series II shares may be paid to insurance companies who furnish continuing personal shareholder services to customers who purchase and own Series II shares of the Fund. For the year ended December 31, 2009, expenses incurred under the Plan are detailed in the Statement of Operations as distribution fees.

  Certain officers and trustees of the Trust are officers and directors of Invesco, IAIS and/or IADI.

NOTE 3—Additional Valuation Information

Generally Accepted Accounting Principles (“GAAP”) defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3) generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment’s assigned level:

Level 1 —	Prices are determined using quoted prices in an active market for identical assets.
Level 2 —	Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk and others.
Level 3 —	Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information.

  The following is a summary of the tiered valuation input levels, as of December 31, 2009. The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.

	Level 1		Level 2		Level 3		Total
Equity Securities	$	107,067	$	336,541	$	6,560	$	450,168
Corporate Debt Securities		—		59,673,909		—		59,673,909
								60,124,077
Other Investments*		—		72,054		—		72,054
Total Investments	$	107,067	$	60,082,504	$	6,560	$	60,196,131

*  Other Investments include foreign currency contracts, which are included at unrealized appreciation.

NOTE 4—Derivative Investments

Effective with the beginning of the Fund’s fiscal year, the Fund has implemented new required disclosures about derivative instruments and hedging activities in accordance with GAAP. GAAP has intended to improve financial reporting about derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity’s financial position and financial performance. The enhanced disclosure has no impact on the results of operations reported in the financial statements.

AIM V.I. High Yield Fund

Value of Derivative Instruments at Period-End

The table below summarizes the value of the Fund’s derivative instruments, detailed by primary risk exposure, held as of December 31, 2009:

	Value
Risk Exposure/ Derivative Type	Assets		Liabilities
Credit risk
Credit Default Swaps(a)	$	—	$	(239	)
Currency risk
Foreign Currency Contracts(b)		72,884		(830	)
	$	72,884	$	(1,069	)

(a)	Value is disclosed on the Statement of Assets and Liabilities under Credit default swap agreements close-out. Contracts were closed upon the declaration of bankruptcy by Lehman Brothers Holdings, Inc. on September 15, 2008.
(b)	Values are disclosed on the Statement of Assets and Liabilities under the Foreign currency contracts outstanding.

Effect of Derivative Instruments for the year ended December 31, 2009

The table below summarizes the gains (losses) on derivative instruments, detailed by primary risk exposure, recognized in earnings during the period:

	Location of Gain (Loss) on
	Statement of Operations
	Swap			Foreign Currency
	Agreements*			Contracts*
Realized Gain (Loss)
Credit risk	$	(4,540	)	$	—
Currency risk		—			(96,404	)
Change in Unrealized Appreciation (Depreciation)
Credit risk		12			—
Currency risk		—			72,504
Total	$	(4,528	)	$	(23,900	)

*  The average value of swap agreements and foreign currency contracts outstanding during the period were $167,917 and $756,312, respectively.

Open Foreign Currency Contracts
							Unrealized
Settlement	Contract to						Appreciation
Date	Deliver		Receive		Value		(Depreciation)
2/12/10	EUR	645,000	USD	963,478	$	923,321	$	40,157
2/12/10	EUR	364,000	USD	545,334		521,068		24,266
2/12/10	EUR	198,000	USD	291,899		283,438		8,461
2/12/10	EUR	192,800	USD	275,164		275,994		(830	)
Total open foreign currency contracts							$	72,054

Currency Abbreviations:

EUR — Euro

USD — U.S. Dollar

NOTE 5—Trustees’ and Officers’ Fees and Benefits

“Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and “Trustees’ and Officers’ Fees and Benefits” also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various AIM Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees are eligible to participate in a retirement plan that provides for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former Trustees who also participate in a retirement plan and receive benefits under such plan. “Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund.

  During the year ended December 31, 2009, the Fund paid legal fees of $2,871 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A member of that firm is a Trustee of the Trust.

NOTE 6—Cash Balances

The Fund may borrow for leveraging in an amount up to 5% of the Fund’s total assets (excluding the amount borrowed) at the time the borrowing is made. In doing so, the Fund is permitted to temporarily carry a negative or overdrawn balance in its account with The State Street Bank and Trust Company, the custodian bank. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (i) leave funds as a compensating balance in the

AIM V.I. High Yield Fund

account so the custodian bank can be compensated by earning the additional interest; or (ii) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate. A Fund may not purchase additional securities when any borrowings from banks exceeds 5% of the Fund’s total assets.

NOTE 7—Distributions to Shareholders and Tax Components of Net Assets

Tax Character of Distributions to Shareholders Paid During the Years Ended December 31, 2009 and 2008:

	2009		2008
Ordinary income	$	4,461,104	$	4,367,400

Tax Components of Net Assets at Period-End:

	2009
Undistributed ordinary income	$	5,320,999
Net unrealized appreciation — investments		2,711,475
Net unrealized appreciation (depreciation) — other investments		(1,577	)
Temporary book/tax differences		(34,295	)
Capital loss carryforward		(15,268,845	)
Shares of beneficial interest		68,385,569
Total net assets	$	61,113,326

  The difference between book-basis and tax-basis unrealized appreciation (depreciation) is due to differences in the timing of recognition of gains and losses on investments for tax and book purposes. The Fund’s net unrealized appreciation difference is attributable primarily to wash sales and the realization for tax purposes of unrealized gains on certain foreign currency contracts.

  The temporary book/tax differences are a result of timing differences between book and tax recognition of income and/or expenses. The Fund’s temporary book/tax differences are the result of the trustee deferral of compensation and retirement plan benefits.

  Capital loss carryforward is calculated and reported as of a specific date. Results of transactions and other activity after that date may affect the amount of capital loss carryforward actually available for the Fund to utilize. The ability to utilize capital loss carryforward in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.

  The Fund has a capital loss carryforward as of December 31, 2009 which expires as follows:

	Capital Loss
Expiration	Carryforward*
December 31, 2010	$	10,225,025
December 31, 2016		3,209,402
December 31, 2017		1,834,418
Total capital loss carryforward	$	15,268,845

*  Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code.

NOTE 8—Investment Securities

The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the year ended December 31, 2009 was $71,422,065 and $60,583,182, respectively. Cost of investments on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed Federal income tax reporting period-end.

Unrealized Appreciation (Depreciation) of Investment Securities on a Tax Basis
Aggregate unrealized appreciation of investment securities	$	5,530,655
Aggregate unrealized (depreciation) of investment securities		(2,819,180	)
Net unrealized appreciation of investment securities	$	2,711,475
Cost of investments for tax purposes is $57,412,602.

NOTE 9—Reclassification of Permanent Differences

Primarily as a result of differing book/tax treatment of foreign currency transactions, defaulted bonds and swap agreements, on December 31, 2009, undistributed net investment income was increased by $63,372 and undistributed net realized gain (loss) was decreased by $63,372. This reclassification had no effect on the net assets of the Fund.

AIM V.I. High Yield Fund

NOTE 10—Share Information

	Summary of Share Activity
	Year ended December 31,
	2009(a)						2008
	Shares			Amount			Shares			Amount
Sold:
Series I		9,049,093		$	37,158,640			6,943,158		$	35,095,084
Series II		49			222			20,816			115,600
Issued as reinvestment of dividends:
Series I		862,759			4,425,953			1,251,845			4,318,865
Series II		6,852			35,151			14,068			48,535
Reacquired:
Series I		(9,123,929	)		(38,579,883	)		(6,290,819	)		(34,261,426	)
Series II		(19,361	)		(91,227	)		(49,870	)		(249,622	)
Net increase (decrease) in share activity		775,463		$	2,948,856			1,889,198		$	5,067,036

^(a) There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 74% of the outstanding shares of the Fund. The Fund and the Fund’s principal underwriter or adviser, are parties to participation agreements with these entities whereby these entities sell units of interest in separate accounts funding variable products that are invested in the Fund. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and or Invesco affiliates including but not limited to services such as, securities brokerage, third party record keeping and account servicing and administrative services. The Trust has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially.

NOTE 11—Financial Highlights

The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.

																					Ratio of			Ratio of
																					expenses			expenses
					Net gains																to average			to average net			Ratio of net
	Net asset				(losses) on						Dividends										net assets			assets without			investment
	value,		Net		securities (both			Total from			from net			Net asset					Net assets,		with fee waivers			fee waivers			income
	beginning		investment		realized and			investment			investment			value, end		Total			end of period		and/or expenses			and/or expenses			to average			Portfolio
	of period		income(a)		unrealized)			operations			income			of period		Return(b)			(000s omitted)		absorbed			absorbed			net assets			turnover(c)
Series I
Year ended 12/31/09	$	3.69	$	0.47	$	1.47		$	1.94		$	(0.41	)	$	5.22		52.79	%	$	60,649		0.95	%(d)		1.22	%(d)		10.29	%(d)		125	%
Year ended 12/31/08		5.74		0.49		(2.00	)		(1.51	)		(0.54	)		3.69		(25.69	)		39,918		0.95			1.22			9.19			85
Year ended 12/31/07		6.12		0.46		(0.38	)		0.08			(0.46	)		5.74		1.24			51,225		0.96			1.15			7.42			113
Year ended 12/31/06		6.03		0.45		0.19			0.64			(0.55	)		6.12		10.74			58,336		0.96			1.18			7.22			135
Year ended 12/31/05		6.45		0.43		(0.26	)		0.17			(0.59	)		6.03		2.72			54,731		1.01			1.16			6.58			69
Series II
Year ended 12/31/09		3.68		0.46		1.48			1.94			(0.40	)		5.22		52.77			464		1.20	(d)		1.47	(d)		10.04	(d)		125
Year ended 12/31/08		5.72		0.47		(1.99	)		(1.52	)		(0.52	)		3.68		(26.00	)		374		1.20			1.47			8.94			85
Year ended 12/31/07		6.09		0.44		(0.38	)		0.06			(0.43	)		5.72		1.01			666		1.21			1.40			7.17			113
Year ended 12/31/06		6.00		0.43		0.19			0.62			(0.53	)		6.09		10.41			919		1.21			1.43			6.97			135
Year ended 12/31/05		6.43		0.41		(0.26	)		0.15			(0.58	)		6.00		2.43			1,556		1.22			1.41			6.37			69

(a)	Calculated using average shares outstanding.
(b)	Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Total returns do not reflect charges assessed in connection with a variable product, which if included would reduce total returns.
(c)	Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable.
(d)	Ratios are based on average daily net assets (000’s omitted) of $50,798 and $434 for Series I and Series II, respectively.

AIM V.I. High Yield Fund

Report of Independent Registered Public Accounting Firm

To the Board of Trustees of AIM Variable Insurance Funds

and Shareholders of AIM V.I. High Yield Fund:

In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of AIM V.I. High Yield Fund, (one of the funds constituting AIM Variable Insurance Funds, hereafter referred to as the “Fund”) at December 31, 2009, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at December 31, 2009 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.

PRICEWATERHOUSECOOPERS LLP

February 10, 2010

Houston, Texas

AIM V.I. High Yield Fund

Calculating your ongoing Fund expenses

Example

As a shareholder of the Fund, you incur ongoing costs, including management fees; distribution and/or service fees (12b-1); and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period July 1, 2009, through December 31, 2009.

  The actual and hypothetical expenses in the examples below do not represent the effect of any fees or other expenses assessed in connection with a variable product; if they did, the expenses shown would be higher while the ending account values shown would be lower.

Actual expenses

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

Hypothetical example for comparison purposes

The table below also provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return.

  The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

  Please note that the expenses shown in the table are meant to highlight your ongoing costs. Therefore, the hypothetical information is useful in comparing ongoing costs, and will not help you determine the relative total costs of owning different funds.

							HYPOTHETICAL
							(5% annual return before
			ACTUAL				expenses)
	Beginning		Ending		Expenses		Ending		Expenses		Annualized
	Account Value		Account Value		Paid During		Account Value		Paid During		Expense
Class	(07/01/09)		(12/31/09)1		Period2		(12/31/09)		Period2		Ratio
Series I	$	1,000.00	$	1,215.00	$	5.30	$	1,020.42	$	4.83		0.95	%
Series II		1,000.00		1,211.90		6.69		1,019.16		6.10		1.20

1	The actual ending account value is based on the actual total return of the Fund for the period July 1, 2009 through December 31, 2009, after actual expenses and will differ from the hypothetical ending account value which is based on the Fund’s expense ratio and a hypothetical annual return of 5% before expenses.
2	Expenses are equal to the Fund’s annualized expense ratio as indicated above multiplied by the average account value over the period, multiplied by 184/365 to reflect the most recent fiscal half year.

AIM V.I. High Yield Fund

Tax Information

Form 1099-DIV, Form 1042-S and other year-end tax information provide shareholders with actual calendar year amounts that should be included in their tax returns. Shareholders should consult their tax advisers.

  The following distribution information is being provided as required by the Internal Revenue Code or to meet a specific state’s requirement.

  The Fund designates the following amounts or, if subsequently determined to be different, the maximum amount allowable for its fiscal year ended December 31, 2009:

Federal and State Income Tax
Corporate Dividends Received Deduction*	0%

*  The above percentage is based on ordinary income dividends paid to shareholders during the Fund’s fiscal year.

AIM V.I. High Yield Fund

Trustees and Officers

The address of each trustee and officer of AIM Variable Insurance Funds (the “Trust”), is 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173. Each trustee oversees 105 portfolios in the AIM Funds complex. The trustees serve for the life of the Trust, subject to their earlier death, incapacitation, resignation, retirement or removal as more specifically provided in the Trust’s organizational documents. Each officer serves for a one year term or until their successors are elected and qualified. Column two below includes length of time served with predecessor entities, if any.

	Trustee and/
Name, Year of Birth and	or Officer	Principal Occupation(s)	Other Directorship(s)
Position(s) Held with the Trust	Since	During Past 5 Years	Held by Trustee
Interested Persons
Martin L. Flanagan1 — 1960 Trustee	2007	Executive Director, Chief Executive Officer and President, Invesco Ltd. (ultimate parent of Invesco Aim and a global investment management firm); Adviser to the Board, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Trustee, The AIM Family of Funds®; Board of Governors, Investment Company Institute; and Member of Executive Board, SMU Cox School of Business	None
		Formerly: Chairman, Invesco Aim Advisors, Inc. (registered investment adviser); Director, Chairman, Chief Executive Officer and President, IVZ Inc. (holding company), INVESCO Group Services, Inc. (service provider) and Invesco North American Holdings, Inc. (holding company); Director, Chief Executive Officer and President, Invesco Holding Company Limited (parent of Invesco Aim and a global investment management firm); Director, Invesco Ltd.; Chairman and Vice Chairman, Investment Company Institute
Philip A. Taylor2 — 1954 Trustee, President and Principal Executive Officer	2006	Head of North American Retail and Senior Managing Director, Invesco Ltd.; Director, Co-Chairman, Co-President and Co- Chief Executive Officer, Invesco Advisers, inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Director, Chief Executive Officer and President, Invesco Aim Advisors, Inc. and 1371 Preferred Inc. (holding company); Director, Chairman, Chief Executive Officer and President, Invesco Aim Management Group, Inc. (financial services holding company); Director, Co-Chairman, Co-President and Co-Chief Executive Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Director and President, INVESCO Funds Group, Inc. (registered investment adviser and registered transfer agent) and AIM GP Canada Inc. (general partner for limited partnerships); Director, Invesco Aim Distributors, Inc. (registered broker dealer); Director and Chairman, Invesco Aim Investment Services, Inc. (registered transfer agent) and INVESCO Distributors, Inc. (registered broker dealer); Director, President and Chairman, INVESCO Inc. (holding company) and Invesco Canada Holdings Inc. (holding company); Chief Executive Officer, AIM Trimark Corporate Class Inc. (corporate mutual fund company) and AIM Trimark Canada Fund Inc. (corporate mutual fund company); Director and Chief Executive Officer, Invesco Trimark Ltd./Invesco Trimark Ltèe (registered investment adviser and registered transfer agent) and Invesco Trimark Dealer Inc. (registered broker dealer); Trustee, President and Principal Executive Officer, The AIM Family of Funds® (other than AIM Treasurer’s Series Trust and Short-Term Investments Trust); Trustee and Executive Vice President, The AIM Family of Funds® (AIM Treasurer’s Series Trust and Short-Term Investments Trust only); and Manager, Invesco PowerShares Capital Management LLC	None
		Formerly: Manager, Invesco PowerShares Capital Management LLC; Director, Chief Executive Officer and President, Invesco Aim Advisors, Inc.; Director, Chairman, Chief Executive Officer and President, Invesco Aim Capital Management, Inc.; President, Invesco Trimark Dealer Inc. and Invesco Trimark Ltd./Invesco Trimark Ltèe; Director and President, AIM Trimark Corporate Class Inc. and AIM Trimark Canada Fund Inc.; Senior Managing Director, Invesco Holding Company Limited; Trustee and Executive Vice President, Tax-Free Investments Trust; Director and Chairman, Fund Management Company (former registered broker dealer); President and Principal Executive Officer, The AIM Family of Funds® (AIM Treasurer’s Series Trust, Short-Term Investments Trust and Tax-Free Investments Trust only); President, AIM Trimark Global Fund Inc. and AIM Trimark Canada Fund Inc.
Independent Trustees
Bruce L. Crockett — 1944 Trustee and Chair	1993	Chairman, Crockett Technology Associates (technology consulting company)	ACE Limited (insurance company); Captaris, Inc. (unified messaging provider); and Investment Company Institute
Bob R. Baker — 1936 Trustee	2004	Retired	None
Frank S. Bayley — 1939 Trustee	2001	Retired Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios)	None
James T. Bunch — 1942 Trustee	2004	Founder, Green, Manning & Bunch Ltd., (investment banking firm)	Board of Governors, Western Golf Association/Evans Scholars Foundation and Executive Committee, United States Golf Association
Albert R. Dowden — 1941 Trustee	2000	Director of a number of public and private business corporations, including the Boss Group, Ltd. (private investment and management); Reich & Tang Funds (registered investment company); and Homeowners of America Holding Corporation/Homeowners of America Insurance Company (property casualty company)	Board of Nature’s Sunshine Products, Inc.
		Formerly: Director, Continental Energy Services, LLC (oil and gas pipeline service); Director, CompuDyne Corporation (provider of product and services to the public security market) and Director, Annuity and Life Re (Holdings), Ltd. (reinsurance company); Director, President and Chief Executive Officer, Volvo Group North America, Inc.; Senior Vice President, AB Volvo; Director of various public and private corporations
Jack M. Fields — 1952 Trustee	1997	Chief Executive Officer, Twenty First Century Group, Inc. (government affairs company); and Owner and Chief Executive Officer, Dos Angelos Ranch, L.P. (cattle, hunting, corporate entertainment), Discovery Global Education Fund (non-profit) and Cross Timbers Quail Research Ranch (non-profit)	Administaff
		Formerly: Chief Executive Officer, Texana Timber LP (sustainable forestry company)
Carl Frischling — 1937 Trustee	1993	Partner, law firm of Kramer Levin Naftalis and Frankel LLP	Director, Reich & Tang Funds (16 portfolios)
Prema Mathai-Davis — 1950 Trustee	1998	Retired	None
Lewis F. Pennock — 1942 Trustee	1993	Partner, law firm of Pennock & Cooper	None
Larry Soll — 1942 Trustee	2004	Retired	None
Raymond Stickel, Jr. — 1944 Trustee	2005	Retired Formerly: Director, Mainstay VP Series Funds, Inc. (25 portfolios)	None

1	Mr. Flanagan is considered an interested person of the Trust because he is an officer of the adviser to the Trust, and an officer and a director of Invesco Ltd., ultimate parent of the adviser to the Trust.
2	Mr. Taylor is considered an interested person of the Trust because he is an officer and a director of the adviser to, and a director of the principal underwriter of, the Trust.

T-1

Trustees and Officers — (continued)

	Trustee and/
Name, Year of Birth and	or Officer	Principal Occupation(s)	Other Directorship(s)
Position(s) Held with the Trust	Since	During Past 5 Years	Held by Trustee
Other Officers
Russell C. Burk — 1958 Senior Vice President and Senior Officer	2005	Senior Vice President and Senior Officer of The AIM Family of Funds®	N/A
John M. Zerr — 1962 Senior Vice President, Chief Legal Officer and Secretary	2006	Director, Senior Vice President, Secretary and General Counsel, Invesco Aim Management Group, Inc., Senior Vice President, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Director, Senior Vice President and Secretary, Invesco Aim Distributors, Inc.; Director, Vice President and Secretary, Invesco Aim Investment Services, Inc. and INVESCO Distributors, Inc.; Director and Vice President, INVESCO Funds Group, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The AIM Family of Funds®; and Manager, Invesco PowerShares Capital Management LLC	N/A
		Formerly: Director, Senior Vice President, General Counsel and Secretary, Invesco Aim Advisors, Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco Aim Capital Management, Inc.; Chief Operating Officer and General Counsel, Liberty Ridge Capital, Inc. (an investment adviser); Vice President and Secretary, PBHG Funds (an investment company) and PBHG Insurance Series Fund (an investment company); Chief Operating Officer, General Counsel and Secretary, Old Mutual Investment Partners (a broker-dealer); General Counsel and Secretary, Old Mutual Fund Services (an administrator) and Old Mutual Shareholder Services (a shareholder servicing center); Executive Vice President, General Counsel and Secretary, Old Mutual Capital, Inc. (an investment adviser); and Vice President and Secretary, Old Mutual Advisors Funds (an investment company)
Lisa O. Brinkley — 1959 Vice President	2004	Global Compliance Director, Invesco Ltd.; Chief Compliance Officer, Invesco Aim Distributors, Inc. and Invesco Aim Investment Services, Inc.; and Vice President, The AIM Family of Funds®	N/A
		Formerly: Senior Vice President, Invesco Aim Management Group, Inc.; Senior Vice President and Chief Compliance Officer, Invesco Aim Advisors, Inc. and The AIM Family of Funds®; Vice President and Chief Compliance Officer, Invesco Aim Capital Management, Inc. and Invesco Aim Distributors, Inc.; Vice President, Invesco Aim Investment Services, Inc. and Fund Management Company
Kevin M. Carome — 1956 Vice President	2003	General Counsel, Secretary and Senior Managing Director, Invesco Ltd.; Director, Invesco Holding Company Limited and INVESCO Funds Group, Inc.; Director and Executive Vice President, IVZ, Inc., Invesco Group Services, Inc., Invesco North American Holdings, Inc. and Invesco Investments (Bermuda) Ltd.; Director and Secretary, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); and Vice President, The AIM Family of Funds®	N/A
		Formerly: Senior Managing Director and Secretary, Invesco North American Holdings, Inc.; Vice President and Secretary, IVZ, Inc. and Invesco Group Services, Inc.; Senior Managing Director and Secretary, Invesco Holding Company Limited; Director, Senior Vice President, Secretary and General Counsel, Invesco Aim Management Group, Inc. and Invesco Aim Advisors, Inc.; Senior Vice President, Invesco Aim Distributors, Inc.; Director, General Counsel and Vice President, Fund Management Company; Vice President, Invesco Aim Capital Management, Inc. and Invesco Aim Investment Services, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The AIM Family of Funds®; Director and Vice President, INVESCO Distributors, Inc.; and Chief Executive Officer and President, INVESCO Funds Group, Inc.
Sheri Morris — 1964 Vice President, Treasurer and Principal Financial Officer	1999	Vice President, Treasurer and Principal Financial Officer, The AIM Family of Funds®; and Vice President, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.) Formerly: Vice President, Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.; Assistant Vice President and Assistant Treasurer, The AIM Family of Funds® and Assistant Vice President, Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A
Karen Dunn Kelley — 1960 Vice President	1993	Head of Invesco’s World Wide Fixed Income and Cash Management Group; Senior Vice President, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Executive Vice President, Invesco Aim Distributors, Inc.; Senior Vice President, Invesco Aim Management Group, Inc.; and Director, Invesco Mortgage Capital Inc.; Vice President, The AIM Family of Funds® (other than AIM Treasurer’s Series Trust and Short-Term Investments Trust); and President and Principal Executive Officer, The AIM Family of Funds® (AIM Treasurer’s Series Trust and Short-Term Investments Trust only)	N/A
		Formerly: Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Director of Cash Management and Senior Vice President, Invesco Aim Advisors, Inc. and Invesco Aim Capital Management, Inc.; President and Principal Executive Officer, Tax-Free Investments Trust; Director and President, Fund Management Company; Chief Cash Management Officer, Director of Cash Management, Senior Vice President, and Managing Director, Invesco Aim Capital Management, Inc.; Director of Cash Management, Senior Vice President, and Vice President, Invesco Aim Advisors, Inc. and The AIM Family of Funds® (AIM Treasurer’s Series Trust, Short-Term Investments Trust and Tax-Free Investments Trust only)
Lance A. Rejsek — 1967 Anti-Money Laundering Compliance Officer	2005	Anti-Money Laundering Compliance Officer, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Invesco Aim Distributors, Inc., Invesco Aim Investment Services, Inc., and The AIM Family of Funds®	N/A
		Formerly: Anti-Money Laundering Compliance Officer, Fund Management Company, Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.
Todd L. Spillane — 1958 Chief Compliance Officer	2006	Senior Vice President, Invesco Aim Management Group, Inc.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Chief Compliance Officer, The AIM Family of Funds®, INVESCO Private Capital Investments, Inc. (holding company), Invesco Private Capital, Inc. (registered investment adviser) and Invesco Senior Secured Management, Inc. (registered investment adviser); Vice President, Invesco Aim Distributors, Inc. and Invesco Aim Investment Services, Inc.	N/A
		Formerly: Senior Vice President and Chief Compliance Officer, Invesco Aim Advisors, Inc. and Invesco Aim Capital Management, Inc.; Chief Compliance Officer, Invesco Global Asset Management (N.A.), Inc.; Vice President, Invesco Aim Capital Management, Inc. and Fund Management Company

The Statement of Additional Information of the Trust includes additional information about the Fund’s Trustees and is available upon request, without charge, by calling 1.800.959.4246. Please refer to the Fund’s prospectus for information on the Fund’s sub-advisers.

Office of the Fund	Investment Adviser	Distributor	Auditors
11 Greenway Plaza, Suite 100	Invesco Advisers, Inc.	Invesco Aim Distributors, Inc.	PricewaterhouseCoopers LLP
Houston, TX 77046-1173	1555 Peachtree Street, N.E.	11 Greenway Plaza, Suite 100	1201 Louisiana Street, Suite 2900
	Atlanta, GA 30309	Houston, TX 77046-1173	Houston, TX 77002-5678
Counsel to the Fund	Counsel to the	Transfer Agent	Custodian
Stradley Ronon Stevens & Young, LLP	Independent Trustees	Invesco Aim Investment Services, Inc.	State Street Bank and Trust Company
2600 One Commerce Square	Kramer, Levin, Naftalis & Frankel LLP	P.O. Box 4739	225 Franklin
Philadelphia, PA 19103	1177 Avenue of the Americas	Houston, TX 77210-4739	Boston, MA 02110-2801
	New York, NY 10036-2714

T-2

AIM V.I. International Growth Fund

Annual Report to Shareholders § December 31, 2009

The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter-ends. For the second and fourth quarters, the lists appear in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The Fund’s Form N-Q filings are available on the SEC website, sec.gov. Copies of the Fund’s Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers for the Fund are 811-07452 and 033-57340. The Fund’s most recent portfolio holdings, as filed on Form N-Q, have also been made available to insurance companies issuing variable annuity contracts and variable life insurance policies (“variable products”) that invest in the Fund.

A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, from our Client Services department at 800 410 4246 or on the Invesco Aim website, invescoaim.com. On the home page, scroll down and click on Proxy Policy. The information is also available on the SEC website, sec.gov.

Information regarding how the Fund voted proxies related to its portfolio securities during the 12 months ended June 30, 2009, is available at our website, invescoaim.com. Click the About Us tab at the top of the home page; click Legal Information; and then click Proxy Voting Search. The information is also available on the SEC website, sec.gov.

Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Aim Distributors, Inc. is the U.S. distributor for Invesco Ltd.’s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd.

This report must be accompanied or preceded by a currently effective Fund prospectus and variable product prospectus, which contain more complete information, including sales charges and expenses. Investors should read each carefully before investing.

Invesco Aim Distributors, Inc.

NOT FDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEE

Management’s Discussion of Fund Performance

Performance summary

For the year ended December 31, 2009, shares of AIM V.I. International Growth Fund, excluding variable product issuer charges, delivered double- digit gains, outperforming both its style-specific index, the MSCI EAFE Growth Index, and its broad market index, the MSCI EAFE Index.

     Versus the MSCI EAFE Growth Index, stock selection in the health care, information technology (IT) and financials sectors was the key driver of outperformance while the Fund’s underweight position in the materials sector was the largest detractor. The Fund’s higher-than-average cash exposure detracted from relative results versus both the MSCI EAFE Index and the MSCI EAFE Growth Index.

     Your Fund’s long-term performance appears later in this report.

Fund vs. Indexes

Total returns, 12/31/08 to 12/31/09, excluding variable product issuer charges.

If variable product issuer charges were included, returns would be lower.

Series I Shares	35.24	%
Series II Shares	34.91
MSCI EAFE Index6 (Broad Market Index)	31.78
MSCI EAFE Growth Index6 (Style-Specific Index)	29.36
Lipper VUF International Growth Funds Index6 (Peer Group Index)	35.75

⁶ Lipper Inc.

How we invest

When selecting stocks for your Fund, we employ a disciplined investment strategy that emphasizes fundamental research, supported by both quantitative analysis and portfolio construction techniques. Our EQV (Earnings, Quality, Valuation) strategy focuses primarily on identifying quality companies that have experienced, or exhibit the potential for, accelerating or above average earnings growth but whose stock prices do not fully reflect these attributes.

     While research responsibilities within the portfolio management team are focused by geographic region, we select investments for the Fund by using a bottom-up investment approach, which means that we construct the Fund primarily on a stock-by-stock basis. We focus on the strengths of individual companies rather than sectors, countries or market-cap trends.

     We believe disciplined sell decisions are key to successful investing. We consider selling a stock for any one of the following reasons:

§ A company’s fundamentals deteriorate, or it posts disappointing earnings.

§ A stock’s price seems overvalued.

§ A more attractive opportunity becomes available.

Market conditions and your Fund

The year was truly a tale of two markets. During the first few months of the fiscal year, global equity markets experienced declines as severe problems in credit markets, a rapidly deteriorating housing market, rising energy and food prices and a deteriorating outlook for corporate earnings led to a global economic recession. Global equity markets began to recover some of the losses beginning in early March as unprecedented, synchronized action by global policy makers improved the outlook for economic recovery. The vast majority of developed countries finished the reporting period in positive territory, in some cases with double-digit results, while emerging markets like China posted even larger gains.

     AIM V.I. International Growth Fund followed this trend with weaker results early in 2009. However, a disciplined implementation of the Fund’s quality growth investment strategy produced positive results for the rest of the fiscal year. Overall, for the reporting period, the Fund delivered strong double-digit gains, outperforming its style-specific index, the MSCI EAFE Growth Index.¹

     On an absolute basis, all sector weightings posted double-digit returns for the reporting period. Outperformance versus the MSCI EAFE Growth Index came from the health care, IT and financials sectors. In each sector, favorable stock selection was a key driver of outperformance.

     In the health care sector, particular strength was seen in the health care equipment and pharmaceutical industries. Top performers included the global leader in generic pharmaceuticals, Teva Pharmaceutical Industries and Switzerland-based developer, distributor and provider of hearing instruments, Sonova Holding.

     In the IT sector, Fund outperformance was seen in the information technology services and electronic equipment segments of the market. Triple-digit gains were seen in Fund holdings Infosys Technologies and Nidec. In each of these instances, the index had limited to no exposure in these holdings, demonstrating the benefits of the Fund’s actively managed, non-benchmark focused investment process.

Portfolio Composition
By sector

Health Care		17.9	%
Consumer Staples		14.4
Industrials		11.7
Consumer Discretionary		10.8
Energy		9.1
Information Technology		8.2
Telecommunication Services		7.4
Financials		6.5
Materials		4.2
Utilities		1.4
Money Market Funds Plus Other Assets Less Liabilities		8.4
Top 10 Equity Holdings*
1. Teva Pharmaceutical Industries Ltd.-ADR		2.8	%
2. Roche Holding AG		2.7
3. Imperial Tobacco Group PLC		2.3
4. Reckitt Benckiser Group PLC		2.3
5. Nestle S.A.		2.3
6. Bayer AG		2.2
7. Shire PLC		2.1
8. Anheuser-Busch InBev N.V.		2.0
9. Infosys Technologies Ltd.		1.9
10. BHP Billiton Ltd.		1.9
Total Net Assets	$2.1 billion
Total Number of Holdings*		81

The Fund’s holdings are subject to change, and there is no assurance that the Fund will continue to hold any particular security.

* Excluding money market fund holdings.

AIM V.I. International Growth Fund

     In contrast, the Fund’s higher-than-average cash position was the largest detractor from relative Fund performance over the reporting period as equities rallied sharply. The Fund’s cash exposure was not a strategic decision, but a result of our stock selection process. In addition, despite delivering double-digit gains in the materials sector, the Fund’s underweight exposure prevented the Fund from fully participating in this sector’s strength.

     In broad geographic terms, all regions in which the Fund invested delivered double-digit absolute gains over the reporting period. Versus the MSCI EAFE Growth Index, portfolio holdings in Asia outperformed versus the Asian component of the benchmark. Our holdings in Europe modestly lagged the benchmark component over the fiscal year. Exposure in emerging markets also helped as these markets saw significant gains over the reporting period as the index does not provide exposure to emerging markets.

     Activity in the portfolio increased toward the latter part of the fiscal year bringing down our cash position to approximately 8% at the end of the reporting period. Stock selection in the portfolio is driven by the underlying fundamentals of a company rather than any top down macroeconomic views. That being said, the Fund’s exposures in the energy, industrials and health care sectors increased over the reporting period due to a combination of new purchases and appreciation. Liquidations in the consumer discretionary and IT sectors led to a reduction in Fund exposure to these segments of the market.

     After world stock markets bottomed in early March, most developed countries delivered strong returns through the end of the fiscal year. Gains in emerging markets were even more impressive with several markets generating triple-digit returns.

     We believe prudent securities selection and evaluation should play a substantial role in long-term investment plans. We welcome any new investors who have joined the Fund during the reporting period, and say thank you to all of you for your continued investment in AIM V.I. International Growth Fund.

1 Lipper Inc.

The views and opinions expressed in management’s discussion of Fund performance are those of Invesco Advisers, Inc. These views and opinions are subject to change at any time based on factors such as market and economic conditions. These views and opinions may not be relied upon as investment advice or recommendations, or as 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 Invesco Advisers, Inc. 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.

See important Fund and index disclosures later in this report.

Clas Olsson

Senior portfolio manager and head of Invesco Aim’s International Investment Unit, is lead manager of AIM V.I. International Growth Fund with respect to the Fund’s investments in Europe and Canada. He joined Invesco Aim in 1994. Mr. Olsson earned a B.B.A. from The University of Texas at Austin.

Barrett Sides

Senior portfolio manager, is lead manager of AIM V.I. International Growth Fund with respect to the Fund’s investments in the Asia Pacific region and Latin America. He joined Invesco Aim in 1990. Mr. Sides earned a B.S. in economics from Bucknell University and an M.B.A. in international business from the University of St. Thomas.

Shuxin Cao

Chartered Financial Analyst, senior portfolio manager, is manager of AIM V.I. International Growth Fund. Mr. Cao joined Invesco Aim in 1997. He graduated from Tianjin Foreign Language Institute with a B.A. in English and also earned an M.B.A. from Texas A&M University. He is a Certified Public Accountant.

Matthew Dennis

Chartered Financial Analyst, portfolio manager, is manager of AIM V.I. International Growth Fund. Mr. Dennis joined Invesco Aim in 2000. He earned a B.A. in economics from The University of Texas at Austin and an M.S. in finance from Texas A&M University.

Jason Holzer

Chartered Financial Analyst, senior portfolio manager, is manager of AIM V.I. International Growth Fund. Mr. Holzer joined Invesco Aim in 1996. He earned a B.A. in quantitative economics and an M.S. in engineering economic systems from Stanford University.

Assisted by the Asia Pacific/Latin America Team and the Europe/ Canada Team

AIM V.I. International Growth Fund

Your Fund’s Long-Term Performance

Results of a $10,000 Investment — Oldest Share Class since Inception
Index data from 4/30/93, Fund data from 5/5/93

1 Lipper Inc.

Past performance cannot guarantee comparable future results.

     This chart, which is a logarithmic chart, presents the fluctuations in the value of the Fund and its indexes. We believe that a logarithmic chart is more effective than other types of charts in illustrating changes in value during the early years shown in the chart. The vertical axis, the one that indicates the dollar value of an investment, is constructed with each segment representing a percent change in the value of the investment. In this chart, each segment represents a doubling, or 100% change, in the value of the investment. In other words, the space between $5,000 and $10,000 is the same size as the space between $10,000 and $20,000, and so on.

Average Annual Total Returns
As of 12/31/09

Series I Shares
Inception (5/5/93)	7.53	%
10 Years	0.61
5 Years	6.94
1 Year	35.24
Series II Shares
10 Years	0.35	%
5 Years	6.68
1 Year	34.91

Series II shares’ inception date is September 19, 2001. Returns since that date are historical. All other returns are the blended returns of the historical performance of Series II shares since their inception and the restated historical performance of Series I shares (for periods prior to inception of Series II shares) adjusted to reflect the Rule 12b-1 fees applicable to Series II shares. The inception date of Series I shares is May 5, 1993. The performance of the Fund’s Series I and Series II share classes will differ primarily due to different class expenses.

     The performance data quoted represent past performance and cannot guarantee comparable future results; current performance may be lower or higher. Please contact your variable product issuer or financial adviser for the most recent month-end variable product performance. Performance figures reflect Fund expenses, reinvested distributions and changes in net asset value. Investment return and principal value will fluctuate so that you may have a gain or loss when you sell shares.

     The net annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 1.07% and 1.32%, respectively.¹ The total annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 1.08% and 1.33%, respectively. The expense ratios presented above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

     AIM V.I. International Growth Fund, a series portfolio of AIM Variable Insurance Funds, is currently offered through insurance companies issuing variable products. You cannot purchase shares of the Fund directly. Performance figures given represent the Fund and are not intended to reflect actual variable product values. They do not reflect sales charges, expenses and fees assessed in connection with a variable product. Sales charges, expenses and fees, which are determined by the variable product issuers, will vary and will lower the total return.

     The most recent month-end performance data at the Fund level, excluding variable product charges, is available on the Invesco Aim automated information line, 866 702 4402. As mentioned above, for the most recent month-end performance including variable product charges, please contact your variable product issuer or financial adviser.

1 Total annual operating expenses less any contractual fee waivers and/or expense reimbursements by the adviser in effect through at least June 30, 2010. See current prospectus for more information.

AIM V.I. International Growth Fund

AIM V.I. International Growth Fund’s investment objective is long-term growth of capital.

§ Unless otherwise stated, information presented in this report is as of December 31, 2009, and is based on total net assets.

§ Unless otherwise noted, all data provided by Invesco.

Principal risks of investing in the Fund

Investing in developing countries can add additional risk, such as high rates of inflation or sharply devalued currencies against the U.S. dollar. Transaction costs are often higher, and there may be delays in settlement procedures.

     Prices of equity securities change in response to many factors, including the historical and prospective earnings of the issuer, the value of its assets, general economic conditions, interest rates, investor perceptions and market liquidity.

     Foreign securities have additional risks, including exchange rate changes, political and economic upheaval, relative lack of information, relatively low market liquidity, and the potential lack of strict financial and accounting controls and standards.

     There is no guarantee that the investment techniques and risk analysis used by the Fund’s portfolio managers will produce the desired results.

     The prices of securities held by the Fund may decline in response to market risks.

About indexes used in this report

The MSCI EAFE^® Index is an unmanaged index considered representative of stocks of Europe, Australasia and the Far East.

     The MSCI EAFE^® Growth Index is an unmanaged index considered representative of growth stocks of Europe, Australasia and the Far East.

     The Lipper VUF International Growth Funds Index is an unmanaged index considered representative of international growth variable insurance underlying funds tracked by Lipper.

     The Fund is not managed to track the performance of any particular index, including the indexes defined here, and consequently, the performance of the Fund may deviate significantly from the performance of the indexes.

     A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group reflects fund expenses; performance of a market index does not.

Other information

The Chartered Financial Analyst^® (CFA^®) designation is globally recognized and attests to a charterholder’s success in a rigorous and comprehensive study program in the field of investment management and research analysis.

     CPA^® and Certified Public Accountant^® are trademarks owned by the American Institute of Certified Public Accountants

     The returns shown in management’s discussion of Fund performance are based on net asset values calculated for shareholder transactions. Generally accepted accounting principles require adjustments to be made to the net assets of the Fund at period end for financial reporting purposes, and as such, the net asset values for shareholder transactions and the returns based on those net asset values may differ from the net asset values and returns reported in the Financial Highlights. Additionally, the returns and net asset values shown throughout this report are at the Fund level only and do not include variable product issuer charges. If such charges were included, the total returns would be lower.

     Industry classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s.

AIM V.I. International Growth Fund

Schedule of Investments

December 31, 2009

	Shares		Value
Common Stocks & Other Equity Interests–90.69%
Australia–5.78%
BHP Billiton Ltd.		1,030,798	$	39,473,589
Cochlear Ltd.		435,780		26,909,323
CSL Ltd.		639,352		18,600,278
QBE Insurance Group Ltd.		972,148		22,189,068
Woolworths Ltd.		470,307		11,780,455
				118,952,713
Belgium–1.95%
Anheuser-Busch InBev N.V.		778,524		40,166,892
Canada–5.45%
Bombardier Inc.–Class B		3,293,938		15,011,620
Canadian National Railway Co.		285,447		15,520,951
Canadian Natural Resources Ltd.		250,563		18,039,201
Cenovus Energy Inc.		233,973		5,892,455
EnCana Corp.		233,973		7,579,830
Fairfax Financial Holdings Ltd.		22,549		8,796,052
Suncor Energy, Inc.		584,647		20,642,453
Talisman Energy Inc.		1,105,337		20,570,279
				112,052,841
Denmark–2.08%
Novo Nordisk A.S.–Class B		503,696		32,170,702
Vestas Wind Systems A.S.(a)		173,277		10,567,059
				42,737,761
Finland–0.40%
Nokia Corp.		642,408		8,235,884
France–4.49%
Axa S.A.		753,796		17,803,145
BNP Paribas		367,583		28,967,747
Danone S.A.		221,356		13,462,038
Total S.A.		502,441		32,153,293
				92,386,223
Germany–6.87%
Adidas AG		333,899		18,003,183
Bayer AG		554,507		44,258,599
Deutsche Boerse AG		101,255		8,407,457
Fresenius Medical Care AG & Co. KGaA		259,957		13,747,337
Merck KGaA		224,131		20,907,552
Puma AG Rudolf Dassler Sport		82,207		27,188,897
SAP AG		187,604		8,836,079
				141,349,104
Hong Kong–2.43%
Esprit Holdings Ltd.		2,042,336		13,441,017
Hutchison Whampoa Ltd.		3,680,000		25,165,375
Li & Fung Ltd.		2,766,000		11,382,903
				49,989,295
India–2.56%
Bharat Heavy Electricals Ltd.		254,163		13,071,960
Infosys Technologies Ltd.		710,797		39,565,724
				52,637,684
Ireland–0.59%
CRH PLC		445,964		12,063,654
Israel–2.82%
Teva Pharmaceutical Industries Ltd.–ADR		1,032,565		58,009,502
Italy–2.85%
Eni S.p.A.		1,115,337		28,356,738
Finmeccanica S.p.A.		1,905,778		30,352,477
				58,709,215
Japan–6.16%
Denso Corp.		457,600		13,718,788
Fanuc Ltd.		199,000		18,510,041
Hoya Corp.		782,700		20,756,660
Keyence Corp.		84,400		17,404,865
Komatsu Ltd.		515,100		10,742,273
Nidec Corp.		332,500		30,583,270
Toyota Motor Corp.		355,400		14,937,247
				126,653,144
Mexico–2.89%
America Movil S.A.B de C.V.–Series L–ADR		790,084		37,118,146
Grupo Televisa S.A.–ADR		1,076,039		22,338,570
				59,456,716
Netherlands–4.14%
Koninklijke (Royal) KPN N.V.		1,498,730		25,403,601
Koninklijke Ahold N.V.		1,773,571		23,511,468
TNT N.V.		858,076		26,228,895
Unilever N.V.		305,569		9,952,011
				85,095,975
Norway–0.52%
Petroleum Geo-Services A.S.A.(a)		949,963		10,776,457
Philippines–1.45%
Philippine Long Distance Telephone Co.		526,210		29,867,212

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

AIM V.I. International Growth Fund

	Shares		Value
Singapore–3.77%
Keppel Corp. Ltd.		4,514,000	$	26,254,417
Singapore Technologies Engineering Ltd.		7,931,000		18,222,866
United Overseas Bank Ltd.		2,385,000		33,176,717
				77,654,000
South Korea–0.88%
Hyundai Mobis		123,885		18,077,681
Spain–1.19%
Telefonica S.A.		882,347		24,558,843
Switzerland–8.80%
Nestle S.A.		968,702		47,015,440
Novartis AG		190,376		10,361,792
Roche Holding AG		329,786		56,046,128
Sonova Holding AG		275,396		33,267,634
Syngenta AG		122,803		34,377,278
				181,068,272
Taiwan–2.11%
MediaTek Inc.		926,000		16,080,876
Taiwan Semiconductor Manufacturing Co. Ltd.–ADR		2,384,019		27,273,177
				43,354,053
Turkey–0.70%
Akbank T.A.S.		2,269,387		14,334,896
United Kingdom–19.81%
BAE Systems PLC		2,902,247		16,732,137
BG Group PLC		1,316,006		23,576,586
British American Tobacco PLC		671,844		21,804,120
Capita Group PLC		1,219,247		14,712,472
Compass Group PLC		4,232,648		30,243,215
Imperial Tobacco Group PLC		1,531,767		48,294,078
Informa PLC		3,271,592		16,743,064
International Power PLC		5,818,340		28,800,070
Reckitt Benckiser Group PLC		885,264		48,006,773
Reed Elsevier PLC		2,302,201		18,913,033
Shire PLC		2,241,615		43,828,253
Smith & Nephew PLC		986,173		10,130,361
Tesco PLC		4,828,104		33,186,850
Vodafone Group PLC		15,073,982		34,921,398
WPP PLC		1,801,871		17,602,377
				407,494,787
Total Common Stocks & Other Equity Interests (Cost $1,554,428,890)				1,865,682,804
Preferred Stocks–0.93%
Brazil–0.93%
Petroleo Brasileiro S.A.–ADR–Pfd. (Cost $11,489,198)		450,078		19,078,806
Money Market Funds–8.50%
Liquid Assets Portfolio–Institutional Class(b)		87,398,565		87,398,565
Premier Portfolio–Institutional Class(b)		87,398,565		87,398,565
Total Money Market Funds (Cost $174,797,130)				174,797,130
TOTAL INVESTMENTS–100.12% (Cost $1,740,715,218)				2,059,558,740
OTHER ASSETS LESS LIABILITIES–(0.12)%				(2,161,637	)
NET ASSETS–100.00%			$	2,057,397,103

Investment Abbreviations:

ADR	– American Depositary Receipt
Pfd.	– Preferred

Notes to Schedule of Investments:

(a)	Non-income producing security.
(b)	The money market fund and the Fund are affiliated by having the same investment adviser.

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

AIM V.I. International Growth Fund

Statement of Assets and Liabilities

December 31, 2009

Assets:
Investments, at value (Cost $1,565,918,088)	$	1,884,761,610
Investments in affiliated money market funds, at value and cost		174,797,130
Total investments, at value (Cost $1,740,715,218)		2,059,558,740
Cash		874,768
Foreign currencies, at value (Cost $6,356,367)		6,613,907
Receivables for:
Fund shares sold		545,133
Dividends		1,933,791
Investment for trustee deferred compensation and retirement plans		44,330
Other assets		190
Total assets		2,069,570,859
Liabilities:
Payables for:
Investments purchased		6,959,557
Fund shares reacquired		1,581,660
Accrued fees to affiliates		2,142,456
Accrued other operating expenses		1,369,537
Trustee deferred compensation and retirement plans		120,546
Total liabilities		12,173,756
Net assets applicable to shares outstanding	$	2,057,397,103
Net assets consist of:
Shares of beneficial interest	$	2,000,694,850
Undistributed net investment income		20,893,939
Undistributed net realized gain (loss)		(283,340,650	)
Unrealized appreciation		319,148,964
	$	2,057,397,103
Net Assets:
Series I	$	556,882,625
Series II	$	1,500,514,478
Shares outstanding, $0.001 par value per share, unlimited number of shares authorized:
Series I		21,412,061
Series II		58,534,932
Series I:
Net asset value per share	$	26.01
Series II:
Net asset value per share	$	25.63

Statement of Operations

For the year ended December 31, 2009

Investment income:
Dividends (net of foreign withholding taxes of $3,420,137)	$	38,240,850
Dividends from affiliated money market funds		827,353
Interest		15,771
Total investment income		39,083,974
Expenses:
Advisory fees		11,124,431
Administrative services fees		4,230,684
Custodian fees		672,743
Distribution fees — Series II		2,741,343
Transfer agent fees		63,627
Trustees’ and officers’ fees and benefits		63,590
Other		122,258
Total expenses		19,018,676
Less: Fees waived		(244,017	)
Net expenses		18,774,659
Net investment income		20,309,315
Realized and unrealized gain (loss) from:
Net realized gain (loss) from:
Investment securities (includes net gains (losses) from securities sold to affiliates of $(16,406))		(148,905,454	)
Foreign currencies		1,165,597
		(147,739,857	)
Change in net unrealized appreciation of:
Investment securities (net of foreign taxes on holdings of $(1,149,532))		629,209,623
Foreign currencies		1,135,173
		630,344,796
Net realized and unrealized gain		482,604,939
Net increase in net assets resulting from operations	$	502,914,254

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

AIM V.I. International Growth Fund

Statement of Changes in Net Assets

For the years ended December 31, 2009 and 2008

	2009			2008
Operations:
Net investment income	$	20,309,315		$	26,345,327
Net realized gain (loss)		(147,739,857	)		(132,063,478	)
Change in net unrealized appreciation (depreciation)		630,344,796			(627,616,561	)
Net increase (decrease) in net assets resulting from operations		502,914,254			(733,334,712	)
Distributions to shareholders from net investment income:
Series I		(7,359,852	)		(3,478,321	)
Series II		(17,849,719	)		(5,065,468	)
Total distributions from net investment income		(25,209,571	)		(8,543,789	)
Distributions to shareholders from net realized gains:
Series I		—			(8,411,008	)
Series II		—			(14,727,306	)
Total distributions from net realized gains		—			(23,138,314	)
Share transactions–net:
Series I		(27,076,452	)		(13,325,486	)
Series II		366,967,140			480,159,184
Net increase in net assets resulting from share transactions		339,890,688			466,833,698
Net increase (decrease) in net assets		817,595,371			(298,183,117	)
Net assets:
Beginning of year		1,239,801,732			1,537,984,849
End of year (includes undistributed net investment income of $20,893,939 and $24,613,828, respectively)	$	2,057,397,103		$	1,239,801,732

Notes to Financial Statements

December 31, 2009

NOTE 1—Significant Accounting Policies

AIM V.I. International Growth Fund (the “Fund”) is a series portfolio of AIM Variable Insurance Funds (the “Trust”). The Trust is a Delaware statutory trust registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end series management investment company consisting of twenty-one separate portfolios, (each constituting a “Fund”). The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Matters affecting each Fund or class will be voted on exclusively by the shareholders of such Fund or class. Current Securities and Exchange Commission (“SEC”) guidance, however, requires participating insurance companies offering separate accounts to vote shares proportionally in accordance with the instructions of the contract owners whose investments are funded by shares of each Fund or class.

  The Fund’s investment objective is long-term growth of capital.

  The Fund currently offers two classes of shares, Series I and Series II, both of which are offered to insurance company separate accounts funding variable annuity contracts and variable life insurance policies (“variable products”).

  The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements.

A.

Security Valuations — Securities, including restricted securities, are valued according to the following policy.

A security listed or traded on an exchange (except convertible bonds) is valued at its last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales or official closing price on a particular day, the security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based on prices furnished by independent pricing services or market makers. When such securities are valued by an independent pricing service they may be considered fair valued. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean between the last bid and ask prices from the exchange on which they are principally traded. Options not listed on an exchange are valued by an independent source at the mean between the last bid and ask prices. For purposes of determining net asset value per share, futures and option contracts generally are valued 15 minutes after the close of the customary trading session of the New York Stock Exchange (“NYSE”).

AIM V.I. International Growth Fund

	Investments in open-end and closed-end registered investment companies that do not trade on an exchange are valued at the end of day net asset value per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded.
	Debt obligations (including convertible bonds) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution-size trading in similar groups of securities, developments related to specific securities, dividend rate, yield, quality, type of issue, coupon rate, maturity, individual trading characteristics and other market data. Short-term obligations, including commercial paper, having 60 days or less to maturity are recorded at amortized cost which approximates value. Debt securities are subject to interest rate and credit risks. In addition, all debt securities involve some risk of default with respect to interest and/or principal payments.
	Foreign securities (including foreign exchange contracts) are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the NYSE. If market quotations are available and reliable for foreign exchange traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that are significant and make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economical upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
	Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities and Corporate Loans. The mean between the last bid and asked prices may be used to value debt obligations other than Corporate Loans.
	Securities for which market quotations are not readily available or are unreliable are valued at fair value as determined in good faith by or under the supervision of the Trust’s officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a security’s fair value.
	Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
B.	Securities Transactions and Investment Income — Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income is recorded on the accrual basis from settlement date. Dividend income is recorded on the ex-dividend date.
	The Fund may periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain/loss for investments no longer held and as unrealized gain/loss for investments still held.
	Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the realized and unrealized net gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the Fund’s net asset value and, accordingly, they reduce the Fund’s total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in the Statement of Operations and Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the adviser.
	The Fund allocates income and realized and unrealized capital gains and losses to a class based on the relative net assets of each class.
C.	Country Determination — For the purposes of making investment selection decisions and presentation in the Schedule of Investments, the investment adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuer’s securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted.
D.	Distributions — Distributions from income and net realized capital gain, if any, are generally paid to separate accounts of participating insurance companies annually and recorded on ex-dividend date.
E.	Federal Income Taxes — The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code necessary to qualify as a regulated investment company and to distribute substantially all of the Fund’s taxable earnings to shareholders. As such, the Fund will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements.

AIM V.I. International Growth Fund

	The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.
F.	Expenses — Fees provided for under the Rule 12b-1 plan of a particular class of the Fund and which are directly attributable to that class are charged to the operations of such class. All other expenses are allocated among the classes based on relative net assets.
G.	Accounting Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print, which is generally 45 days from the period-end date.
H.	Indemnifications — Under the Trust’s organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Fund’s servicing agreements, that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote.
I.	Foreign Currency Translations — Foreign currency is valued at the close of the NYSE based on quotations posted by banks and major currency dealers. Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at date of valuation. Purchases and sales of portfolio securities (net of foreign taxes withheld on disposition) and income items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. The Fund does not separately account for the portion of the results of operations resulting from changes in foreign exchange rates on investments and the fluctuations arising from changes in market prices of securities held. The combined results of changes in foreign exchange rates and the fluctuation of market prices on investments (net of estimated foreign tax withholding) are included with the net realized and unrealized gain or loss from investments in the Statement of Operations. Reported net realized foreign currency gains or losses arise from (i) sales of foreign currencies, (ii) currency gains or losses realized between the trade and settlement dates on securities transactions, and (iii) the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign currency gains and losses arise from changes in the fair values of assets and liabilities, other than investments in securities at fiscal period end, resulting from changes in exchange rates.
	The Fund may invest in foreign securities which may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable.
J.	Foreign Currency Contracts — The Fund may enter into foreign currency contracts to manage or minimize currency or exchange rate risk. The Fund may also enter into foreign currency contracts for the purchase or sale of a security denominated in a foreign currency in order to “lock in” the U.S. dollar price of that security. A foreign currency contract is an obligation to purchase or sell a specific currency for an agreed-upon price at a future date. The use of foreign currency contracts does not eliminate fluctuations in the price of the underlying securities the Fund owns or intends to acquire but establishes a rate of exchange in advance. Fluctuations in the value of these contracts are measured by the difference in the contract date and reporting date exchange rates and are recorded as unrealized appreciation (depreciation) until the contracts are closed. When the contracts are closed, realized gains (losses) are recorded. Realized and unrealized gains (losses) on the contracts are included in the Statement of Operations. The primary risks associated with foreign currency contracts include failure of the counterparty to meet the terms of the contract and the value of the foreign currency changing unfavorably. These risks may be in excess of the amounts reflected in the Statement of Assets and Liabilities.

NOTE 2—Advisory Fees and Other Fees Paid to Affiliates

The Trust has entered into a master investment advisory agreement with Invesco Advisers, Inc. (the “Adviser” or “Invesco”). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Adviser based on the annual rate of the Fund’s average daily net assets as follows:

Average Net Assets	Rate
First $250 million		0	.75%
Over $250 million		0	.70%

  Under the terms of a master sub-advisory agreement approved by shareholders of the Funds between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Global Asset Management (N.A.), Inc., Invesco Hong Kong Limited, Invesco Institutional (N.A.), Inc., Invesco Senior Secured Management, Inc. and Invesco Trimark Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Funds, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide discretionary investment management services to each Fund based on the percentage of assets allocated to such Sub-Adviser(s).

  On December 31, 2009, Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc., Invesco Private Asset Management, Inc. and Invesco Global Asset Management (N.A.), Inc. merged into Invesco Institutional (N.A.), Inc. and the consolidated adviser firm was renamed Invesco Advisers, Inc.

  The Adviser has contractually agreed to waive advisory fees and/or reimburse expenses of all shares to the extent necessary to limit total annual fund operating expenses after fee waiver (excluding certain items discussed below) of Series I shares to 1.30% and Series II shares to 1.45% of average daily net assets, through at least April 30, 2011. In determining the Adviser’s obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the total annual fund operating expenses after fee waiver to exceed the numbers reflected above: (1) interest; (2) taxes; (3) dividend expense on short sales; (4) extraordinary or non-routine items; and (5) expenses that the Fund has incurred but did not actually pay because of

AIM V.I. International Growth Fund

an expense offset arrangement. The Board of Trustees or Invesco may terminate the fee waiver arrangement at any time. The Adviser did not waive fees and/or reimburse expenses during the period under this expense limitation.

  Further, the Adviser has contractually agreed, through at least June 30, 2010, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash (excluding investments of cash collateral from securities lending) in such affiliated money market funds.

  For the year ended December 31, 2009, the Adviser waived advisory fees of $244,017.

  At the request of the Trustees of the Trust, Invesco Ltd. agreed to reimburse expenses incurred by the Fund in connection with market timing matters in the AIM Funds, which may include legal, audit, shareholder reporting, communications and trustee expenses. For the year ended December 31, 2009, Invesco Ltd. did not reimburse any expenses.

  The Trust has entered into a master administrative services agreement with Invesco pursuant to which the Fund has agreed to pay Invesco a fee for costs incurred in providing accounting services and fund administrative services to the Fund and to reimburse Invesco for administrative services fees paid to insurance companies that have agreed to provide services to the participants of separate accounts. These administrative services provided by the insurance companies may include, among other things: the printing of prospectuses, financial reports and proxy statements and the delivery of the same to existing participants; the maintenance of master accounts; the facilitation of purchases and redemptions requested by the participants; and the servicing of participants’ accounts. Pursuant to such agreement, for the year ended December 31, 2009, Invesco was paid $364,275 for accounting and fund administrative services and reimbursed $3,866,409 for services provided by insurance companies.

  The Trust has entered into a transfer agency and service agreement with Invesco Aim Investment Services, Inc. (“IAIS”) pursuant to which the Fund has agreed to pay IAIS a fee for providing transfer agency and shareholder services to the Fund and reimburse IAIS for certain expenses incurred by IAIS in the course of providing such services. For the year ended December 31, 2009, expenses incurred under the agreement are shown in the Statement of Operations as transfer agent fees.

  The Trust has entered into a master distribution agreement with Invesco Aim Distributors, Inc. (“IADI”) to serve as the distributor for the Fund. The Trust has adopted a plan pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund’s Series II shares (the “Plan”). The Fund, pursuant to the Plan, pays IADI compensation at the annual rate of 0.25% of the Fund’s average daily net assets of Series II shares. Of the Plan payments, up to 0.25% of the average daily net assets of the Series II shares may be paid to insurance companies who furnish continuing personal shareholder services to customers who purchase and own Series II shares of the Fund. For the year ended December 31, 2009, expenses incurred under the Plan are detailed in the Statement of Operations as distribution fees.

  Certain officers and trustees of the Trust are officers and directors of Invesco, IAIS and/or IADI.

NOTE 3—Additional Valuation Information

Generally Accepted Accounting Principles (“GAAP”) defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3) generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment’s assigned level:

Level 1 —	Prices are determined using quoted prices in an active market for identical assets.
Level 2 —	Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk and others.
Level 3 —	Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information.

  The following is a summary of the tiered valuation input levels, as of December 31, 2009. The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.

	Level 1		Level 2		Level 3		Total
Australia	$	—	$	118,952,713	$	—	$	118,952,713
Belgium		—		40,166,892		—		40,166,892
Brazil		19,078,806		—		—		19,078,806
Canada		112,052,841		—		—		112,052,841
Denmark		42,737,761		—		—		42,737,761
Finland		—		8,235,884		—		8,235,884
France		—		92,386,223		—		92,386,223
Germany		43,062,346		98,286,758		—		141,349,104
Hong Kong		—		49,989,295		—		49,989,295
India		—		52,637,684		—		52,637,684

AIM V.I. International Growth Fund

	Level 1		Level 2		Level 3		Total
Ireland		—		12,063,654		—		12,063,654
Israel		58,009,502		—		—		58,009,502
Italy		—		58,709,215		—		58,709,215
Japan		17,404,865		109,248,279		—		126,653,144
Mexico		59,456,716		—		—		59,456,716
Netherlands		58,867,080		26,228,895		—		85,095,975
Norway		—		10,776,457		—		10,776,457
Philippines		29,867,212		—		—		29,867,212
Singapore		—		77,654,000		—		77,654,000
South Korea		—		18,077,681		—		18,077,681
Spain		24,558,843		—		—		24,558,843
Switzerland		—		181,068,272		—		181,068,272
Taiwan		27,273,177		16,080,876		—		43,354,053
Turkey		14,334,896		—		—		14,334,896
United Kingdom		91,835,026		315,659,761		—		407,494,787
United States		174,797,130		—		—		174,797,130
Total Investments	$	773,336,201	$	1,286,222,539	$	—	$	2,059,558,740

NOTE 4—Security Transactions with Affiliated Funds

The Fund is permitted to purchase or sell securities from or to certain other AIM Funds under specified conditions outlined in procedures adopted by the Board of Trustees of the Trust. The procedures have been designed to ensure that any purchase or sale of securities by the Fund from or to another fund or portfolio that is or could be considered an affiliate by virtue of having a common investment adviser (or affiliated investment advisers), common Trustees and/or common officers complies with Rule 17a-7 of the 1940 Act. Further, as defined under the procedures, each transaction is effected at the current market price. Pursuant to these procedures, for the year ended December 31, 2009, the Fund engaged in securities sales of $57,614, which resulted in net realized gains (losses) of $(16,406).

NOTE 5—Trustees’ and Officers’ Fees and Benefits

“Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and “Trustees’ and Officers’ Fees and Benefits” also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various AIM Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees are eligible to participate in a retirement plan that provides for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former Trustees who also participate in a retirement plan and receive benefits under such plan. “Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund.

  During the year ended December 31, 2009, the Fund paid legal fees of $6,073 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A member of that firm is a Trustee of the Trust.

NOTE 6—Cash Balances

The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with The State Street Bank and Trust Company, the custodian bank. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (i) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (ii) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.

NOTE 7—Distributions to Shareholders and Tax Components of Net Assets

Tax Character of Distributions to Shareholders Paid During the Years Ended December 31, 2009 and 2008:

	2009		2008
Ordinary income	$	25,209,571	$	10,198,789
Long-term capital gain		—		21,483,314
Total distributions	$	25,209,571	$	31,682,103

AIM V.I. International Growth Fund

Tax Components of Net Assets at Period-End:

	2009
Undistributed ordinary income	$	21,017,881
Net unrealized appreciation — investments		271,370,891
Net unrealized appreciation — other investments		305,442
Temporary book/tax differences		(123,942	)
Post-October deferrals		(4,745,883	)
Capital loss carryforward		(231,122,136	)
Shares of beneficial interest		2,000,694,850
Total net assets	$	2,057,397,103

  The difference between book-basis and tax-basis unrealized appreciation (depreciation) is due to differences in the timing of recognition of gains and losses on investments for tax and book purposes. The Fund’s net unrealized appreciation difference is attributable primarily to wash sales.

  The temporary book/tax differences are a result of timing differences between book and tax recognition of income and/or expenses. The Fund’s temporary book/tax differences are the result of the trustee deferral of compensation and retirement plan benefits.

  Capital loss carryforward is calculated and reported as of a specific date. Results of transactions and other activity after that date may affect the amount of capital loss carryforward actually available for the Fund to utilize. The ability to utilize capital loss carryforward in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.

  The Fund has a capital loss carryforward as of December 31, 2009 which expires as follows:

	Capital Loss
Expiration	Carryforward*
December 31, 2016	$	87,932,439
December 31, 2017		143,189,697
Total capital loss carryforward	$	231,122,136

*  Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code.

NOTE 8—Investment Securities

The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the year ended December 31, 2009 was $725,625,357 and $379,844,151, respectively. Cost of investments on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed Federal income tax reporting period-end.

Unrealized Appreciation (Depreciation) of Investment Securities on a Tax Basis
Aggregate unrealized appreciation of investment securities	$	302,885,608
Aggregate unrealized (depreciation) of investment securities		(31,514,717	)
Net unrealized appreciation of investment securities	$	271,370,891
Cost of investments for tax purposes is $1,788,187,849.

NOTE 9—Reclassification of Permanent Differences

Primarily as a result of differing book/tax treatment of foreign currency transactions, on December 31, 2009, undistributed net investment income was increased by $1,180,367 and undistributed net realized gain (loss) was decreased by $1,180,367. This reclassification had no effect on the net assets of the Fund.

AIM V.I. International Growth Fund

NOTE 10—Share Information

	Summary of Share Activity
	Year ended December 31,
	2009(a)						2008
	Shares			Amount			Shares			Amount
Sold:
Series I		3,456,056		$	76,132,583			5,416,504		$	152,657,919
Series II		21,080,766			443,187,963			22,885,713			587,146,644
Issued as reinvestment of dividends:
Series I		284,164			7,359,852			647,214			11,889,329
Series II		698,893			17,849,719			1,091,714			19,792,774
Reacquired:
Series I		(5,238,473	)		(110,568,887	)		(6,729,062	)		(177,872,734	)
Series II		(4,496,473	)		(94,070,542	)		(5,147,388	)		(126,780,234	)
Net increase in share activity		15,784,933		$	339,890,688			18,164,695		$	466,833,698

^(a) There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 62% of the outstanding shares of the Fund. The Fund and the Fund’s principal underwriter or adviser, are parties to participation agreements with these entities whereby these entities sell units of interest in separate accounts funding variable products that are invested in the Fund. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as, securities brokerage, third party record keeping and account servicing and administrative services. The Trust has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially.

NOTE 11—Financial Highlights

The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.

																											Ratio of			Ratio of
																											expenses			expenses
					Net gains																						to average			to average net			Ratio of net
	Net asset				(losses) on						Dividends			Distributions													net assets			assets without			investment
	value,		Net		securities (both			Total from			from net			from net						Net asset					Net assets,		with fee waivers			fee waivers			income
	beginning		investment		realized and			investment			investment			realized			Total			value, end		Total			end of period		and/or expenses			and/or expenses			to average			Portfolio
	of period		income(a)		unrealized)			operations			income			gains			Distributions			of period		Return(b)			(000s omitted)		absorbed			absorbed			net assets			turnover(c)
Series I
Year ended 12/31/09	$	19.49	$	0.32	$	6.55		$	6.87		$	(0.35	)	$	—		$	(0.35	)	$	26.01		35.24	%	$	556,883		1.02	%(d)		1.04	%(d)		1.47	%(d)		27	%
Year ended 12/31/08		33.63		0.54		(14.16	)		(13.62	)		(0.15	)		(0.37	)		(0.52	)		19.49		(40.38	)		446,437		1.05			1.06			1.96			44
Year ended 12/31/07		29.44		0.34		3.98			4.32			(0.13	)		—			(0.13	)		33.63		14.68			792,779		1.06			1.07			1.06			20
Year ended 12/31/06		23.17		0.23		6.32			6.55			(0.28	)		—			(0.28	)		29.44		28.28			563,460		1.10			1.10			0.90			34
Year ended 12/31/05		19.77		0.23		3.31			3.54			(0.14	)		—			(0.14	)		23.17		17.93			444,608		1.11			1.11			1.11			36
Series II
Year ended 12/31/09		19.23		0.27		6.44			6.71			(0.31	)		—			(0.31	)		25.63		34.91			1,500,514		1.27	(d)		1.29	(d)		1.22	(d)		27
Year ended 12/31/08		33.24		0.45		(13.96	)		(13.51	)		(0.13	)		(0.37	)		(0.50	)		19.23		(40.55	)		793,365		1.30			1.31			1.71			44
Year ended 12/31/07		29.16		0.26		3.94			4.20			(0.12	)		—			(0.12	)		33.24		14.41			745,206		1.31			1.32			0.81			20
Year ended 12/31/06		23.00		0.17		6.25			6.42			(0.26	)		—			(0.26	)		29.16		27.92			163,657		1.35			1.35			0.65			34
Year ended 12/31/05		19.65		0.18		3.30			3.48			(0.13	)		—			(0.13	)		23.00		17.70			54,658		1.36			1.36			0.86			36

(a)	Calculated using average shares outstanding.
(b)	Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Total returns do not reflect charges assessed in connection with a variable product, which if included would reduce total returns.
(c)	Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable.
(d)	Ratios are based on average daily net assets (000’s omitted) of $474,810 and $1,096,537 for Series I and Series II shares, respectively.

NOTE 12— Subsequent Event

A significant shareholder of the Fund has notified Invesco of their intent to redeem their investment in the Fund. It is anticipated that the redemption in kind will occur in May 2010 and will result in a significant redemption of Series II Fund shares. The market value of the accounts anticipated to be redeemed were 49% of the Fund’s net assets at December 31, 2009.

AIM V.I. International Growth Fund

Report of Independent Registered Public Accounting Firm

To the Board of Trustees of AIM Variable Insurance Funds

and Shareholders of AIM V.I. International Growth Fund:

In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of AIM V.I. International Growth Fund, (one of the funds constituting AIM Variable Insurance Funds, hereafter referred to as the “Fund”) at December 31, 2009, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at December 31, 2009 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.

PRICEWATERHOUSECOOPERS LLP

February 10, 2010

Houston, Texas

AIM V.I. International Growth Fund

Calculating your ongoing Fund expenses

Example

As a shareholder of the Fund, you incur ongoing costs, including management fees; distribution and/or service fees (12b-1); and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period July 1, 2009 through December 31, 2009.

  The actual and hypothetical expenses in the examples below do not represent the effect of any fees or other expenses assessed in connection with a variable product; if they did, the expenses shown would be higher while the ending account values shown would be lower.

Actual expenses

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

Hypothetical example for comparison purposes

The table below also provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return.

  The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

  Please note that the expenses shown in the table are meant to highlight your ongoing costs. Therefore, the hypothetical information is useful in comparing ongoing costs, and will not help you determine the relative total costs of owning different funds.

							HYPOTHETICAL
							(5% annual return before
			ACTUAL				expenses)
	Beginning		Ending		Expenses		Ending		Expenses		Annualized
	Account Value		Account Value		Paid During		Account Value		Paid During		Expense
Class	(07/01/09)		(12/31/09)1		Period2		(12/31/09)		Period2		Ratio
Series I	$	1,000.00	$	1,220.30	$	5.65	$	1,020.11	$	5.14		1.01	%
Series II		1,000.00		1,218.60		7.05		1,018.85		6.41		1.26

1	The actual ending account value is based on the actual total return of the Fund for the period July 1, 2009 through December 31, 2009, after actual expenses and will differ from the hypothetical ending account value which is based on the Fund’s expense ratio and a hypothetical annual return of 5% before expenses.
2	Expenses are equal to the Fund’s annualized expense ratio as indicated above multiplied by the average account value over the period, multiplied by 184/365 to reflect the most recent fiscal half year.

AIM V.I. International Growth Fund

Tax Information

Form 1099-DIV, Form 1042-S and other year-end tax information provide shareholders with actual calendar year amounts that should be included in their tax returns. Shareholders should consult their tax advisors.

  The following distribution information is being provided as required by the Internal Revenue Code or to meet a specific state’s requirement.

  The Fund designates the following amounts or, if subsequently determined to be different, the maximum amount allowable for its fiscal year ended December 31, 2009:

Federal and State Income Tax
Corporate Dividends Received Deduction*		0%
Foreign Taxes	$	0.0431 per share
Foreign Source Income	$	0.5743 per share

*  The above percentage is based on ordinary income dividends paid to shareholders during the Fund’s fiscal year.

AIM V.I. International Growth Fund

Trustees and Officers

The address of each trustee and officer of AIM Variable Insurance Funds (the “Trust”), is 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173. Each trustee oversees 105 portfolios in the AIM Funds complex. The trustees serve for the life of the Trust, subject to their earlier death, incapacitation, resignation, retirement or removal as more specifically provided in the Trust’s organizational documents. Each officer serves for a one year term or until their successors are elected and qualified. Column two below includes length of time served with predecessor entities, if any.

	Trustee and/
Name, Year of Birth and	or Officer	Principal Occupation(s)	Other Directorship(s)
Position(s) Held with the Trust	Since	During Past 5 Years	Held by Trustee
Interested Persons
Martin L. Flanagan1 — 1960 Trustee	2007	Executive Director, Chief Executive Officer and President, Invesco Ltd. (ultimate parent of Invesco Aim and a global investment management firm); Adviser to the Board, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Trustee, The AIM Family of Funds®; Board of Governors, Investment Company Institute; and Member of Executive Board, SMU Cox School of Business	None
		Formerly: Chairman, Invesco Aim Advisors, Inc. (registered investment adviser); Director, Chairman, Chief Executive Officer and President, IVZ Inc. (holding company), INVESCO Group Services, Inc. (service provider) and Invesco North American Holdings, Inc. (holding company); Director, Chief Executive Officer and President, Invesco Holding Company Limited (parent of Invesco Aim and a global investment management firm); Director, Invesco Ltd.; Chairman and Vice Chairman, Investment Company Institute
Philip A. Taylor2 — 1954 Trustee, President and Principal Executive Officer	2006	Head of North American Retail and Senior Managing Director, Invesco Ltd.; Director, Co-Chairman, Co-President and Co- Chief Executive Officer, Invesco Advisers, inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Director, Chief Executive Officer and President, Invesco Aim Advisors, Inc. and 1371 Preferred Inc. (holding company); Director, Chairman, Chief Executive Officer and President, Invesco Aim Management Group, Inc. (financial services holding company); Director, Co-Chairman, Co-President and Co-Chief Executive Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Director and President, INVESCO Funds Group, Inc. (registered investment adviser and registered transfer agent) and AIM GP Canada Inc. (general partner for limited partnerships); Director, Invesco Aim Distributors, Inc. (registered broker dealer); Director and Chairman, Invesco Aim Investment Services, Inc. (registered transfer agent) and INVESCO Distributors, Inc. (registered broker dealer); Director, President and Chairman, INVESCO Inc. (holding company) and Invesco Canada Holdings Inc. (holding company); Chief Executive Officer, AIM Trimark Corporate Class Inc. (corporate mutual fund company) and AIM Trimark Canada Fund Inc. (corporate mutual fund company); Director and Chief Executive Officer, Invesco Trimark Ltd./Invesco Trimark Ltèe (registered investment adviser and registered transfer agent) and Invesco Trimark Dealer Inc. (registered broker dealer); Trustee, President and Principal Executive Officer, The AIM Family of Funds® (other than AIM Treasurer’s Series Trust and Short-Term Investments Trust); Trustee and Executive Vice President, The AIM Family of Funds® (AIM Treasurer’s Series Trust and Short-Term Investments Trust only); and Manager, Invesco PowerShares Capital Management LLC Formerly: Manager, Invesco PowerShares Capital Management LLC; Director, Chief Executive Officer and President, Invesco Aim Advisors, Inc.; Director, Chairman, Chief Executive Officer and President, Invesco Aim Capital Management, Inc.; President, Invesco Trimark Dealer Inc. and Invesco Trimark Ltd./Invesco Trimark Ltèe; Director and President, AIM Trimark Corporate Class Inc. and AIM Trimark Canada Fund Inc.; Senior Managing Director, Invesco Holding Company Limited; Trustee and Executive Vice President, Tax-Free Investments Trust; Director and Chairman, Fund Management Company (former registered broker dealer); President and Principal Executive Officer, The AIM Family of Funds® (AIM Treasurer’s Series Trust, Short-Term Investments Trust and Tax-Free Investments Trust only); President, AIM Trimark Global Fund Inc. and AIM Trimark Canada Fund Inc.	None
Independent Trustees
Bruce L. Crockett — 1944 Trustee and Chair	1993	Chairman, Crockett Technology Associates (technology consulting company)	ACE Limited (insurance company); Captaris, Inc. (unified messaging provider); and Investment Company Institute
Bob R. Baker — 1936 Trustee	2004	Retired	None
Frank S. Bayley — 1939 Trustee	2001	Retired Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios)	None
James T. Bunch — 1942 Trustee	2004	Founder, Green, Manning & Bunch Ltd., (investment banking firm)	Board of Governors, Western Golf Association/Evans Scholars Foundation and Executive Committee, United States Golf Association
Albert R. Dowden — 1941 Trustee	2000	Director of a number of public and private business corporations, including the Boss Group, Ltd. (private investment and management); Reich & Tang Funds (registered investment company); and Homeowners of America Holding Corporation/Homeowners of America Insurance Company (property casualty company)	Board of Nature’s Sunshine Products, Inc.
		Formerly: Director, Continental Energy Services, LLC (oil and gas pipeline service); Director, CompuDyne Corporation (provider of product and services to the public security market) and Director, Annuity and Life Re (Holdings), Ltd. (reinsurance company); Director, President and Chief Executive Officer, Volvo Group North America, Inc.; Senior Vice President, AB Volvo; Director of various public and private corporations
Jack M. Fields — 1952 Trustee	1997	Chief Executive Officer, Twenty First Century Group, Inc. (government affairs company); and Owner and Chief Executive Officer, Dos Angelos Ranch, L.P. (cattle, hunting, corporate entertainment), Discovery Global Education Fund (non-profit) and Cross Timbers Quail Research Ranch (non-profit)	Administaff
		Formerly: Chief Executive Officer, Texana Timber LP (sustainable forestry company)
Carl Frischling — 1937 Trustee	1993	Partner, law firm of Kramer Levin Naftalis and Frankel LLP	Director, Reich & Tang Funds (16 portfolios)
Prema Mathai-Davis — 1950 Trustee	1998	Retired	None
Lewis F. Pennock — 1942 Trustee	1993	Partner, law firm of Pennock & Cooper	None
Larry Soll — 1942 Trustee	2004	Retired	None
Raymond Stickel, Jr. — 1944 Trustee	2005	Retired Formerly: Director, Mainstay VP Series Funds, Inc. (25 portfolios)	None

1	Mr. Flanagan is considered an interested person of the Trust because he is an officer of the adviser to the Trust, and an officer and a director of Invesco Ltd., ultimate parent of the adviser to the Trust.
2	Mr. Taylor is considered an interested person of the Trust because he is an officer and a director of the adviser to, and a director of the principal underwriter of, the Trust.

 T-1

Trustees and Officers – (continued)

	Trustee and/
Name, Year of Birth and	or Officer	Principal Occupation(s)	Other Directorship(s)
Position(s) Held with the Trust	Since	During Past 5 Years	Held by Trustee
Other Officers
Russell C. Burk — 1958 Senior Vice President and Senior Officer	2005	Senior Vice President and Senior Officer of The AIM Family of Funds®	N/A
John M. Zerr — 1962 Senior Vice President, Chief Legal Officer and Secretary	2006	Director, Senior Vice President, Secretary and General Counsel, Invesco Aim Management Group, Inc., Senior Vice President, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Director, Senior Vice President and Secretary, Invesco Aim Distributors, Inc.; Director, Vice President and Secretary, Invesco Aim Investment Services, Inc. and INVESCO Distributors, Inc.; Director and Vice President, INVESCO Funds Group, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The AIM Family of Funds®; and Manager, Invesco PowerShares Capital Management LLC	N/A
		Formerly: Director, Senior Vice President, General Counsel and Secretary, Invesco Aim Advisors, Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco Aim Capital Management, Inc.; Chief Operating Officer and General Counsel, Liberty Ridge Capital, Inc. (an investment adviser); Vice President and Secretary, PBHG Funds (an investment company) and PBHG Insurance Series Fund (an investment company); Chief Operating Officer, General Counsel and Secretary, Old Mutual Investment Partners (a broker-dealer); General Counsel and Secretary, Old Mutual Fund Services (an administrator) and Old Mutual Shareholder Services (a shareholder servicing center); Executive Vice President, General Counsel and Secretary, Old Mutual Capital, Inc. (an investment adviser); and Vice President and Secretary, Old Mutual Advisors Funds (an investment company)
Lisa O. Brinkley — 1959 Vice President	2004	Global Compliance Director, Invesco Ltd.; Chief Compliance Officer, Invesco Aim Distributors, Inc. and Invesco Aim Investment Services, Inc.; and Vice President, The AIM Family of Funds®	N/A
		Formerly: Senior Vice President, Invesco Aim Management Group, Inc.; Senior Vice President and Chief Compliance Officer, Invesco Aim Advisors, Inc. and The AIM Family of Funds®; Vice President and Chief Compliance Officer, Invesco Aim Capital Management, Inc. and Invesco Aim Distributors, Inc.; Vice President, Invesco Aim Investment Services, Inc. and Fund Management Company
Kevin M. Carome — 1956 Vice President	2003	General Counsel, Secretary and Senior Managing Director, Invesco Ltd.; Director, Invesco Holding Company Limited and INVESCO Funds Group, Inc.; Director and Executive Vice President, IVZ, Inc., Invesco Group Services, Inc., Invesco North American Holdings, Inc. and Invesco Investments (Bermuda) Ltd.; Director and Secretary, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); and Vice President, The AIM Family of Funds®	N/A
		Formerly: Senior Managing Director and Secretary, Invesco North American Holdings, Inc.; Vice President and Secretary, IVZ, Inc. and Invesco Group Services, Inc.; Senior Managing Director and Secretary, Invesco Holding Company Limited; Director, Senior Vice President, Secretary and General Counsel, Invesco Aim Management Group, Inc. and Invesco Aim Advisors, Inc.; Senior Vice President, Invesco Aim Distributors, Inc.; Director, General Counsel and Vice President, Fund Management Company; Vice President, Invesco Aim Capital Management, Inc. and Invesco Aim Investment Services, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The AIM Family of Funds®; Director and Vice President, INVESCO Distributors, Inc.; and Chief Executive Officer and President, INVESCO Funds Group, Inc.
Sheri Morris — 1964 Vice President, Treasurer and Principal Financial Officer	1999	Vice President, Treasurer and Principal Financial Officer, The AIM Family of Funds®; and Vice President, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.) Formerly: Vice President, Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.; Assistant Vice President and Assistant Treasurer, The AIM Family of Funds® and Assistant Vice President, Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A
Karen Dunn Kelley — 1960 Vice President	1993	Head of Invesco’s World Wide Fixed Income and Cash Management Group; Senior Vice President, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Executive Vice President, Invesco Aim Distributors, Inc.; Senior Vice President, Invesco Aim Management Group, Inc.; and Director, Invesco Mortgage Capital Inc.; Vice President, The AIM Family of Funds® (other than AIM Treasurer’s Series Trust and Short-Term Investments Trust); and President and Principal Executive Officer, The AIM Family of Funds® (AIM Treasurer’s Series Trust and Short-Term Investments Trust only)	N/A
		Formerly: Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Director of Cash Management and Senior Vice President, Invesco Aim Advisors, Inc. and Invesco Aim Capital Management, Inc.; President and Principal Executive Officer, Tax-Free Investments Trust; Director and President, Fund Management Company; Chief Cash Management Officer, Director of Cash Management, Senior Vice President, and Managing Director, Invesco Aim Capital Management, Inc.; Director of Cash Management, Senior Vice President, and Vice President, Invesco Aim Advisors, Inc. and The AIM Family of Funds® (AIM Treasurer’s Series Trust, Short-Term Investments Trust and Tax-Free Investments Trust only)
Lance A. Rejsek — 1967 Anti-Money Laundering Compliance Officer	2005	Anti-Money Laundering Compliance Officer, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Invesco Aim Distributors, Inc., Invesco Aim Investment Services, Inc., and The AIM Family of Funds®	N/A
		Formerly: Anti-Money Laundering Compliance Officer, Fund Management Company, Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.
Todd L. Spillane — 1958 Chief Compliance Officer	2006	Senior Vice President, Invesco Aim Management Group, Inc.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Chief Compliance Officer, The AIM Family of Funds®, INVESCO Private Capital Investments, Inc. (holding company), Invesco Private Capital, Inc. (registered investment adviser) and Invesco Senior Secured Management, Inc. (registered investment adviser); Vice President, Invesco Aim Distributors, Inc. and Invesco Aim Investment Services, Inc.	N/A
		Formerly: Senior Vice President and Chief Compliance Officer, Invesco Aim Advisors, Inc. and Invesco Aim Capital Management, Inc.; Chief Compliance Officer, Invesco Global Asset Management (N.A.), Inc.; Vice President, Invesco Aim Capital Management, Inc. and Fund Management Company

The Statement of Additional Information of the Trust includes additional information about the Fund’s Trustees and is available upon request, without charge, by calling 1.800.959.4246. Please refer to the Fund’s prospectus for information on the Fund’s sub-advisers.

Office of the Fund	Investment Adviser	Distributor	Auditors
11 Greenway Plaza, Suite 100	Invesco Advisers, Inc.	Invesco Aim Distributors, Inc.	PricewaterhouseCoopers LLP
Houston, TX 77046-1173	1555 Peachtree Street, N.E.	11 Greenway Plaza, Suite 100	1201 Louisiana Street, Suite 2900
	Atlanta, GA 30309	Houston, TX 77046-1173	Houston, TX 77002-5678
Counsel to the Fund	Counsel to the	Transfer Agent	Custodian
Stradley Ronon Stevens & Young, LLP	Independent Trustees	Invesco Aim Investment Services, Inc.	State Street Bank and Trust Company
2600 One Commerce Square	Kramer, Levin, Naftalis & Frankel LLP	P.O. Box 4739	225 Franklin
Philadelphia, PA 19103	1177 Avenue of the Americas	Houston, TX 77210-4739	Boston, MA 02110-2801
	New York, NY 10036-2714

T-2

AIM V.I. Large Cap Growth Fund
Annual Report to Shareholders n December 31, 2009

The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter-ends. For the second and fourth quarters, the lists appear in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The Fund’s Form N-Q filings are available on the SEC website, sec.gov. Copies of the Fund’s Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers for the Fund are 811-07452 and 033-57340. The Fund’s most recent portfolio holdings, as filed on Form N-Q, have also been made available to insurance companies issuing variable annuity contracts and variable life insurance policies (“variable products”) that invest in the Fund.

A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, from our Client Services department at 800 410 4246 or on the Invesco Aim website, invescoaim.com. On the home page, scroll down and click on Proxy Policy. The information is also available on the SEC website, sec.gov.

Information regarding how the Fund voted proxies related to its portfolio securities during the 12 months ended June 30, 2009, is available at our website, invescoaim.com. Click the About Us tab at the top of the home page; click Legal Information; and then click Proxy Voting Search. The information is also available on the SEC website, sec.gov.

Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Aim Distributors, Inc. is the U.S. distributor for Invesco Ltd.’s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd.

This report must be accompanied or preceded by a currently effective Fund prospectus and variable product prospectus, which contain more complete information, including sales charges and expenses. Investors should read each carefully before investing.

Invesco Aim Distributors, Inc.

NOT FDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEE

Management’s Discussion of Fund Performance

Performance summary

For the 12 months ended December 31, 2009, AIM V.I. Large Cap Growth Fund had double-digit positive returns but underperformed the Fund’s style-specific index, the Russell 1000 Growth Index. Much of the Fund’s underperformance was due to a more defensive position at the market inflection point as well as stock selection across sectors.

The Fund performed in line with its broad market index, the S&P 500 Index. Your Fund’s long-term performance appears later in this report.

Fund vs. Indexes

Total returns, 12/31/08 to 12/31/09, excluding variable product issuer charges.

If variable product issuer charges were included, returns would be lower.

Series I Shares*	25.99	%
Series II Shares*	25.68
S&P 500 Index6 (Broad Market Index)	26.47
Russell 1000 Growth Index6 (Style-Specific Index)	37.21
Lipper VUF Large-Cap Growth Funds Index6 (Peer Group Index)	37.73

6	Lipper Inc.
*	Performance includes litigation proceeds. Had these proceeds not been received, total return would have been lower.

How we invest

We believe a growth investment strategy is an essential component of a diversified portfolio.

     We seek to identify large-cap companies with the potential to meet or exceed consensus earnings estimates and that generate sustainable growth. To accomplish this goal, we utilize a rules-based approach that balances proprietary quantitative analysis with rigorous fundamental analysis. We also incorporate a proprietary sell model that seeks to identify and eliminate stocks at high risk of underperformance.

     Our quantitative model ranks companies based on a set of fundamental, valuation and timeliness factors. This model provides an objective approach to identifying new investment opportunities. We focus our fundamental analysis on the top 20% of the quantitative model.

     Our fundamental analysis seeks to determine the company’s drivers of earnings. To accomplish this goal, we examine financial statements to gain a critical understanding of growth drivers, allowing us to quantify earnings power. We analyze industry trends, growth rates, the competitive landscape and the quality of management. We also closely analyze valuation levels to help reduce the risk of holding highly priced stocks and to determine the potential for capital appreciation.

     Portfolio construction plays an important role in risk management. While sector overweights and underweights are driven by our investment process, we cap the Fund’s maximum sector overweight at 1,000 basis points (10 percentage points) versus the Russell 1000 Growth Index sectors. We seek to manage stock-specific risk by building a diversified portfolio of typically 50 to 80 stocks.

     Our sell process is designed to avoid “high risk” situations we believe lead to underperformance. Examples of “high risk” situations include:

§	Deteriorating business prospects
§	Negative changes to our investment thesis
§	Sell model signals

Market conditions and your Fund

The fiscal year was truly a tale of two markets. During the first two months of the fiscal year, equity markets experienced steep declines as severe problems in credit markets, a rapidly weakening housing market, rising energy and food prices and a deteriorating outlook for corporate earnings led to a global economic recession. However, equity markets rapidly reversed direction beginning in March 2009 and rallied solidly through most of the remaining months in the fiscal year.

     In this environment, indexes measuring the performance of large-, mid- and small-cap stocks all had positive returns, with mid-cap stocks generally outperforming large- and small-cap stocks.¹ In terms of investment style, growth stocks generally outperformed value stocks.¹ The sectors with the highest returns in the broad market, as represented by the S&P 500 Index, included economically sensitive sectors such as information technology (IT), materials and consumer discretionary.¹

     The Fund underperformed the Russell 1000 Growth Index for the year. During the market decline of the first three months of the year, the Fund benefited from a more defensive posture, with overweight positions in less economically sensitive sectors such as health care and underweight positions in more economically sensitive sectors such as consumer discretionary, energy and materials. Additionally, within sectors, the Fund benefited from higher exposure to less cyclical holdings.

     The Fund began to underperform the Russell 1000 Growth Index when equity markets hit a bottom and began to rebound in March 2009. It is important to note that while our investment process may temporarily underperform our peers at market inflection points, our goal is to outperform over a full market cycle. This temporary underperformance typically occurs because we wait for clear data points that earnings growth is achievable before moving into new stocks.

Portfolio Composition
By sector

Information Technology		40.4	%
Health Care		15.9
Industrials		10.9
Consumer Discretionary		10.0
Energy		8.7
Materials		7.5
Financials		4.4
Consumer Staples		1.0
Telecommunication Services		0.9
Money Market Funds Plus Other Assets Less Liabilities		0.3
Top 10 Equity Holdings*
1. Apple Inc.		6.0	%
2. BHP Billiton Ltd.-ADR		4.5
3. Hewlett-Packard Co.		3.6
4. Occidental Petroleum Corp.		3.3
5. Microsoft Corp.		2.8
6. Amgen Inc.		2.8
7. International Business Machines Corp.		2.7
8. Oracle Corp.		2.4
9. Accenture PLC		2.2
10. Goldman Sachs Group, Inc. (The)		2.2
Total Net Assets	$68.5 million
Total Number of Holdings*		61

The Fund’s holdings are subject to change, and there is no assurance that the Fund will continue to hold any particular security.

* Excluding money market fund holdings.

AIM V.I. Large Cap Growth Fund

     Fund underperformance was driven primarily by two factors. First, much of the Fund’s underperformance was driven by its defensive posture both within and across sectors, as more economically sensitive stocks outperformed following the March low. Second, the Fund under-performed because it did not own many of the lower quality, highly leveraged companies that outperformed during the market rebound. Our investment approach specifically avoids companies with these traits because over the long-term they tend to perform poorly.

     Over the course of the year, the Fund underperformed by the widest margin in the consumer discretionary sector, primarily due to stock selection. Much of the Fund’s underperformance was because it did not own many of the lower quality companies that performed strongly during the stock market rebound. For-profit education services provider Apollo Group was a key detractor from Fund performance. This holding had weak performance due to heightened regulatory scrutiny. Additionally, the stock was negatively affected as investors rotated into more economically sensitive holdings during the market rebound.

     The Fund also underperformed the Russell 1000 Growth Index in the industrials sector. Within this sector, underperformance was driven by stock selection and an overweight position, especially in the aerospace and defense industry. While many aerospace and defense companies held up well during the market downturn, they generally underperformed as investors rotated into more cyclical holdings during the market rally. Examples of holdings that detracted from Fund performance included defense contractors Raytheon and Lockheed Martin. We sold the Fund’s position in these holdings due to deteriorating fundamentals.

     Underperformance in the health care and financials sectors was primarily due to stock selection. Examples of holdings that detracted from performance in these sectors were insurance provider Aon and pharmaceutical maker Gilead Sciences. We sold our position in Aon during the year.

     One other area of weakness was the IT sector. Within this sector, stock selection was the primary driver of underperformance. Similar to what happened in the consumer discretionary sector, much of the Fund’s underperformance in this sector was because the Fund did not have exposure to many of the lower quality technology companies that performed strongly during the stock market rebound. Despite underperforming in this sector, four out of five of the Fund’s top contributors to performance during the reporting period were information technology holdings: Apple, Hewlett-Packard, Microsoft and International Business Machines.

     Some of this underperformance was offset by outperformance in other sectors, including consumer staples and materials. The Fund outperformed the Russell 1000 Growth Index by the widest margin in the consumer staples sector, driven largely by an underweight position. Outperformance in the materials sector was driven by stock selection as the Fund’s holdings generally outperformed those of the Russell 1000 Growth Index during the reporting period.

     We began to reposition the portfolio in April and May 2009, by moving into more economically sensitive holdings as our quantitative and fundamental research provided clear evidence that such companies had the potential for sustainable earnings growth in a more stable and improving economy. This repositioning included a reduction in the defensive health care and consumer staples sectors. We rotated into economically sensitive sectors including IT, consumer discretionary, financials and materials.

     As we’ve discussed, the stock market experienced considerable volatility during the year. While our investment process may temporarily underperform at market inflection points, the goal of our disciplined investment process is to provide consistent performance and outperform over a full market cycle. We would like to caution investors against making investment decisions based on short-term performance. As always, we recommend that you consult a financial adviser to discuss your individual financial program.

     We thank you for your commitment to AIM V.I. Large Cap Growth Fund.

1 Lipper Inc.

The views and opinions expressed in management’s discussion of Fund performance are those of Invesco Advisers, Inc. These views and opinions are subject to change at any time based on factors such as market and economic conditions. These views and opinions may not be relied upon as investment advice or recommendations, or as 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 Invesco Advisers, Inc. 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.

See important Fund and index disclosures later in this report.

Geoffrey Keeling

Chartered Financial Analyst, senior portfolio manager, is co-manager of AIM V.I. Large Cap Growth Fund. He joined Invesco Aim in 1995. Mr. Keeling earned a B.B.A. degree in finance from The University of Texas at Austin.

Robert Shoss

Senior portfolio manager, is co-manager of AIM V.I. Large Cap Growth Fund. He joined Invesco Aim in 1995. Mr. Shoss earned a B.A. from The University of Texas at Austin and an M.B.A. and a J.D. from the University of Houston.

Assisted by the Large/Multi-Cap Growth Team

AIM V.I. Large Cap Growth Fund

Your Fund’s Long-Term Performance

Results of a $10,000 Investment — Oldest Share Classes since Inception
Fund data from 8/29/03, index data from 8/31/03

1 Lipper Inc.

Past performance cannot guarantee comparable future results.

     This chart, which is a logarithmic chart, presents the fluctuations in the value of the Fund and its indexes. We believe that a logarithmic chart is more effective than other types of charts in illustrating changes in value during the early years shown in the chart. The vertical axis, the one that indicates the dollar value of an investment, is constructed with each segment representing a percent change in the value of the investment. In this chart, each segment represents a doubling, or 100% change, in the value of the investment. In other words, the space between $5,000 and $10,000 is the same size as the space between $10,000 and $20,000.

Average Annual Total Returns
As of 12/31/09

Series I Shares
Inception (8/29/03)	3.47	%
5 Years	0.84
1 Year	25.99
Series II Shares
Inception (8/29/03)	3.25	%
5 Years	0.61
1 Year	25.68

Performance includes litigation proceeds. Had these proceeds not been received, total return would have been lower.

The performance of the Fund’s Series I and Series II share classes will differ primarily due to different class expenses.

     The performance data quoted represent past performance and cannot guarantee comparable future results; current performance may be lower or higher. Please contact your variable product issuer or financial adviser for the most recent month-end variable product performance. Performance figures reflect Fund expenses, reinvested distributions and changes in net asset value. Investment return and principal value will fluctuate so that you may have a gain or loss when you sell shares.

     The net annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 1.01% and 1.26%, respectively.^1,2 The total annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 1.10% and 1.35%, respectively. The expense ratios presented above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

     AIM V.I. Large Cap Growth Fund, a series portfolio of AIM Variable Insurance Funds, is currently offered through insurance companies issuing variable products. You cannot purchase shares of the Fund directly. Performance figures given represent the Fund and are not intended to reflect actual variable product values. They do not reflect sales charges, expenses and fees assessed in connection with a variable product. Sales charges, expenses and fees, which are determined by the variable product issuers, will vary and will lower the total return.

     The most recent month-end performance data at the Fund level, excluding variable product charges, is available on the Invesco Aim automated information line, 866 702 4402. As mentioned above, for the most recent month-end performance including variable product charges, please contact your variable product issuer or financial adviser.

     Had the adviser not waived fees and/or reimbursed expenses in the past, performance would have been lower.

1 Total annual operating expenses less any contractual fee waivers and/or expense reimbursements by the adviser in effect through at least April 30, 2011. See current prospectus for more information.

2 Total annual operating expenses less any contractual fee waivers and/or expense reimbursements by the adviser in effect through at least June 30, 2010. See current prospectus for more information.

AIM V.I. Large Cap Growth Fund

AIM V.I. Large Cap Growth Fund’s investment objective is long-term growth of capital.

§ Unless otherwise stated, information presented in this report is as of December 31, 2009, and is based on total net assets.

§ Unless otherwise noted, all data provided by Invesco.

Principal risks of investing in the Fund

Prices of equity securities change in response to many factors, including the historical and prospective earnings of the issuer, the value of its assets, general economic conditions, interest rates, investor perceptions and market liquidity.

     Foreign securities have additional risks, including exchange rate changes, political and economic upheaval, relative lack of information, relatively low market liquidity, and the potential lack of strict financial and accounting controls and standards.

     There is no guarantee that the investment techniques and risk analysis used by the Fund’s portfolio managers will produce the desired results.

     The prices of securities held by the Fund may decline in response to market risks.

     Since a large percentage of the Fund’s assets may be invested in securities of a limited number of companies, each investment has a greater effect on the Fund’s overall performance, and any change in the value of those securities could significantly affect the value of your investment in the Fund.

About indexes used in this report

The S&P 500^® Index is an unmanaged index considered representative of the U.S. stock market.

     The Russell 1000^® Growth Index is an unmanaged index considered representative of large-cap growth stocks. The Russell 1000 Growth Index is a trademark/service mark of the Frank Russell Co. Russell^® is a trademark of the Frank Russell Co.

     The Lipper VUF Large-Cap Growth Funds Index is an unmanaged index considered representative of large-cap growth variable insurance underlying funds tracked by Lipper.

     The Fund is not managed to track the performance of any particular index, including the indexes defined here, and consequently, the performance of the Fund may deviate significantly from the performance of the indexes.

     A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group reflects fund expenses; performance of a market index does not.

Other information

The Chartered Financial Analyst^® (CFA^®) designation is globally recognized and attests to a charterholder’s success in a rigorous and comprehensive study program in the field of investment management and research analysis.

     The returns shown in management’s discussion of Fund performance are based on net asset values calculated for shareholder transactions. Generally accepted accounting principles require adjustments to be made to the net assets of the Fund at period end for financial reporting purposes, and as such, the net asset values for shareholder transactions and the returns based on those net asset values may differ from the net asset values and returns reported in the Financial Highlights. Additionally, the returns and net asset values shown throughout this report are at the Fund level only and do not include variable product issuer charges. If such charges were included, the total returns would be lower.

     Industry classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s.

AIM V.I. Large Cap Growth Fund

Schedule of Investments^(a)

December 31, 2009

	Shares		Value
Common Stocks & Other Equity Interests–99.65%
Aerospace & Defense–2.46%
Goodrich Corp.		13,144	$	844,502
United Technologies Corp.		12,077		838,265
				1,682,767
Apparel Retail–3.91%
Gap, Inc. (The)		35,876		751,602
Limited Brands, Inc.		50,456		970,774
Ross Stores, Inc.		22,337		954,013
				2,676,389
Asset Management & Custody Banks–1.20%
BlackRock, Inc.		3,556		825,703
Biotechnology–3.73%
Amgen Inc.(b)		33,567		1,898,885
Gilead Sciences, Inc.(b)		15,166		656,385
				2,555,270
Communications Equipment–1.93%
Cisco Systems, Inc.(b)		55,314		1,324,217
Computer Hardware–12.25%
Apple Inc.(b)		19,330		4,075,924
Hewlett-Packard Co.		47,629		2,453,370
International Business Machines Corp.		14,255		1,865,979
				8,395,273
Computer Storage & Peripherals–3.94%
EMC Corp.(b)		85,959		1,501,704
Western Digital Corp.(b)		27,122		1,197,436
				2,699,140
Construction & Engineering–2.85%
Fluor Corp.		24,561		1,106,228
URS Corp.(b)		19,081		849,486
				1,955,714
Construction, Farm Machinery & Heavy Trucks–1.01%
Joy Global Inc.		13,374		689,965
Data Processing & Outsourced Services–1.34%
MasterCard, Inc.–Class A		3,579		916,152
Department Stores–2.32%
J.C. Penney Co., Inc.		33,469		890,610
Kohl’s Corp.(b)		12,944		698,070
				1,588,680
	Shares
Diversified Metals & Mining–5.58%
BHP Billiton Ltd.–ADR (Australia)(c)		40,706		3,117,265
Rio Tinto PLC–ADR (United Kingdom)		3,286		707,772
				3,825,037
Education Services–1.69%
Apollo Group, Inc.–Class A(b)		19,082		1,155,988
Electrical Components & Equipment–1.04%
Cooper Industries PLC (Ireland)		16,727		713,239
Electronic Manufacturing Services–0.98%
Flextronics International Ltd. (Singapore)(b)		91,930		672,008
Fertilizers & Agricultural Chemicals–1.88%
Syngenta AG (Switzerland)		4,614		1,291,636
General Merchandise Stores–2.09%
Dollar Tree, Inc.(b)		14,391		695,085
Target Corp.		15,187		734,595
				1,429,680
Health Care Distributors–3.22%
AmerisourceBergen Corp.		42,377		1,104,768
McKesson Corp.		17,663		1,103,938
				2,208,706
Health Care Services–3.89%
Express Scripts, Inc.(b)		10,388		898,043
Medco Health Solutions, Inc.(b)		17,417		1,113,120
Quest Diagnostics Inc.		10,898		658,021
				2,669,184
Heavy Electrical Equipment–1.30%
ABB Ltd. (Switzerland)(b)		46,526		888,942
Home Entertainment Software–1.30%
Shanda Interactive Entertainment Ltd.–ADR (China)(b)(c)		16,893		888,741
Integrated Oil & Gas–3.34%
Occidental Petroleum Corp.		28,117		2,287,318
Internet Software & Services–3.10%
Google Inc.–Class A(b)		2,261		1,401,775
NetEase.com Inc.–ADR (China)(b)		19,234		723,390
				2,125,165
Investment Banking & Brokerage–3.17%
Goldman Sachs Group, Inc. (The)		8,949		1,510,949
TD Ameritrade Holding Corp.(b)		34,265		664,056
				2,175,005

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

AIM V.I. Large Cap Growth Fund

	Shares		Value
IT Consulting & Other Services–3.51%
Accenture PLC–Class A (Ireland)		37,053	$	1,537,700
Cognizant Technology Solutions Corp.–Class A(b)		19,227		870,983
				2,408,683
Managed Health Care–2.77%
UnitedHealth Group Inc.		31,235		952,043
WellPoint Inc.(b)		16,225		945,755
				1,897,798
Oil & Gas Drilling–2.06%
Diamond Offshore Drilling, Inc.		7,249		713,446
ENSCO International PLC–ADR (United Kingdom)		17,439		696,514
				1,409,960
Oil & Gas Equipment & Services–3.33%
FMC Technologies, Inc.(b)		17,854		1,032,675
National-Oilwell Varco Inc.		28,383		1,251,407
				2,284,082
Personal Products–1.02%
Estee Lauder Cos. Inc. (The)–Class A		14,512		701,800
Pharmaceuticals–2.27%
Abbott Laboratories		11,737		633,680
Johnson & Johnson		14,329		922,931
				1,556,611
Railroads–2.21%
Norfolk Southern Corp.		14,003		734,037
Union Pacific Corp.		12,252		782,903
				1,516,940
Semiconductors–5.36%
Marvell Technology Group Ltd.(b)		57,618		1,195,574
Taiwan Semiconductor Manufacturing Co. Ltd.–ADR (Taiwan)		60,695		694,351
Texas Instruments Inc.		39,640		1,033,018
Xilinx, Inc.		29,804		746,888
				3,669,831
Systems Software–6.70%
BMC Software, Inc.(b)		25,457		1,020,826
Microsoft Corp.		63,131		1,924,864
Oracle Corp.		67,131		1,647,395
				4,593,085
Wireless Telecommunication Services–0.90%
America Movil S.A.B de C.V.–Series L–ADR (Mexico)		13,107		615,767
Total Common Stocks & Other Equity Interests (Cost $56,045,513)				68,294,476
Money Market Funds–0.57%
Liquid Assets Portfolio–Institutional Class(d)		195,750		195,750
Premier Portfolio–Institutional Class(d)		195,750		195,750
Total Money Market Funds (Cost $391,500)				391,500
TOTAL INVESTMENTS (excluding investments purchased with cash collateral from securities on loan)–100.22% (Cost $56,437,013)				68,685,976
Investments Purchased with Cash Collateral from Securities on Loan
Money Market Funds–1.75%
Liquid Assets Portfolio–Institutional Class (Cost $1,198,990)(d)(e)		1,198,990		1,198,990
TOTAL INVESTMENTS–101.97% (Cost $57,636,003)				69,884,966
OTHER ASSETS LESS LIABILITIES–(1.97)%				(1,353,374	)
NET ASSETS–100.00%			$	68,531,592

Investment Abbreviations:

ADR – American Depositary Receipt

Notes to Schedule of Investments:

(a)	Industry and/or sector classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s.
(b)	Non-income producing security.
(c)	All or a portion of this security was out on loan at December 31, 2009.
(d)	The money market fund and the Fund are affiliated by having the same investment adviser.
(e)	The security has been segregated to satisfy the commitment to return the cash collateral received in securities lending transactions upon the borrower’s return of the securities loaned. See Note 1I.

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

AIM V.I. Large Cap Growth Fund

Statement of Assets and Liabilities

December 31, 2009

Assets:
Investments, at value (Cost $56,045,513)*	$	68,294,476
Investments in affiliated money market funds, at value and cost		1,590,490
Total investments, at value (Cost $57,636,003)		69,884,966
Receivables for:
Dividends		35,066
Investment for trustee deferred compensation and retirement plans		24,389
Total assets		69,944,421
Liabilities:
Payables for:
Fund shares reacquired		97,806
Collateral upon return of securities loaned		1,198,990
Accrued fees to affiliates		49,016
Accrued other operating expenses		31,689
Trustee deferred compensation and retirement plans		35,328
Total liabilities		1,412,829
Net assets applicable to shares outstanding	$	68,531,592
Net assets consist of:
Shares of beneficial interest	$	70,824,852
Undistributed net investment income		256,783
Undistributed net realized gain (loss)		(14,799,580	)
Unrealized appreciation		12,249,537
	$	68,531,592
Net Assets:
Series I	$	67,831,167
Series II	$	700,425
Shares outstanding, $0.001 par value per share, unlimited number of shares authorized:
Series I		5,521,658
Series II		57,457
Series I:
Net asset value per share	$	12.28
Series II:
Net asset value per share	$	12.19

*  At December 31, 2009, securities with an aggregate value of $1,175,972 were on loan to brokers.

Statement of Operations

For the year ended December 31, 2009

Investment income:
Dividends (net of foreign withholding taxes of $10,133)	$	896,026
Dividends from affiliated money market funds (includes securities lending income of $19,755)		32,757
Total investment income		928,783
Expenses:
Advisory fees		443,885
Administrative services fees		203,322
Custodian fees		8,928
Distribution fees — Series II		1,688
Transfer agent fees		9,912
Trustees’ and officers’ fees and benefits		21,920
Professional services fees		37,813
Other		11,254
Total expenses		738,722
Less: Fees waived		(92,589	)
Net expenses		646,133
Net investment income		282,650
Realized and unrealized gain (loss) from:
Net realized gain (loss) from:
Investment securities		(3,087,062	)
Foreign currencies		22,567
		(3,064,495	)
Change in net unrealized appreciation of:
Investment securities		17,627,187
Foreign currencies		749
		17,627,936
Net realized and unrealized gain		14,563,441
Net increase in net assets resulting from operations	$	14,846,091

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

AIM V.I. Large Cap Growth Fund

Statement of Changes in Net Assets

For the years ended December 31, 2009 and 2008

	2009			2008
Operations:
Net investment income	$	282,650		$	221,020
Net realized gain (loss)		(3,064,495	)		(5,322,900	)
Change in net unrealized appreciation (depreciation)		17,627,936			(39,639,682	)
Net increase (decrease) in net assets resulting from operations		14,846,091			(44,741,562	)
Distributions to shareholders from net investment income:
Series I		(225,916	)		(10,393	)
Series II		(60	)		—
Total distributions from net investment income		(225,976	)		(10,393	)
Share transactions–net:
Series I		(9,298,793	)		(22,100,762	)
Series II		(166,783	)		(100,213	)
Net increase (decrease) in net assets resulting from share transactions		(9,465,576	)		(22,200,975	)
Net increase (decrease) in net assets		5,154,539			(66,952,930	)
Net assets:
Beginning of year		63,377,053			130,329,983
End of year (includes undistributed net investment income of $256,783 and $177,543, respectively)	$	68,531,592		$	63,377,053

Notes to Financial Statements

December 31, 2009

NOTE 1—Significant Accounting Policies

AIM V.I. Large Cap Growth Fund (the “Fund”) is a series portfolio of AIM Variable Insurance Funds (the “Trust”). The Trust is a Delaware statutory trust registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end series management investment company consisting of twenty-one separate portfolios, (each constituting a “Fund”). The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Matters affecting each Fund or class will be voted on exclusively by the shareholders of such Fund or class. Current Securities and Exchange Commission (“SEC”) guidance, however, requires participating insurance companies offering separate accounts to vote shares proportionally in accordance with the instructions of the contract owners whose investments are funded by shares of each Fund or class.

  The Fund’s investment objective is long-term growth of capital.

  The Fund currently offers two classes of shares, Series I and Series II, both of which are offered to insurance company separate accounts funding variable annuity contracts and variable life insurance policies (“variable products”).

  The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements.

A.	Security Valuations — Securities, including restricted securities, are valued according to the following policy.
	A security listed or traded on an exchange (except convertible bonds) is valued at its last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales or official closing price on a particular day, the security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based on prices furnished by independent pricing services or market makers. When such securities are valued by an independent pricing service they may be considered fair valued. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean between the last bid and ask prices from the exchange on which they are principally traded. Options not listed on an exchange are valued by an independent source at the mean between the last bid and ask prices. For purposes of determining net asset value per share, futures and option contracts generally are valued 15 minutes after the close of the customary trading session of the New York Stock Exchange (“NYSE”).
	Investments in open-end and closed-end registered investment companies that do not trade on an exchange are valued at the end of day net asset value per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded.
	Debt obligations (including convertible bonds) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution-size trading in similar groups of securities, developments related to specific securities, dividend rate, yield, quality, type of issue, coupon rate,

AIM V.I. Large Cap Growth Fund

	maturity, individual trading characteristics and other market data. Short-term obligations, including commercial paper, having 60 days or less to maturity are recorded at amortized cost which approximates value. Debt securities are subject to interest rate and credit risks. In addition, all debt securities involve some risk of default with respect to interest and/or principal payments.
	Foreign securities (including foreign exchange contracts) are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the NYSE. If market quotations are available and reliable for foreign exchange traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that are significant and make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economical upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
	Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities and Corporate Loans. The mean between the last bid and asked prices may be used to value debt obligations other than Corporate Loans.
	Securities for which market quotations are not readily available or are unreliable are valued at fair value as determined in good faith by or under the supervision of the Trust’s officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a security’s fair value.
	Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
B.	Securities Transactions and Investment Income — Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income is recorded on the accrual basis from settlement date. Dividend income is recorded on the ex-dividend date.
	The Fund may periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain/loss for investments no longer held and as unrealized gain/loss for investments still held.
	Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the realized and unrealized net gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the Fund’s net asset value and, accordingly, they reduce the Fund’s total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in the Statement of Operations and Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the adviser.
	The Fund allocates income and realized and unrealized capital gains and losses to a class based on the relative net assets of each class.
C.	Country Determination — For the purposes of making investment selection decisions and presentation in the Schedule of Investments, the investment adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuer’s securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted.
D.	Distributions — Distributions from income and net realized capital gain, if any, are generally paid to separate accounts of participating insurance companies annually and recorded on ex-dividend date.
E.	Federal Income Taxes — The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code necessary to qualify as a regulated investment company and to distribute substantially all of the Fund’s taxable earnings to shareholders. As such, the Fund will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements.
	The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.
F.	Expenses — Fees provided for under the Rule 12b-1 plan of a particular class of the Fund and which are directly attributable to that class are charged to the operations of such class. All other expenses are allocated among the classes based on relative net assets.
G.	Accounting Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual

AIM V.I. Large Cap Growth Fund

	results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print, which is generally 45 days from the period-end date.
H.	Indemnifications — Under the Trust’s organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Fund’s servicing agreements, that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote.
I.	Securities Lending — The Fund may lend portfolio securities having a market value up to one-third of the Fund’s total assets. Such loans are secured by collateral equal to no less than the market value of the loaned securities determined daily by the securities lending provider. Such collateral will be cash or debt securities issued or guaranteed by the U.S. Government or any of its sponsored agencies. Cash collateral received in connection with these loans is invested in short-term money market instruments or affiliated money market funds and is shown as such on the Schedule of Investments. It is the Fund’s policy to obtain additional collateral from or return excess collateral to the borrower by the end of the next business day, following the valuation date of the securities loaned. Therefore, the value of the collateral held may be temporarily less than the value of the securities on loan. Lending securities entails a risk of loss to the Fund if and to the extent that the market value of the securities loaned were to increase and the borrower did not increase the collateral accordingly, and the borrower fails to return the securities. Upon the failure of the borrower to return the securities, collateral may be liquidated and the securities may be purchased on the open market to replace the loaned securities. The Fund could experience delays and costs in gaining access to the collateral. The Fund bears the risk of any deficiency in the amount of the collateral available for return to the borrower due to any loss on the collateral invested. Dividends received on cash collateral investments for securities lending transactions, which are net of compensation to counterparties, is included in Dividends from affiliates on the Statement of Operations. The aggregate value of securities out on loan is shown as a footnote on the Statement of Assets and Liabilities, if any.
J.	Foreign Currency Translations — Foreign currency is valued at the close of the NYSE based on quotations posted by banks and major currency dealers. Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at date of valuation. Purchases and sales of portfolio securities (net of foreign taxes withheld on disposition) and income items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. The Fund does not separately account for the portion of the results of operations resulting from changes in foreign exchange rates on investments and the fluctuations arising from changes in market prices of securities held. The combined results of changes in foreign exchange rates and the fluctuation of market prices on investments (net of estimated foreign tax withholding) are included with the net realized and unrealized gain or loss from investments in the Statement of Operations. Reported net realized foreign currency gains or losses arise from (i) sales of foreign currencies, (ii) currency gains or losses realized between the trade and settlement dates on securities transactions, and (iii) the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign currency gains and losses arise from changes in the fair values of assets and liabilities, other than investments in securities at fiscal period end, resulting from changes in exchange rates.
	The Fund may invest in foreign securities which may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable.
K.	Foreign Currency Contracts — The Fund may enter into foreign currency contracts to manage or minimize currency or exchange rate risk. The Fund may also enter into foreign currency contracts for the purchase or sale of a security denominated in a foreign currency in order to “lock in” the U.S. dollar price of that security. A foreign currency contract is an obligation to purchase or sell a specific currency for an agreed-upon price at a future date. The use of foreign currency contracts does not eliminate fluctuations in the price of the underlying securities the Fund owns or intends to acquire but establishes a rate of exchange in advance. Fluctuations in the value of these contracts are measured by the difference in the contract date and reporting date exchange rates and are recorded as unrealized appreciation (depreciation) until the contracts are closed. When the contracts are closed, realized gains (losses) are recorded. Realized and unrealized gains (losses) on the contracts are included in the Statement of Operations. The primary risks associated with foreign currency contracts include failure of the counterparty to meet the terms of the contract and the value of the foreign currency changing unfavorably. These risks may be in excess of the amounts reflected in the Statement of Assets and Liabilities.

NOTE 2—Advisory Fees and Other Fees Paid to Affiliates

The Trust has entered into a master investment advisory agreement with Invesco Advisers, Inc. (the “Adviser” or “Invesco”). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Adviser based on the annual rate of the Fund’s average daily net assets as follows:

Average Net Assets	Rate
First $250 million		0	.695%
Next $250 million		0	.67%
Next $500 million		0	.645%
Next $1.5 billion		0	.62%
Next $2.5 billion		0	.595%
Next $2.5 billion		0	.57%
Next $2.5 billion		0	.545%
Over $10 billion		0	.52%

AIM V.I. Large Cap Growth Fund

  Under the terms of a master sub-advisory agreement approved by shareholders of the Funds between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Trimark Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Funds, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide discretionary investment management services to each Fund based on the percentage of assets allocated to such Sub-Adviser(s).

  On December 31, 2009, Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc., Invesco Private Asset Management, Inc. and Invesco Global Asset Management (N.A.), Inc. merged into Invesco Institutional (N.A.), Inc. and the consolidated adviser firm was renamed Invesco Advisers, Inc.

  The Adviser has contractually agreed to waive advisory fees and/or reimburse expenses of all shares to the extent necessary to limit total annual fund operating expenses after fee waiver (excluding certain items discussed below) of Series I shares to 1.01% and Series II shares to 1.26% of average daily net assets, through at least April 30, 2011. In determining the Adviser’s obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the total annual fund operating expenses after fee waiver to exceed the numbers reflected above: (1) interest; (2) taxes; (3) dividend expense on short sales; (4) extraordinary items or non-routine items; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. The Board of Trustees or Invesco may terminate the fee waiver arrangement at any time. The Adviser did not waive fees and/or reimburse expenses during the period under this expense limitation.

  Further, the Adviser has contractually agreed, through at least June 30, 2010, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash in such affiliated money market funds.

  For the year ended December 31, 2009, the Adviser waived advisory fees of $92,589.

  At the request of the Trustees of the Trust, Invesco Ltd. agreed to reimburse expenses incurred by the Fund in connection with market timing matters in the AIM Funds, which may include legal, audit, shareholder reporting, communications and trustee expenses. For the year ended December 31, 2009, Invesco Ltd. did not reimburse any expenses.

  The Trust has entered into a master administrative services agreement with Invesco pursuant to which the Fund has agreed to pay Invesco a fee for costs incurred in providing accounting services and fund administrative services to the Fund and to reimburse Invesco for administrative services fees paid to insurance companies that have agreed to provide services to the participants of separate accounts. These administrative services provided by the insurance companies may include, among other things: the printing of prospectuses, financial reports and proxy statements and the delivery of the same to existing participants; the maintenance of master accounts; the facilitation of purchases and redemptions requested by the participants; and the servicing of participants’ accounts. Pursuant to such agreement, for the year ended December 31, 2009, Invesco was paid $50,000 for accounting and fund administrative services and reimbursed $153,322 for services provided by insurance companies.

  The Trust has entered into a transfer agency and service agreement with Invesco Aim Investment Services, Inc. (“IAIS”) pursuant to which the Fund has agreed to pay IAIS a fee for providing transfer agency and shareholder services to the Fund and reimburse IAIS for certain expenses incurred by IAIS in the course of providing such services. For the year ended December 31, 2009, expenses incurred under the agreement are shown in the Statement of Operations as transfer agent fees.

  The Trust has entered into a master distribution agreement with Invesco Aim Distributors, Inc. (“IADI”) to serve as the distributor for the Fund. The Trust has adopted a plan pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund’s Series II shares (the “Plan”). The Fund, pursuant to the Plan, pays IADI compensation at the annual rate of 0.25% of the Fund’s average daily net assets of Series II shares. Of the Plan payments, up to 0.25% of the average daily net assets of the Series II shares may be paid to insurance companies who furnish continuing personal shareholder services to customers who purchase and own Series II shares of the Fund. For the year ended December 31, 2009, expenses incurred under the Plan are detailed in the Statement of Operations as distribution fees.

  Certain officers and trustees of the Trust are officers and directors of Invesco, IAIS and/or IADI.

NOTE 3—Additional Valuation Information

Generally Accepted Accounting Principles (“GAAP”) defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3) generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment’s assigned level:

Level 1 —	Prices are determined using quoted prices in an active market for identical assets.
Level 2 —	Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk and others.
Level 3 —	Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information.

AIM V.I. Large Cap Growth Fund

  The following is a summary of the tiered valuation input levels, as of December 31, 2009. The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.

	Level 1		Level 2		Level 3		Total
Equity Securities	$	67,704,388	$	2,180,578	$	—	$	69,884,966

NOTE 4—Security Transactions with Affiliated Funds

The Fund is permitted to purchase or sell securities from or to certain other AIM Funds under specified conditions outlined in procedures adopted by the Board of Trustees of the Trust. The procedures have been designed to ensure that any purchase or sale of securities by the Fund from or to another fund or portfolio that is or could be considered an affiliate by virtue of having a common investment adviser (or affiliated investment advisers), common Trustees and/or common officers complies with Rule 17a-7 of the 1940 Act. Further, as defined under the procedures, each transaction is effected at the current market price. Pursuant to these procedures, for the year ended December 31, 2009, the Fund engaged in securities purchases of $227,457.

NOTE 5—Trustees’ and Officers’ Fees and Benefits

“Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and “Trustees’ and Officers’ Fees and Benefits” also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various AIM Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees are eligible to participate in a retirement plan that provides for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former Trustees who also participate in a retirement plan and receive benefits under such plan. “Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund.

  During the year ended December 31, 2009, the Fund paid legal fees of $2,915 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A member of that firm is a Trustee of the Trust.

NOTE 6—Cash Balances

The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with The State Street Bank and Trust Company, the custodian bank. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (i) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (ii) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.

NOTE 7—Distributions to Shareholders and Tax Components of Net Assets

Tax Character of Distributions to Shareholders Paid During the Years Ended December 31, 2009 and 2008:

	2009		2008
Ordinary income	$	225,976	$	10,393

Tax Components of Net Assets at Period-End:

	2009
Undistributed ordinary income	$	293,980
Net unrealized appreciation — investments		11,381,295
Net unrealized appreciation — other investments		574
Temporary book/tax differences		(37,197	)
Capital loss carryforward		(13,931,912	)
Shares of beneficial interest		70,824,852
Total net assets	$	68,531,592

  The difference between book-basis and tax-basis unrealized appreciation (depreciation) is due to differences in the timing of recognition of gains and losses on investments for tax and book purposes. The Fund’s net unrealized appreciation difference is attributable primarily to wash sales.

  The temporary book/tax differences are a result of timing differences between book and tax recognition of income and/or expenses. The Fund’s temporary book/tax differences are the result of the trustee deferral of compensation and retirement plan benefits.

  Capital loss carryforward is calculated and reported as of a specific date. Results of transactions and other activity after that date may affect the amount of capital loss carryforward actually available for the Fund to utilize. The ability to utilize capital loss carryforward in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions. Under these limitation rules, the Fund is limited to utilizing $13,931,912 of capital loss carryforward in the fiscal year ending December 31, 2010.

AIM V.I. Large Cap Growth Fund

  The Fund has a capital loss carryforward as of December 31, 2009 which expires as follows:

	Capital Loss
Expiration	Carryforward*
December 31, 2010	$	3,544,700
December 31, 2013		10,283
December 31, 2014		1,757,332
December 31, 2016		3,185,835
December 31, 2017		5,433,762
Total capital loss carryforward	$	13,931,912

*  Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code.

NOTE 8—Investment Securities

The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the year ended December 31, 2009 was $35,610,400 and $42,563,872, respectively. Cost of investments on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed Federal income tax reporting period-end.

Unrealized Appreciation (Depreciation) of Investment Securities on a Tax Basis
Aggregate unrealized appreciation of investment securities	$	13,360,318
Aggregate unrealized (depreciation) of investment securities		(1,979,023	)
Net unrealized appreciation of investment securities	$	11,381,295
Cost of investments for tax purposes is $58,503,671.

NOTE 9—Reclassification of Permanent Differences

Primarily as a result of differing book/tax treatment of foreign currency transactions and expired capital loss carryforward, on December 31, 2009, undistributed net investment income was increased by $22,566, undistributed net realized gain (loss) was increased by $3,404,529 and shares of beneficial interest decreased by $3,427,095. This reclassification had no effect on the net assets of the Fund.

NOTE 10—Share Information

	Summary of Share Activity
	Year ended December 31,
	2009(a)						2008
	Shares			Amount			Shares			Amount
Sold:
Series I		1,174,128		$	11,561,836			671,040		$	8,675,551
Series II		143			1,375			6,894			71,952
Issued as reinvestment of dividends:
Series I		19,033			225,916			1,089			10,393
Series II		5			60			—			—
Reacquired:
Series I		(2,077,325	)		(21,086,545	)		(2,408,114	)		(30,786,706	)
Series II		(16,099	)		(168,218	)		(13,392	)		(172,165	)
Net increase (decrease) in share activity		(900,115	)	$	(9,465,576	)		(1,742,483	)	$	(22,200,975	)

^(a) There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 89% of the outstanding shares of the Fund. The Fund and the Fund’s principal underwriter or adviser, are parties to participation agreements with these entities whereby these entities sell units of interest in separate accounts funding variable products that are invested in the Fund. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as, securities brokerage, third party record keeping and account servicing and administrative services. The Trust has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially.

AIM V.I. Large Cap Growth Fund

NOTE 11—Financial Highlights

The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.

																												Ratio of			Ratio of
																												expenses			expenses
						Net gains																						to average			to average net			Ratio of net
	Net asset		Net			(losses) on						Dividends			Distributions													net assets			assets without			investment
	value,		investment			securities (both			Total from			from net			from net						Net asset					Net assets,		with fee waivers			fee waivers			income (loss)
	beginning		income			realized and			investment			investment			realized			Total			value, end		Total			end of period		and/or expenses			and/or expenses			to average			Portfolio
	of period		(loss)			unrealized)			operations			income			gains			Distributions			of period		Return(a)			(000s omitted)		absorbed			absorbed			net assets			turnover(b)
Series I
Year ended 12/31/09	$	9.78	$	0.04	(c)	$	2.50	(d)	$	2.54		$	(0.04	)	$	—		$	(0.04	)	$	12.28		25.99	%(d)	$	67,831		1.01	%(e)		1.15	%(e)		0.44	%(e)		57	%
Year ended 12/31/08		15.85		0.03	(c)		(6.10	)		(6.07	)		(0.00	)		—			(0.00	)		9.78		(38.29	)		62,665		1.01			1.10			0.23			41
Year ended 12/31/07		13.71		0.02			2.13			2.15			(0.01	)		—			(0.01	)		15.85		15.64			129,071		1.01			1.08			0.11			58
Year ended 12/31/06		12.71		0.02			1.00			1.02			(0.02	)		—			(0.02	)		13.71		8.05			120,825		1.02			1.23			0.06			76
Year ended 12/31/05		11.86		(0.01	)(c)		0.88			0.87			—			(0.02	)		(0.02	)		12.71		7.30			4,352		1.13			7.30			(0.06	)		99
Series II
Year ended 12/31/09		9.70		0.02	(c)		2.47	(d)		2.49			(0.00	)		—			(0.00	)		12.19		25.68	(d)		700		1.26	(e)		1.40	(e)		0.19	(e)		57
Year ended 12/31/08		15.75		0.00	(c)		(6.05	)		(6.05	)		—			—			—			9.70		(38.41	)		712		1.26			1.35			(0.02	)		41
Year ended 12/31/07		13.66		(0.04	)		2.13			2.09			—			—			—			15.75		15.30			1,259		1.26			1.33			(0.14	)		58
Year ended 12/31/06		12.67		(0.01	)		1.00			0.99			—			—			—			13.66		7.81			1,949		1.27			1.48			(0.19	)		76
Year ended 12/31/05		11.84		(0.03	)(c)		0.88			0.85			—			(0.02	)		(0.02	)		12.67		7.15			636		1.33			7.55			(0.26	)		99

(a)	Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Total returns do not reflect charges assessed in connection with a variable product, which if included would reduce total returns.
(b)	Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable.
(c)	Calculated using average shares outstanding.
(d)	Includes litigation proceeds received during the period. Had the litigation proceeds not been received, net gains (losses) on securities (both realized and unrealized) per share would have been $2.44 and $2.41 for Series I and Series II shares, respectively and total returns would have been lower.
(e)	Ratios are based on average daily net assets (000’s omitted) of $63,193 and $675 for Series I and Series II shares, respectively.

AIM V.I. Large Cap Growth Fund

Report of Independent Registered Public Accounting Firm

To the Board of Trustees of AIM Variable Insurance Funds

and Shareholders of AIM V.I. Large Cap Growth Fund:

In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of AIM V.I. Large Cap Growth Fund (one of the funds constituting AIM Variable Insurance Funds, hereafter referred to as the “Fund”) at December 31, 2009, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for the each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at December 31, 2009 by correspondence with the custodian, provide a reasonable basis for our opinion.

PRICEWATERHOUSECOOPERS LLP

February 10, 2010

Houston, Texas

AIM V.I. Large Cap Growth Fund

Calculating your ongoing Fund expenses

Example

As a shareholder of the Fund, you incur ongoing costs, including management fees; distribution and/or service fees (12b-1); and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period July 1, 2009 through December 31, 2009.

  The actual and hypothetical expenses in the examples below do not represent the effect of any fees or other expenses assessed in connection with a variable product; if they did, the expenses shown would be higher while the ending account values shown would be lower.

Actual expenses

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

Hypothetical example for comparison purposes

The table below also provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return.

  The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

  Please note that the expenses shown in the table are meant to highlight your ongoing costs. Therefore, the hypothetical information is useful in comparing ongoing costs, and will not help you determine the relative total costs of owning different funds.

							HYPOTHETICAL
			ACTUAL				(5% annual return before expenses)
	Beginning		Ending		Expenses		Ending		Expenses		Annualized
	Account Value		Account Value		Paid During		Account Value		Paid During		Expense
Class	(07/01/09)		(12/31/09)1		Period2		(12/31/09)		Period2		Ratio
Series I	$	1,000.00	$	1,204.50	$	5.67	$	1,020.06	$	5.19		1.02	%
Series II		1,000.00		1,203.50		7.05		1,018.80		6.46		1.27

1	The actual ending account value is based on the actual total return of the Fund for the period July 1, 2009 through December 31, 2009, after actual expenses and will differ from the hypothetical ending account value which is based on the Fund’s expense ratio and a hypothetical annual return of 5% before expenses.
2	Expenses are equal to the Fund’s annualized expense ratio as indicated above multiplied by the average account value over the period, multiplied by 184/365 to reflect the most recent fiscal half year.

AIM V.I. Large Cap Growth Fund

Tax Information

Form 1099-DIV, Form 1042-S and other year-end tax information provide shareholders with actual calendar year amounts that should be included in their tax returns. Shareholders should consult their tax advisors.

  The following distribution information is being provided as required by the Internal Revenue Code or to meet a specific state’s requirement.

  The Fund designates the following amounts or, if subsequently determined to be different, the maximum amount allowable for its fiscal year ended December 31, 2009:

Federal and State Income Tax
Corporate Dividends Received Deduction*	100%

*  The above percentage is based on ordinary income dividends paid to shareholders during the Fund’s fiscal year.

AIM V.I. Large Cap Growth Fund

Trustees and Officers

The address of each trustee and officer of AIM Variable Insurance Funds (the “Trust”), is 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173. Each trustee oversees 105 portfolios in the AIM Funds complex. The trustees serve for the life of the Trust, subject to their earlier death, incapacitation, resignation, retirement or removal as more specifically provided in the Trust’s organizational documents. Each officer serves for a one year term or until their successors are elected and qualified. Column two below includes length of time served with predecessor entities, if any.

	Trustee and/
Name, Year of Birth and	or Officer	Principal Occupation(s)	Other Directorship(s)
Position(s) Held with the Trust	Since	During Past 5 Years	Held by Trustee
Interested Persons
Martin L. Flanagan1 — 1960 Trustee	2007	Executive Director, Chief Executive Officer and President, Invesco Ltd. (ultimate parent of Invesco Aim and a global investment management firm); Adviser to the Board, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Trustee, The AIM Family of Funds®; Board of Governors, Investment Company Institute; and Member of Executive Board, SMU Cox School of Business	None
		Formerly: Chairman, Invesco Aim Advisors, Inc. (registered investment adviser); Director, Chairman, Chief Executive Officer and President, IVZ Inc. (holding company), INVESCO Group Services, Inc. (service provider) and Invesco North American Holdings, Inc. (holding company); Director, Chief Executive Officer and President, Invesco Holding Company Limited (parent of Invesco Aim and a global investment management firm); Director, Invesco Ltd.; Chairman and Vice Chairman, Investment Company Institute
Philip A. Taylor2 — 1954 Trustee, President and Principal Executive Officer	2006	Head of North American Retail and Senior Managing Director, Invesco Ltd.; Director, Co-Chairman, Co-President and Co-Chief Executive Officer, Invesco Advisers, inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Director, Chief Executive Officer and President, Invesco Aim Advisors, Inc. and 1371 Preferred Inc. (holding company); Director, Chairman, Chief Executive Officer and President, Invesco Aim Management Group, Inc. (financial services holding company); Director, Co-Chairman, Co-President and Co-Chief Executive Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Director and President, INVESCO Funds Group, Inc. (registered investment adviser and registered transfer agent) and AIM GP Canada Inc. (general partner for limited partnerships); Director, Invesco Aim Distributors, Inc. (registered broker dealer); Director and Chairman, Invesco Aim Investment Services, Inc. (registered transfer agent) and INVESCO Distributors, Inc. (registered broker dealer); Director, President and Chairman, INVESCO Inc. (holding company) and Invesco Canada Holdings Inc. (holding company); Chief Executive Officer, AIM Trimark Corporate Class Inc. (corporate mutual fund company) and AIM Trimark Canada Fund Inc. (corporate mutual fund company); Director and Chief Executive Officer, Invesco Trimark Ltd./Invesco Trimark Ltèe (registered investment adviser and registered transfer agent) and Invesco Trimark Dealer Inc. (registered broker dealer); Trustee, President and Principal Executive Officer, The AIM Family of Funds® (other than AIM Treasurer’s Series Trust and Short-Term Investments Trust); Trustee and Executive Vice President, The AIM Family of Funds® (AIM Treasurer’s Series Trust and Short-Term Investments Trust only); and Manager, Invesco PowerShares Capital Management LLC	None
		Formerly: Manager, Invesco PowerShares Capital Management LLC; Director, Chief Executive Officer and President, Invesco Aim Advisors, Inc.; Director, Chairman, Chief Executive Officer and President, Invesco Aim Capital Management, Inc.; President, Invesco Trimark Dealer Inc. and Invesco Trimark Ltd./Invesco Trimark Ltèe; Director and President, AIM Trimark Corporate Class Inc. and AIM Trimark Canada Fund Inc.; Senior Managing Director, Invesco Holding Company Limited; Trustee and Executive Vice President, Tax-Free Investments Trust; Director and Chairman, Fund Management Company (former registered broker dealer); President and Principal Executive Officer, The AIM Family of Funds® (AIM Treasurer’s Series Trust, Short-Term Investments Trust and Tax-Free Investments Trust only); President, AIM Trimark Global Fund Inc. and AIM Trimark Canada Fund Inc.
Independent Trustees
Bruce L. Crockett — 1944 Trustee and Chair	1993	Chairman, Crockett Technology Associates (technology consulting company)	ACE Limited (insurance company); Captaris, Inc. (unified messaging provider); and Investment Company Institute
Bob R. Baker — 1936 Trustee	2004	Retired	None
Frank S. Bayley — 1939 Trustee	2001	Retired Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios)	None
James T. Bunch — 1942 Trustee	2004	Founder, Green, Manning & Bunch Ltd., (investment banking firm)	Board of Governors, Western Golf Association/Evans Scholars Foundation and Executive Committee, United States Golf Association
Albert R. Dowden — 1941 Trustee	2000	Director of a number of public and private business corporations, including the Boss Group, Ltd. (private investment and management); Reich & Tang Funds (registered investment company); and Homeowners of America Holding Corporation/Homeowners of America Insurance Company (property casualty company)	Board of Nature’s Sunshine Products, Inc.
		Formerly: Director, Continental Energy Services, LLC (oil and gas pipeline service); Director, CompuDyne Corporation (provider of product and services to the public security market) and Director, Annuity and Life Re (Holdings), Ltd. (reinsurance company); Director, President and Chief Executive Officer, Volvo Group North America, Inc.; Senior Vice President, AB Volvo; Director of various public and private corporations
Jack M. Fields — 1952 Trustee	1997	Chief Executive Officer, Twenty First Century Group, Inc. (government affairs company); and Owner and Chief Executive Officer, Dos Angelos Ranch, L.P. (cattle, hunting, corporate entertainment), Discovery Global Education Fund (non-profit) and Cross Timbers Quail Research Ranch (non-profit)	Administaff
		Formerly: Chief Executive Officer, Texana Timber LP (sustainable forestry company)
Carl Frischling — 1937 Trustee	1993	Partner, law firm of Kramer Levin Naftalis and Frankel LLP	Director, Reich & Tang Funds (16 portfolios)
Prema Mathai-Davis — 1950 Trustee	1998	Retired	None
Lewis F. Pennock — 1942 Trustee	1993	Partner, law firm of Pennock & Cooper	None
Larry Soll — 1942 Trustee	2004	Retired	None
Raymond Stickel, Jr. — 1944 Trustee	2005	Retired Formerly: Director, Mainstay VP Series Funds, Inc. (25 portfolios)	None

1	Mr. Flanagan is considered an interested person of the Trust because he is an officer of the adviser to the Trust, and an officer and a director of Invesco Ltd., ultimate parent of the adviser to the Trust.
2	Mr. Taylor is considered an interested person of the Trust because he is an officer and a director of the adviser to, and a director of the principal underwriter of, the Trust.

T-1

Trustees and Officers — (continued)

	Trustee and/
Name, Year of Birth and	or Officer	Principal Occupation(s)	Other Directorship(s)
Position(s) Held with the Trust	Since	During Past 5 Years	Held by Trustee
Other Officers
Russell C. Burk — 1958 Senior Vice President and Senior Officer	2005	Senior Vice President and Senior Officer of The AIM Family of Funds®	N/A
John M. Zerr — 1962 Senior Vice President, Chief Legal Officer and Secretary	2006	Director, Senior Vice President, Secretary and General Counsel, Invesco Aim Management Group, Inc., Senior Vice President, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Director, Senior Vice President and Secretary, Invesco Aim Distributors, Inc.; Director, Vice President and Secretary, Invesco Aim Investment Services, Inc. and INVESCO Distributors, Inc.; Director and Vice President, INVESCO Funds Group, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The AIM Family of Funds®; and Manager, Invesco PowerShares Capital Management LLC	N/A
		Formerly: Director, Senior Vice President, General Counsel and Secretary, Invesco Aim Advisors, Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco Aim Capital Management, Inc.; Chief Operating Officer and General Counsel, Liberty Ridge Capital, Inc. (an investment adviser); Vice President and Secretary, PBHG Funds (an investment company) and PBHG Insurance Series Fund (an investment company); Chief Operating Officer, General Counsel and Secretary, Old Mutual Investment Partners (a broker-dealer); General Counsel and Secretary, Old Mutual Fund Services (an administrator) and Old Mutual Shareholder Services (a shareholder servicing center); Executive Vice President, General Counsel and Secretary, Old Mutual Capital, Inc. (an investment adviser); and Vice President and Secretary, Old Mutual Advisors Funds (an investment company)
Lisa O. Brinkley — 1959 Vice President	2004	Global Compliance Director, Invesco Ltd.; Chief Compliance Officer, Invesco Aim Distributors, Inc. and Invesco Aim Investment Services, Inc.; and Vice President, The AIM Family of Funds®	N/A
		Formerly: Senior Vice President, Invesco Aim Management Group, Inc.; Senior Vice President and Chief Compliance Officer, Invesco Aim Advisors, Inc. and The AIM Family of Funds®; Vice President and Chief Compliance Officer, Invesco Aim Capital Management, Inc. and Invesco Aim Distributors, Inc.; Vice President, Invesco Aim Investment Services, Inc. and Fund Management Company
Kevin M. Carome — 1956 Vice President	2003	General Counsel, Secretary and Senior Managing Director, Invesco Ltd.; Director, Invesco Holding Company Limited and INVESCO Funds Group, Inc.; Director and Executive Vice President, IVZ, Inc., Invesco Group Services, Inc., Invesco North American Holdings, Inc. and Invesco Investments (Bermuda) Ltd.; Director and Secretary, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); and Vice President, The AIM Family of Funds® Formerly: Senior Managing Director and Secretary, Invesco North American Holdings, Inc.; Vice President and Secretary, IVZ, Inc. and Invesco Group Services, Inc.; Senior Managing Director and Secretary, Invesco Holding Company Limited; Director, Senior Vice President, Secretary and General Counsel, Invesco Aim Management Group, Inc. and Invesco Aim Advisors, Inc.; Senior Vice President, Invesco Aim Distributors, Inc.; Director, General Counsel and Vice President, Fund Management Company; Vice President, Invesco Aim Capital Management, Inc. and Invesco Aim Investment Services, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The AIM Family of Funds®; Director and Vice President, INVESCO Distributors, Inc.; and Chief Executive Officer and President, INVESCO Funds Group, Inc.	N/A
Sheri Morris — 1964 Vice President, Treasurer and Principal Financial Officer	1999	Vice President, Treasurer and Principal Financial Officer, The AIM Family of Funds®; and Vice President, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.) Formerly: Vice President, Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.; Assistant Vice President and Assistant Treasurer, The AIM Family of Funds® and Assistant Vice President, Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A
Karen Dunn Kelley — 1960 Vice President	1993	Head of Invesco’s World Wide Fixed Income and Cash Management Group; Senior Vice President, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Executive Vice President, Invesco Aim Distributors, Inc.; Senior Vice President, Invesco Aim Management Group, Inc.; and Director, Invesco Mortgage Capital Inc.; Vice President, The AIM Family of Funds® (other than AIM Treasurer’s Series Trust and Short-Term Investments Trust); and President and Principal Executive Officer, The AIM Family of Funds® (AIM Treasurer’s Series Trust and Short-Term Investments Trust only)	N/A
		Formerly: Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Director of Cash Management and Senior Vice President, Invesco Aim Advisors, Inc. and Invesco Aim Capital Management, Inc.; President and Principal Executive Officer, Tax-Free Investments Trust; Director and President, Fund Management Company; Chief Cash Management Officer, Director of Cash Management, Senior Vice President, and Managing Director, Invesco Aim Capital Management, Inc.; Director of Cash Management, Senior Vice President, and Vice President, Invesco Aim Advisors, Inc. and The AIM Family of Funds® (AIM Treasurer’s Series Trust, Short-Term Investments Trust and Tax-Free Investments Trust only)
Lance A. Rejsek — 1967 Anti-Money Laundering Compliance Officer	2005	Anti-Money Laundering Compliance Officer, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Invesco Aim Distributors, Inc., Invesco Aim Investment Services, Inc., and The AIM Family of Funds®	N/A
		Formerly: Anti-Money Laundering Compliance Officer, Fund Management Company, Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.
Todd L. Spillane — 1958 Chief Compliance Officer	2006	Senior Vice President, Invesco Aim Management Group, Inc.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Chief Compliance Officer, The AIM Family of Funds®, INVESCO Private Capital Investments, Inc. (holding company), Invesco Private Capital, Inc. (registered investment adviser) and Invesco Senior Secured Management, Inc. (registered investment adviser); Vice President, Invesco Aim Distributors, Inc. and Invesco Aim Investment Services, Inc.	N/A
		Formerly: Senior Vice President and Chief Compliance Officer, Invesco Aim Advisors, Inc. and Invesco Aim Capital Management, Inc.; Chief Compliance Officer, Invesco Global Asset Management (N.A.), Inc.; Vice President, Invesco Aim Capital Management, Inc. and Fund Management Company

The Statement of Additional Information of the Trust includes additional information about the Fund’s Trustees and is available upon request, without charge, by calling 1.800.959.4246. Please refer to the Fund’s prospectus for information on the Fund’s sub-advisers.

Office of the Fund	Investment Adviser	Distributor	Auditors
11 Greenway Plaza, Suite 100	Invesco Advisers, Inc.	Invesco Aim Distributors, Inc.	PricewaterhouseCoopers LLP
Houston, TX 77046-1173	1555 Peachtree Street, N.E.	11 Greenway Plaza, Suite 100	1201 Louisiana Street, Suite 2900
	Atlanta, GA 30309	Houston, TX 77046-1173	Houston, TX 77002-5678
Counsel to the Fund	Counsel to the	Transfer Agent	Custodian
Stradley Ronon Stevens & Young, LLP	Independent Trustees	Invesco Aim Investment Services, Inc.	State Street Bank and Trust Company
2600 One Commerce Square	Kramer, Levin, Naftalis & Frankel LLP	P.O. Box 4739	225 Franklin
Philadelphia, PA 19103	1177 Avenue of the Americas	Houston, TX 77210-4739	Boston, MA 02110-2801
	New York, NY 10036-2714

T-2

AIM V.I. Leisure Fund

Annual Report to Shareholders n December 31, 2009

The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter-ends. For the second and fourth quarters, the lists appear in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The Fund’s Form N-Q filings are available on the SEC website, sec.gov. Copies of the Fund’s Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers for the Fund are 811-07452 and 033-57340. The Fund’s most recent portfolio holdings, as filed on Form N-Q, have also been made available to insurance companies issuing variable annuity contracts and variable life insurance policies (“variable products”) that invest in the Fund.

A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, from our Client Services department at 800 410 4246 or on the Invesco Aim website, invescoaim.com. On the home page, scroll down and click on Proxy Policy. The information is also available on the SEC website, sec.gov.

Information regarding how the Fund voted proxies related to its portfolio securities during the 12 months ended June 30, 2009, is available at our website, invescoaim.com. Click the About Us tab at the top of the home page; click Legal Information; and then click Proxy Voting Search. The information is also available on the SEC website, sec.gov.

Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Aim Distributors, Inc. is the U.S. distributor for Invesco Ltd.’s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd.

This report must be accompanied or preceded by a currently effective Fund prospectus and variable product prospectus, which contain more complete information, including sales charges and expenses. Investors should read each carefully before investing.

Invesco Aim Distributors, Inc.

NOT FDIC INSURED  |  MAY LOSE VALUE  |  NO BANK GUARANTEE

Management’s Discussion of Fund Performance

Performance summary

The year was characterized by two dramatically different market environments. In early 2009, equity markets declined steeply as credit markets remained frozen and risk premiums rose dramatically in response to the global recession. However, as the impact from central banks’ coordinated easing efforts and companies’ aggressive cost cuts materialized, access to funding improved and market valuations in both the credit and equity markets recovered from their March lows.

   The consumer discretionary sector benefited from a rotation into more cyclical stocks as investors anticipated an economic recovery. As a result, AIM V.I. Leisure Fund, excluding variable product issuer charges, outperformed the broad market, as measured by the S&P 500 Index, for the year ended December 31, 2009. The majority of the Fund’s outperformance relative to the S&P 500 Index resulted from security selection and overweight exposure to the media industry and the textile, apparel and luxury goods industry.

   Your Fund’s long-term performance can be found later in this report.

Fund vs. Indexes

Total returns, 12/31/08 to 12/31/09, excluding variable product issuer charges.
If variable product issuer charges were included, returns would be lower.

Series I Shares	32.78	%
Series II Shares	32.47
S&P 500 Index▼ (Broad Market Index)	26.47

^▼ Lipper Inc.

How we invest

We focus on companies that profit from consumer spending on leisure activities – products or services purchased with consumers’ discretionary dollars. The Fund emphasizes stocks of cable television, publishing, cruise line, advertising, hotel, casino, electronic game and toy manufacturing, restaurant, retailing and entertainment companies.

   Stock selection is based on a research driven bottom-up investment approach focusing on company fundamentals and growth prospects. Quantitative screens are used to help identify attractive stock candidates within the universe of leisure-related companies. Portfolio candidates are further refined by fundamental analysis performed at the company level which includes an evaluation of industry

dynamics, competitive intensity and drivers of growth.

   The investment process seeks to identify attractively valued leisure-related companies exhibiting the following characteristics:

n Attractive revenue growth profile

n Strong free cash flow generation

n Returns on invested capital in excess of weighted-average cost of capital

n Operating in low capital intensity businesses

n Management teams that are good stewards of capital

   We construct the portfolio with the goal of holding from 40 to 75 individual stocks with an average investment horizon of 18 to 24 months. Portfolio weightings are adjusted based on current economic and industry conditions.

   We may reduce or eliminate exposure to a stock when:

n A company reaches its price target.

n A more compelling opportunity is identified.

n A change in fundamentals occurs – either company specific or industry wide.

n A stock’s technical profile indicated negative underlying information which is further determined to have violated a fundamental investment thesis.

Market conditions and your Fund

Though the first quarter of 2009 was marked by headlines claiming economic “Armageddon,” the U.S. economy began to show signs that the contraction was moderating. Economic data indicated that the rampant decline in business spending and consumption that occurred in 2008 and early 2009 had eased. Given signs that the economic downturn was moderating, equity and credit markets improved. In addition, financial markets benefited from various government programs introduced to improve bank balance sheets and reduce credit spreads.

   A variety of emergency fiscal and monetary initiatives of governments and central banks appear to have succeeded in averting a global economic collapse. However, high unemployment levels and the long-term implications of the sovereign debt burden for Western economies continue to cause concern. Additionally, households still have high debt service ratios relative to historical levels.

   Against this economic backdrop early-cycle sectors – information technology (IT), materials and consumer discretionary – were among the best performing sectors of the S&P 500 Index.¹ Conversely defensive sectors – telecommunication services, utilities and

Portfolio Composition
By sector
Consumer Discretionary	80.9	%
Consumer Staples	11.1
Information Technology	7.0
Money Market Funds
Plus Other Assets Less Liabilities	1.0

Top 10 Equity Holdings*
1.	Walt Disney Co. (The)	7.0	%
2.	Omnicom Group Inc.	4.1
3.	Google Inc.-Class A	4.0
4.	Marriott International, Inc.-Class A	3.0
5.	Polo Ralph Lauren Corp.	2.9
6.	International Game Technology	2.9
7.	Scripps Networks Interactive, Inc.-
	Class A	2.8
8.	Interpublic Group of Cos., Inc. (The)	2.5
9.	Coach, Inc.	2.5
10.	Time Warner Inc.	2.4

Total Net Assets	$20.3 million
Total Number of Holdings*		52

The Fund’s holdings are subject to change, and there is no assurance that the Fund will continue to hold any particular security.

* Excluding money market fund holdings.

AIM V.I. Leisure Fund

energy — were among the weakest performing sectors.¹

   During the year, and on an absolute basis, top contributors to Fund performance were the media industry and the textiles, apparel and luxury goods industry. Holdings in the software and food and staples retailing industries detracted from Fund performance.

   Relative to the S&P 500 Index, the Fund benefited from security selection and overweight exposure to the media industry and textile, apparel and luxury goods industry. Conversely, the Fund’s underweight exposure to the software, semiconductor and communication equipment industries — all in the IT sector — hurt Fund performance relative to the index.

   Top contributors to Fund performance included Google, Anheuser-Busch Inbev, Disney, Hanesbrands and Nordstrom. Top detractors from Fund performance included News Corp., Hot Topic, Comcast, Burger King and Pernod-Ricard. We sold our positions in News Corp., Comcast, Burger King and Pernod-Ricard during 2009.

   As a result of improving economic data during the year, we steadily increased the Fund’s consumer discretionary exposure while continuing to uphold our mandate of investing in companies that focus on leisure products and services. To fund our increased weight in consumer discretionary, we reduced our beverage exposure by selling Diageo and Pernod Ricard.

   Although traditional media stocks experienced strong price performance following the market bottom of March, many of these companies are structurally challenged due to their ownership of newspapers, magazines and radio and broadcast television stations, which are losing market share to other forms of media. As a result, we took advantage of the strength in the stocks and reduced our exposure to traditional media stocks during the year in an effort to upgrade the quality of our media holdings as well as reduce our overweight position. Within movies and entertainment, we sold News Corp. Within cable and satellite, we sold positions in Liberty Entertainment and Cablevision Systems. And within advertising, we swapped WPP for Inter-public Group as we felt Interpublic Group has more attractive margin expansion opportunities.

   We increased our casino and gaming exposure during the year by adding to existing holdings International Game Technology and Penn National Gaming while adding a new holding, WMS Industries. We believed slot machine manufacturers such as International Game Technology and WMS Industries may benefit from an upcoming replacement cycle of slot machines on casino floors.

   While we believe discretionary spending may improve, its rate of growth may lag past economic recoveries as consumer leverage remains above the long term average and personal savings remains elevated as consumers reduce their debt. Thrifty consumers are likely to place greater emphasis on the quality of products, not the quantity of products. Consumers may shift from conspicuous consumption to conscious consumption. Finally, luxury purchases may begin to improve if the stock market rises, housing prices stabilize and consumer confidence recovers from the lows they experienced in early 2009.

   As always, we thank you for your continued investment in AIM V.I. Leisure Fund.

1  Lipper Inc.

The views and opinions expressed in management’s discussion of Fund performance are those of Invesco Advisers, Inc. These views and opinions are subject to change at any time based on factors such as market and economic conditions. These views and opinions may not be relied upon as investment advice or recommendations, or as 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 Invesco Advisers, Inc. 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.

See important Fund and index disclosures later in this report.

Juan Hartsfield
Chartered Financial Analyst, portfolio manager, is lead manager of AIM V.I. Leisure Fund. He began his investment career in 2000 and joined Invesco Aim in 2004. Mr. Hartsfield earned a B.S. in petroleum engineering from The University of Texas at Austin and an M.B.A. from the University of Michigan.

Jonathan Mueller
Chartered Financial Analyst, portfolio manager, is manager of AIM V.I. Leisure Fund. He joined Invesco Aim in 2001 and became a portfolio manager in 2009. Mr. Mueller earned a B.B.A. in accounting from Texas Christian University and an M.B.A. in finance from The University of Texas at Austin. He is a Certified Public Accountant.

Assisted by the Leisure Team

AIM V.I. Leisure Fund

Your Fund’s Long-Term Performance

Results of a $10,000 Investment — Oldest Share Class since Inception
Fund and index data from 4/30/02

1 Lipper Inc.

Past performance cannot guarantee comparable future results.

   This chart, which is a logarithmic chart, presents the fluctuations in the value of the Fund and its indexes. We believe that a logarithmic chart is more effective than other types of charts in illustrating

changes in value during the early years shown in the chart. The vertical axis, the one that indicates the dollar value of an investment, is constructed with each segment representing a percent change in the value of the investment. In this chart, each segment represents a doubling, or

100% change, in the value of the investment. In other words, the space between $5,000 and $10,000 is the same size as the space between $10,000 and $20,000.

Average Annual Total Returns
As of 12/31/09
Series I Shares
Inception (4/30/02)	1.81	%
5 Years	-1.58
1 Year	32.78
Series II Shares
Inception	1.58	%
5 Years	-1.82
1 Year	32.47

Series II shares’ inception date is April 30, 2004. Returns since that date are historical. All other returns are the blended returns of the historical performance of Series II shares since their inception and the restated historical performance of Series I shares (for periods prior to inception of Series II shares) adjusted to reflect the Rule 12b-1 fees applicable to the Series II shares. The inception date of Series I shares is April 30, 2002. The performance of the Fund’s Series I and Series II share classes will differ primarily due to different class expenses.

   The performance data quoted represent past performance and cannot guarantee comparable future results; current performance may be lower or higher. Please contact your

variable product issuer or financial adviser for the most recent month-end variable product performance. Performance figures reflect Fund expenses, reinvested distributions and changes in net asset value. Investment return and principal value will fluctuate so that you may have a gain or loss when you sell shares.

   The net annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 1.02% and 1.27%, respectively.^1,2 The total annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 1.45% and 1.70%, respectively. The expense ratios presented above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

   AIM V.I. Leisure Fund, a series portfolio of AIM Variable Insurance Funds, is currently offered through insurance companies issuing variable products. You cannot purchase shares of the Fund directly. Performance figures given represent the Fund and

are not intended to reflect actual variable product values. They do not reflect sales charges, expenses and fees assessed in connection with a variable product. Sales charges, expenses and fees, which are determined by the variable product issuers, will vary and will lower the total return.

   The most recent month-end performance data at the Fund level, excluding variable product charges, is available on the Invesco Aim automated information line, 866 702 4402. As mentioned above, for the most recent month-end performance including variable product charges, please contact your variable product issuer or financial adviser.

   Had the adviser not waived fees and/ or reimbursed expenses, performance would have been lower.

1	Total annual operating expenses less any contractual fee waivers and/or expense reimbursements by the adviser in effect through at least April 30, 2011. See current prospectus for more information.
2	Total annual operating expenses less any contractual fee waivers and/or expense reimbursements by the adviser in effect through at least June 30, 2010. See current prospectus for more information.

AIM V.I. Leisure Fund

AIM V.I. Leisure Fund’s investment objective is capital growth.

n Unless otherwise stated, information presented in this report is as of December 31, 2009, and is based on total net assets.

n Unless otherwise noted, all data provided by Invesco.

Principal risks of investing in the Fund

Prices of equity securities change in response to many factors, including the historical and prospective earnings of the issuer, the value of its assets, general economic conditions, interest rates, investor perceptions and market liquidity.

   Foreign securities have additional risks, including exchange rate changes, political and economic upheaval, relative lack of information, relatively low market liquidity, and the potential lack of strict financial and accounting controls and standards.

   The leisure sector depends on consumer discretionary spending, which generally falls during economic downturns.

   Since a large percentage of the Fund’s assets may be invested in securities of a limited number of companies, each investment has a greater effect on the Fund’s overall performance, and any change in the value of those securities could significantly affect the value of your investment in the Fund.

   There is no guarantee that the investment techniques and risk analysis used by the Fund’s portfolio managers will produce the desired results.

   The prices of securities held by the Fund may decline in response to market risks.

   The Fund’s investments are concentrated in a comparatively narrow segment of the economy. Consequently, the Fund may tend to be more volatile than other mutual funds, and the value of the Fund’s investments may tend to rise and fall more rapidly.

About indexes used in this report

The S&P 500^® Index is an unmanaged index considered representative of the U.S. stock market.

   The S&P 500 Consumer Discretionary Index is an unmanaged index considered representative of the consumer discretionary market. On May 1, 2010, the Fund will adopt the S&P 500 Consumer Discretionary Index as its style-specific index because we believe it more closely reflects the performance of the type of securities in which the Fund invests.

   The Fund is not managed to track the performance of any particular index, including the indexes defined here, and consequently, the performance of the Fund may deviate significantly from the performance of the indexes.

   A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group reflects fund expenses; performance of a market index does not.

Other information

The Chartered Financial Analyst^® (CFA^®) designation is globally recognized and attests to a charterholder’s success in a rigorous and comprehensive study program in the field of investment management and research analysis.

   CPA^® and Certified Public Accountant^® are trademarks owned by the American Institute of Certified Public Accountants.

   The returns shown in management’s discussion of Fund performance are based on net asset values calculated for shareholder transactions. Generally accepted accounting principles require adjustments to be made to the net assets of the Fund at period end for financial reporting purposes, and as such, the net asset values for shareholder transactions and the returns based on those net asset values may differ from the net asset values and returns reported in the Financial Highlights. Additionally, the returns and net asset values shown throughout this report are at the Fund level only and do not include variable product issuer charges. If such charges were included, the total returns would be lower.

   Industry classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s.

AIM V.I. Leisure Fund

Schedule of Investments^(a)

December 31, 2009

	Shares		Value
Common Stocks & Other Equity Interests–98.95%
Advertising–8.19%
Interpublic Group of Cos., Inc. (The)(b)		70,276	$	518,637
Lamar Advertising Co.–Class A(b)(c)		9,962		309,719
Omnicom Group Inc.		21,381		837,066
				1,665,422
Apparel Retail–5.24%
Abercrombie & Fitch Co.–Class A(c)		9,653		336,407
American Eagle Outfitters, Inc.		21,139		358,940
Hot Topic, Inc.(b)		29,291		186,291
TJX Cos., Inc. (The)		5,018		183,408
				1,065,046
Apparel, Accessories & Luxury Goods–9.03%
Carter’s, Inc.(b)		10,987		288,409
Coach, Inc.		14,011		511,822
Hanesbrands, Inc.(b)(c)		18,404		443,720
Polo Ralph Lauren Corp.		7,325		593,179
				1,837,130
Brewers–4.15%
Anheuser-Busch InBev N.V. (Belgium)		8,360		431,323
Heineken N.V. (Netherlands)		8,723		412,763
				844,086
Broadcasting–3.03%
Discovery Communications, Inc.–Class A(b)		6,729		206,378
Grupo Televisa S.A.–ADR (Mexico)		19,718		409,346
				615,724
Cable & Satellite–2.85%
Scripps Networks Interactive,–Class A		13,977		580,046
Casinos & Gaming–6.49%
International Game Technology		30,944		580,819
Penn National Gaming, Inc.(b)		11,508		312,787
WMS Industries Inc.(b)		10,668		426,720
				1,320,326
Consumer Electronics–1.09%
Harman International Industries, Inc.		6,291		221,946
Department Stores–4.87%
J.C. Penney Co., Inc.		5,716		152,103
Kohl’s Corp.(b)		7,332		395,414
Nordstrom, Inc.		11,781		442,730
				990,247
Food Retail–1.92%
Woolworths Ltd. (Australia)		15,604		390,856
Footwear–1.84%
NIKE, Inc.–Class B		5,676		375,013
General Merchandise Stores–2.16%
Target Corp.		9,064		438,426
Home Improvement Retail–4.25%
Home Depot, Inc. (The)		15,005		434,095
Lowe’s Cos., Inc.		18,445		431,428
				865,523
Hotels, Resorts & Cruise Lines–7.26%
Carnival Corp.(b)(d)		6,173		195,622
Choice Hotels International, Inc.		10,343		327,459
Hyatt Hotels Corp.–Class A(b)		5,998		178,800
Marriott International, Inc.–Class A		22,142		603,370
Regal Hotels International Holdings Ltd. (Hong Kong)		413,800		171,514
				1,476,765
Hypermarkets & Super Centers–1.50%
Costco Wholesale Corp.		5,164		305,554
Internet Retail–2.06%
Amazon.com, Inc.(b)		3,114		418,895
Internet Software & Services–6.98%
Google Inc.–Class A(b)		1,311		812,794
GSI Commerce, Inc.(b)		8,291		210,508
Knot, Inc. (The)(b)		21,558		217,089
OpenTable, Inc.(b)(c)		7,080		180,257
				1,420,648
Movies & Entertainment–11.87%
Time Warner Inc.		16,455		479,498
Viacom Inc.–Class A(b)		7,180		226,170
Viacom Inc.–Class B(b)		9,771		290,492
Walt Disney Co. (The)		43,979		1,418,323
				2,414,483
Restaurants–8.02%
Brinker International, Inc.		20,459		305,248
Darden Restaurants, Inc.		11,602		406,882
Jack in the Box Inc.(b)		13,721		269,892
McDonald’s Corp.		5,278		329,559
Yum! Brands, Inc.		9,168		320,605
				1,632,186

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

AIM V.I. Leisure Fund

	Shares		Value
Soft Drinks–3.54%
Coca-Cola Co. (The)		5,766	$	328,662
PepsiCo, Inc.		6,425		390,640
				719,302
Specialty Stores–2.61%
PetSmart, Inc.		8,034		214,428
Staples, Inc.		12,843		315,809
				530,237
Total Common Stocks & Other Equity Interests (Cost $17,245,019)				20,127,861
Money Market Funds–1.34%
Liquid Assets Portfolio–Institutional Class(e)		136,720		136,720
Premier Portfolio–Institutional Class(e)		136,720		136,720
Total Money Market Funds (Cost $273,440)				273,440
TOTAL INVESTMENTS (excluding investments purchased with cash collateral from securities on loan)–100.29% (Cost $17,518,459)				20,401,301
Investments Purchased with Cash Collateral from Securities on Loan
Money Market Funds–1.87%
Liquid Assets Portfolio–Institutional Class (Cost $380,320)(e)(f)		380,320		380,320
TOTAL INVESTMENTS–102.16% (Cost $17,898,779)				20,781,621
OTHER ASSETS LESS LIABILITIES–(2.16)%				(439,963	)
NET ASSETS–100.00%			$	20,341,658

Investment Abbreviations:

ADR – American Depositary Receipt

Notes to Schedule of Investments:

(a)	Industry and/or sector classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s.
(b)	Non-income producing security.
(c)	All or a portion of this security was out on loan at December 31, 2009.
(d)	Each unit represents one common share and one trust share.
(e)	The money market fund and the Fund are affiliated by having the same investment advisor.
(f)	The security has been segregated to satisfy the commitment to return the cash collateral received in securities lending transactions upon the borrower’s return of the securities loaned. See Note 1J.

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

AIM V.I. Leisure Fund

Statement of Assets and Liabilities

December 31, 2009

Assets:
Investments, at value (Cost $17,245,019)*	$	20,127,861
Investments in affiliated money market funds, at value and cost		653,760
Total investments, at value (Cost $17,898,779)		20,781,621
Foreign currencies, at value (Cost $4,512)		4,497
Receivables for:
Fund shares sold		53
Dividends		31,780
Investment for trustee deferred compensation and retirement plans		8,521
Total assets		20,826,472
Liabilities:
Payables for:
Fund shares reacquired		48,054
Collateral upon return of securities loaned		380,320
Accrued fees to affiliates		15,612
Accrued other operating expenses		29,275
Trustee deferred compensation and retirement plans		11,553
Total liabilities		484,814
Net assets applicable to shares outstanding	$	20,341,658
Net assets consist of:
Shares of beneficial interest	$	23,227,676
Undistributed net investment income		89,315
Undistributed net realized gain (loss)		(5,858,086	)
Unrealized appreciation		2,882,753
	$	20,341,658
Net Assets:
Series I	$	20,332,847
Series II	$	8,811
Shares outstanding, $0.001 par value per share, unlimited number of shares authorized:
Series I		3,104,494
Series II		1,345
Series I:
Net asset value per share	$	6.55
Series II:
Net asset value per share	$	6.55

*  At December 31, 2009, securities with an aggregate value of $372,002 were on loan to brokers.

Statement of Operations

For the year ended December 31, 2009

Investment income:
Dividends (net of foreign withholding taxes of $5,067)	$	299,737
Dividends from affiliated money market funds (includes securities lending income of $7,121)		10,783
Total investment income		310,520
Expenses:
Advisory fees		136,688
Administrative services fees		95,528
Custodian fees		11,645
Distribution fees — Series II		17
Transfer agent fees		1,703
Trustees’ and officers’ fees and benefits		20,154
Professional services fees		40,168
Other		11,194
Total expenses		317,097
Less: Fees waived		(133,826	)
Net expenses		183,271
Net investment income		127,249
Realized and unrealized gain (loss) from:
Net realized gain (loss) from:
Investment securities		(3,612,347	)
Foreign currencies		(19,431	)
		(3,631,778	)
Change in net unrealized appreciation of:
Investment securities		8,735,318
Foreign currencies		6,018
		8,741,336
Net realized and unrealized gain		5,109,558
Net increase in net assets resulting from operations	$	5,236,807

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

AIM V.I. Leisure Fund

Statement of Changes in Net Assets

For the years ended December 31, 2009 and 2008

	2009			2008
Operations:
Net investment income	$	127,249		$	349,505
Net realized gain (loss)		(3,631,778	)		(1,784,774	)
Change in net unrealized appreciation (depreciation)		8,741,336			(14,045,503	)
Net increase (decrease) in net assets resulting from operations		5,236,807			(15,480,772	)
Distributions to shareholders from net investment income:
Series I		(347,842	)		(301,961	)
Series II		(128	)		(66	)
Total distributions from net investment income		(347,970	)		(302,027	)
Distributions to shareholders from net realized gains:
Series I		—			(4,987,772	)
Series II		—			(1,573	)
Total distributions from net realized gains		—			(4,989,345	)
Share transactions-net:
Series I		(2,556,830	)		(3,824,172	)
Series II		1,158			2,197
Net increase (decrease) in net assets resulting from share transactions		(2,555,672	)		(3,821,975	)
Net increase (decrease) in net assets		2,333,165			(24,594,119	)
Net assets:
Beginning of year		18,008,493			42,602,612
End of year (includes undistributed net investment income of $89,315 and $329,467, respectively)	$	20,341,658		$	18,008,493

Notes to Financial Statements

December 31, 2009

NOTE 1—Significant Accounting Policies

AIM V.I. Leisure Fund (the “Fund”) is a series portfolio of AIM Variable Insurance Funds (the “Trust”). The Trust is a Delaware statutory trust registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end series management investment company consisting of twenty-one separate portfolios, (each constituting a “Fund”). The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Matters affecting each Fund or class will be voted on exclusively by the shareholders of such Fund or class. Current Securities and Exchange Commission (“SEC”) guidance, however, requires participating insurance companies offering separate accounts to vote shares proportionally in accordance with the instructions of the contract owners whose investments are funded by shares of each Fund or class.

  The Fund’s investment objective is capital growth.

  The Fund currently offers two classes of shares, Series I and Series II, both of which are offered to insurance company separate accounts funding variable annuity contracts and variable life insurance policies (“variable products”).

  The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements.

A.

Security Valuations — Securities, including restricted securities, are valued according to the following policy.

A security listed or traded on an exchange (except convertible bonds) is valued at its last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales or official closing price on a particular day, the security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based on prices furnished by independent pricing services or market makers. When such securities are valued by an independent pricing service they may be considered fair valued. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean between the last bid and ask prices from the exchange on which they are principally traded. Options not listed on an exchange are valued by an independent source at the mean between the last bid and ask prices. For purposes of determining net asset value per share, futures and option contracts generally are valued 15 minutes after the close of the customary trading session of the New York Stock Exchange (“NYSE”).

AIM V.I. Leisure Fund

	Investments in open-end and closed-end registered investment companies that do not trade on an exchange are valued at the end of day net asset value per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded.
	Debt obligations (including convertible bonds) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution-size trading in similar groups of securities, developments related to specific securities, dividend rate, yield, quality, type of issue, coupon rate, maturity, individual trading characteristics and other market data. Short-term obligations, including commercial paper, having 60 days or less to maturity are recorded at amortized cost which approximates value. Debt securities are subject to interest rate and credit risks. In addition, all debt securities involve some risk of default with respect to interest and/or principal payments.
	Foreign securities (including foreign exchange contracts) are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the NYSE. If market quotations are available and reliable for foreign exchange traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that are significant and make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economical upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
	Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities and Corporate Loans. The mean between the last bid and asked prices may be used to value debt obligations other than Corporate Loans.
	Securities for which market quotations are not readily available or are unreliable are valued at fair value as determined in good faith by or under the supervision of the Trust’s officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a security’s fair value.
	Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
B.	Securities Transactions and Investment Income — Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income is recorded on the accrual basis from settlement date. Dividend income is recorded on the ex-dividend date.
	The Fund may periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain/loss for investments no longer held and as unrealized gain/loss for investments still held.
	Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the realized and unrealized net gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the Fund’s net asset value and, accordingly, they reduce the Fund’s total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in the Statement of Operations and Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the adviser.
	The Fund allocates income and realized and unrealized capital gains and losses to a class based on the relative net assets of each class.
C.	Country Determination — For the purposes of making investment selection decisions and presentation in the Schedule of Investments, the investment adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuer’s securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted.
D.	Distributions — Distributions from income and net realized capital gain, if any, are generally paid to separate accounts of participating insurance companies annually and recorded on ex-dividend date.
E.	Federal Income Taxes — The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code necessary to qualify as a regulated investment company and to distribute substantially all of the Fund’s taxable earnings to shareholders. As such, the Fund will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements.

AIM V.I. Leisure Fund

	The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.
F.	Expenses — Fees provided for under the Rule 12b-1 plan of a particular class of the Fund and which are directly attributable to that class are charged to the operations of such class. All other expenses are allocated among the classes based on relative net assets.
G.	Accounting Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print, which is generally 45 days from the period-end date.
H.	Indemnifications — Under the Trust’s organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Fund’s servicing agreements, that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote.
I.	Other Risks — The Fund’s investments are concentrated in a comparatively narrow segment of the economy. Consequently, the Fund may tend to be more volatile than other mutual funds, and the value of the Fund’s investments may tend to rise and fall more rapidly.
	The leisure sector depends on consumer discretionary spending, which generally falls during economic downturns.
J.	Securities Lending — The Fund may lend portfolio securities having a market value up to one-third of the Fund’s total assets. Such loans are secured by collateral equal to no less than the market value of the loaned securities determined daily by the securities lending provider. Such collateral will be cash or debt securities issued or guaranteed by the U.S. Government or any of its sponsored agencies. Cash collateral received in connection with these loans is invested in short-term money market instruments or affiliated money market funds and is shown as such on the Schedule of Investments. It is the Fund’s policy to obtain additional collateral from or return excess collateral to the borrower by the end of the next business day, following the valuation date of the securities loaned. Therefore, the value of the collateral held may be temporarily less than the value of the securities on loan. Lending securities entails a risk of loss to the Fund if and to the extent that the market value of the securities loaned were to increase and the borrower did not increase the collateral accordingly, and the borrower fails to return the securities. Upon the failure of the borrower to return the securities, collateral may be liquidated and the securities may be purchased on the open market to replace the loaned securities. The Fund could experience delays and costs in gaining access to the collateral. The Fund bears the risk of any deficiency in the amount of the collateral available for return to the borrower due to any loss on the collateral invested. Dividends received on cash collateral investments for securities lending transactions, which are net of compensation to counterparties, is included in Dividends from affiliates on the Statement of Operations. The aggregate value of securities out on loan is shown as a footnote on the Statement of Assets and Liabilities, if any.
K.	Foreign Currency Translations — Foreign currency is valued at the close of the NYSE based on quotations posted by banks and major currency dealers. Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at date of valuation. Purchases and sales of portfolio securities (net of foreign taxes withheld on disposition) and income items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. The Fund does not separately account for the portion of the results of operations resulting from changes in foreign exchange rates on investments and the fluctuations arising from changes in market prices of securities held. The combined results of changes in foreign exchange rates and the fluctuation of market prices on investments (net of estimated foreign tax withholding) are included with the net realized and unrealized gain or loss from investments in the Statement of Operations. Reported net realized foreign currency gains or losses arise from (i) sales of foreign currencies, (ii) currency gains or losses realized between the trade and settlement dates on securities transactions, and (iii) the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign currency gains and losses arise from changes in the fair values of assets and liabilities, other than investments in securities at fiscal period end, resulting from changes in exchange rates.
	The Fund may invest in foreign securities which may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable.
L.	Foreign Currency Contracts — The Fund may enter into foreign currency contracts to manage or minimize currency or exchange rate risk. The Fund may also enter into foreign currency contracts for the purchase or sale of a security denominated in a foreign currency in order to “lock in” the U.S. dollar price of that security. A foreign currency contract is an obligation to purchase or sell a specific currency for an agreed-upon price at a future date. The use of foreign currency contracts does not eliminate fluctuations in the price of the underlying securities the Fund owns or intends to acquire but establishes a rate of exchange in advance. Fluctuations in the value of these contracts are measured by the difference in the contract date and reporting date exchange rates and are recorded as unrealized appreciation (depreciation) until the contracts are closed. When the contracts are closed, realized gains (losses) are recorded. Realized and unrealized gains (losses) on the contracts are included in the Statement of Operations. The primary risks associated with foreign currency contracts include failure of the counterparty to meet the terms of the contract and the value of the foreign currency changing unfavorably. These risks may be in excess of the amounts reflected in the Statement of Assets and Liabilities.

AIM V.I. Leisure Fund

NOTE 2—Advisory Fees and Other Fees Paid to Affiliates

The Trust has entered into a master investment advisory agreement with Invesco Advisers, Inc. (the “Adviser” or “Invesco”). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Adviser based on the annual rate of the Fund’s average daily net assets as follows:

Average Net Assets	Rate
First $250 million		0	.75%
Next $250 million		0	.74%
Next $500 million		0	.73%
Next $1.5 billion		0	.72%
Next $2.5 billion		0	.71%
Next $2.5 billion		0	.70%
Next $2.5 billion		0	.69%
Over $10 billion		0	.68%

  Under the terms of a master sub-advisory agreement approved by shareholders of the Funds between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Trimark Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Funds, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide discretionary investment management services to each Fund based on the percentage of assets allocated to such Sub-Adviser(s).

  On December 31, 2009, Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc., Invesco Private Asset Management, Inc. and Invesco Global Asset Management (N.A.), Inc. merged into Invesco Institutional (N.A.), Inc. and the consolidated adviser firm was renamed Invesco Advisers, Inc.

  The Adviser has contractually agreed to waive advisory fees and/or reimburse expenses of all shares to the extent necessary to limit total annual fund operating expenses after fee waiver (excluding certain items discussed below) of Series I shares to 1.01% and Series II shares to 1.26% of average daily net assets, through at least April 30, 2011. In determining the Adviser’s obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the total annual fund operating expenses after fee waiver to exceed the numbers reflected above: (1) interest; (2) taxes; (3) dividend expense on short sales; (4) extraordinary items or non-routine items; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. The Board of Trustees or Invesco may terminate the fee waiver arrangement at any time.

  Further, the Adviser has contractually agreed, through at least June 30, 2010, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash (excluding investments of cash collateral from securities lending) in such affiliated money market funds.

  For the year ended December 31, 2009, the Adviser waived advisory fees of $133,826.

  At the request of the Trustees of the Trust, Invesco Ltd. agreed to reimburse expenses incurred by the Fund in connection with market timing matters in the AIM Funds, which may include legal, audit, shareholder reporting, communications and trustee expenses. For the year ended December 31, 2009, Invesco Ltd. did not reimburse any expenses.

  The Trust has entered into a master administrative services agreement with Invesco pursuant to which the Fund has agreed to pay Invesco a fee for costs incurred in providing accounting services and fund administrative services to the Fund and to reimburse Invesco for administrative services fees paid to insurance companies that have agreed to provide services to the participants of separate accounts. These administrative services provided by the insurance companies may include, among other things: the printing of prospectuses, financial reports and proxy statements and the delivery of the same to existing participants; the maintenance of master accounts; the facilitation of purchases and redemptions requested by the participants; and the servicing of participants’ accounts. Pursuant to such agreement, for the year ended December 31, 2009, Invesco was paid $50,000 for accounting and fund administrative services and reimbursed $45,528 for services provided by insurance companies.

  The Trust has entered into a transfer agency and service agreement with Invesco Aim Investment Services, Inc. (“IAIS”) pursuant to which the Fund has agreed to pay IAIS a fee for providing transfer agency and shareholder services to the Fund and reimburse IAIS for certain expenses incurred by IAIS in the course of providing such services. For the year ended December 31, 2009, expenses incurred under the agreement are shown in the Statement of Operations as transfer agent fees.

  The Trust has entered into a master distribution agreement with Invesco Aim Distributors, Inc. (“IADI”) to serve as the distributor for the Fund. The Trust has adopted a plan pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund’s Series II shares (the “Plan”). The Fund, pursuant to the Plan, pays IADI compensation at the annual rate of 0.25% of the Fund’s average daily net assets of Series II shares. Of the Plan payments, up to 0.25% of the average daily net assets of the Series II shares may be paid to insurance companies who furnish continuing personal shareholder services to customers who purchase and own Series II shares of the Fund. For the year ended December 31, 2009, expenses incurred under the Plan are detailed in the Statement of Operations as distribution fees.

  Certain officers and trustees of the Trust are officers and directors of Invesco, IAIS and/or IADI.

AIM V.I. Leisure Fund

NOTE 3—Additional Valuation Information

Generally Accepted Accounting Principles (“GAAP”) defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3) generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment’s assigned level:

Level 1 —	Prices are determined using quoted prices in an active market for identical assets.
Level 2 —	Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk and others.
Level 3 —	Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information.

  The following is a summary of the tiered valuation input levels, as of December 31, 2009. The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.

	Level 1		Level 2		Level 3		Total
Equity Securities	$	19,375,166	$	1,406,455	$	—	$	20,781,621

NOTE 4—Security Transactions with Affiliated Funds

The Fund is permitted to purchase or sell securities from or to certain other AIM Funds under specified conditions outlined in procedures adopted by the Board of Trustees of the Trust. The procedures have been designed to ensure that any purchase or sale of securities by the Fund from or to another fund or portfolio that is or could be considered an affiliate by virtue of having a common investment adviser (or affiliated investment advisers), common Trustees and/or common officers complies with Rule 17a-7 of the 1940 Act. Further, as defined under the procedures, each transaction is effected at the current market price. Pursuant to these procedures, for the year ended December 31, 2009, the Fund engaged in securities purchases of $1,860.

NOTE 5—Trustees’ and Officers’ Fees and Benefits

“Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and “Trustees’ and Officers’ Fees and Benefits” also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various AIM Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees are eligible to participate in a retirement plan that provides for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former Trustees who also participate in a retirement plan and receive benefits under such plan. “Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund.

  During the year ended December 31, 2009, the Fund paid legal fees of $2,804 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A member of that firm is a Trustee of the Trust.

NOTE 6—Cash Balances

The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with The State Street Bank and Trust Company, the custodian bank. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (i) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (ii) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.

NOTE 7—Distributions to Shareholders and Tax Components of Net Assets

Tax Character of Distributions to Shareholders Paid During the Years Ended December 31, 2009 and 2008:

	2009		2008
Ordinary income	$	347,970	$	770,666
Long-term capital gain		—		4,520,706
Total distributions	$	347,970	$	5,291,372

AIM V.I. Leisure Fund

Tax Components of Net Assets at Period-End:

	2009
Undistributed ordinary income	$	103,408
Net unrealized appreciation — investments		2,851,773
Net unrealized appreciation (depreciation) — other investments		(88	)
Temporary book/tax differences		(12,204	)
Capital loss carryforward		(5,827,017	)
Post-October deferrals		(1,890	)
Shares of beneficial interest		23,227,676
Total net assets	$	20,341,658

  The difference between book-basis and tax-basis unrealized appreciation (depreciation) is due to differences in the timing of recognition of gains and losses on investments for tax and book purposes. The Fund’s net unrealized appreciation (depreciation) difference is attributable primarily to wash sales.

  The temporary book/tax differences are a result of timing differences between book and tax recognition of income and/or expenses. The Fund’s temporary book/tax differences are the result of the trustee deferral of compensation and retirement plan benefits.

  Capital loss carryforward is calculated and reported as of a specific date. Results of transactions and other activity after that date may affect the amount of capital loss carryforward actually available for the Fund to utilize. The ability to utilize capital loss carryforward in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.

  The Fund has a capital loss carryforward as of December 31, 2009 which expires as follows:

	Capital Loss
Expiration	Carryforward*
December 31, 2016	$	850,432
December 31, 2017		4,976,585
Total capital loss carryforward	$	5,827,017

*  Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code.

NOTE 8—Investment Securities

The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the year ended December 31, 2009 was $10,660,339 and $12,356,777, respectively. Cost of investments on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed Federal income tax reporting period-end.

Unrealized Appreciation (Depreciation) of Investment Securities on a Tax Basis
Aggregate unrealized appreciation of investment securities	$	3,907,210
Aggregate unrealized (depreciation) of investment securities		(1,055,437	)
Net unrealized appreciation of investment securities	$	2,851,773
Cost of investments for tax purposes is $17,929,848.

NOTE 9—Reclassification of Permanent Differences

Primarily as a result of differing book/tax treatment of foreign currency transactions, on December 31, 2009, undistributed net investment income (loss) was decreased by $19,431; undistributed net realized gain (loss) was increased by $19,431. This reclassification had no effect on the net assets of the Fund.

AIM V.I. Leisure Fund

NOTE 10—Share Information

	Summary of Share Activity
	Years Ended December 31,
	2009(a)						2008
	Shares			Amount			Shares			Amount
Sold:
Series I		15,116		$	86,339			32,750		$	235,861
Series II		195			1,057			60			571
Issued as reinvestment of dividends:
Series I		54,350			347,842			1,102,028			5,289,732
Series II		20			128			341			1,639
Reacquired:
Series I		(553,001	)		(2,991,011	)		(909,436	)		(9,349,765	)
Series II		(5	)		(27	)		(2	)		(13	)
Net increase (decrease) in share activity		(483,325	)	$	(2,555,672	)		225,741		$	(3,821,975	)

^(a) There is an entity that is a record owner of more than 5% of the outstanding shares of the Fund that owns 99% of the outstanding shares of the Fund. The Fund and the Fund’s principal underwriter or adviser, are parties to participation agreements with this entity whereby this entity sells units of interest in separate accounts funding variable products that are invested in the Fund. The Fund, Invesco and/or Invesco affiliates may make payments to this entity, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as, securities brokerage, third party record keeping and account servicing and administrative services. The Trust has no knowledge as to whether all or any portion of the shares owned of record by this entity is also owned beneficially.

NOTE 11—Financial Highlights

The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.

																												Ratio of			Ratio of
																												expenses			expenses
						Net gains																						to average			to average net			Ratio of net
	Net asset					(losses) on						Dividends			Distributions													net assets			assets without			investment
	value,		Net			securities (both			Total from			from net			from net						Net asset					Net assets,		with fee waivers			fee waivers			income
	beginning		investment			realized and			investment			investment			realized			Total			value, end		Total			end of period		and/or expenses			and/or expenses			to average			Portfolio
	of period		income			unrealized)			operations			income			gains			Distributions			of period		Return(a)			(000s omitted)		absorbed			absorbed			net assets			turnover(b)
Series I
Year ended 12/31/09	$	5.02	$	0.04	(c)	$	1.60		$	1.64		$	(0.11	)	$	—		$	(0.11	)	$	6.55		32.78	%	$	20,333		1.01	%(d)		1.74	%(d)		0.69	%(d)		61	%
Year ended 12/31/08		12.67		0.12	(c)		(5.67	)		(5.55	)		(0.12	)		(1.98	)		(2.10	)		5.02		(43.04	)		18,003		1.01			1.44			1.15			7
Year ended 12/31/07		13.82		0.09			(0.15	)		(0.06	)		(0.24	)		(0.85	)		(1.09	)		12.67		(0.79	)		42,593		1.01			1.28			0.50			15
Year ended 12/31/06		11.86		0.07			2.83			2.90			(0.16	)		(0.78	)		(0.94	)		13.82		24.61			52,820		1.01			1.26			0.54			14
Year ended 12/31/05		12.38		0.04			(0.19	)		(0.15	)		(0.14	)		(0.23	)		(0.37	)		11.86		(1.19	)		54,192		1.16			1.31			0.34			32
Series II
Year ended 12/31/09		5.02		0.02	(c)		1.61			1.63			(0.10	)		—			(0.10	)		6.55		32.47			9		1.26	(d)		1.99	(d)		0.44	(d)		61
Year ended 12/31/08		12.63		0.09	(c)		(5.64	)		(5.55	)		(0.08	)		(1.98	)		(2.06	)		5.02		(43.17	)		6		1.26			1.69			0.90			7
Year ended 12/31/07		13.78		0.05			(0.15	)		(0.10	)		(0.20	)		(0.85	)		(1.05	)		12.63		(1.13	)		9		1.26			1.53			0.25			15
Year ended 12/31/06		11.84		0.04			2.82			2.86			(0.14	)		(0.78	)		(0.92	)		13.78		24.28			14		1.26			1.51			0.29			14
Year ended 12/31/05		12.37		0.02			(0.19	)		(0.17	)		(0.13	)		(0.23	)		(0.36	)		11.84		(1.37	)		11		1.36			1.56			0.14			32

(a)	Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Total returns are not annualized for periods less than on year and do not reflect charges assessed in connection with a variable product, which if included would reduce total returns, if applicable.
(b)	Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable.
(c)	Calculated using average shares outstanding.
(d)	Ratios are based on average daily net assets (000’s omitted) of $18,218 and $7 for Series I and Series II shares, respectively.

AIM V.I. Leisure Fund

Report of Independent Registered Public Accounting Firm

To the Board of Trustees of AIM Variable Insurance Funds

and Shareholders of AIM V.I. Leisure Fund:

In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of AIM V.I. Leisure Fund (one of the funds constituting AIM Variable Insurance Funds, hereafter referred to as the “Fund”) at December 31, 2009, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at December 31, 2009 by correspondence with the custodian, provide a reasonable basis for our opinion.

PRICEWATERHOUSECOOPERS LLP

February 10, 2010

Houston, Texas

AIM V.I. Leisure Fund

Calculating your ongoing Fund expenses

Example

As a shareholder of the Fund, you incur ongoing costs, including management fees; distribution and/or service fees (12b-1); and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period July 1, 2009, through December 31, 2009.

  The actual and hypothetical expenses in the examples below do not represent the effect of any fees or other expenses assessed in connection with a variable product; if they did, the expenses shown would be higher while the ending account values shown would be lower.

Actual expenses

The table below provides information about actual account values and actual expenses. You may use the information in this table, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the

  number in the table under the heading entitled “Actual Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical example for comparison purposes

The table below also provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return.

  The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

  Please note that the expenses shown in the table are meant to highlight your ongoing costs. Therefore, the hypothetical information is useful in comparing ongoing costs, and will not help you determine the relative total costs of owning different funds.

							HYPOTHETICAL
							(5% annual return before
			ACTUAL				expenses)
	Beginning		Ending		Expenses		Ending		Expenses		Annualized
	Account Value		Account Value		Paid During		Account Value		Paid During		Expense
Class	(07/01/09)		(12/31/09)1		Period2		(12/31/09)		Period2		Ratio
Series I	$	1,000.00	$	1,236.70	$	5.69	$	1,020.11	$	5.14		1.01	%
Series II		1,000.00		1,236.10		7.10		1,018.85		6.41		1.26

1	The actual ending account value is based on the actual total return of the Fund for the period July 1, 2009 through December 31, 2009, after actual expenses and will differ from the hypothetical ending account value which is based on the Fund’s expense ratio and a hypothetical annual return of 5% before expenses.
2	Expenses are equal to the Fund’s annualized expense ratio as indicated above multiplied by the average account value over the period, multiplied by 184/365 to reflect the most recent fiscal half year.

AIM V.I. Leisure Fund

Tax Information

Form 1099-DIV, Form 1042-S and other year-end tax information provide shareholders with actual calendar year amounts that should be included in their tax returns. Shareholders should consult their tax advisors.

  The following distribution information is being provided as required by the Internal Revenue Code or to meet a specific state’s requirement.

  The Fund designates the following amounts or, if subsequently determined to be different, the maximum amount allowable for its fiscal year ended December 31, 2009:

Federal and State Income Tax
Corporate Dividends Received Deduction*	69.43%

*  The above percentages are based on ordinary income dividends paid to shareholders during the Fund’s fiscal year.

AIM V.I. Leisure Fund

Trustees and Officers

The address of each trustee and officer of AIM Variable Insurance Funds (the “Trust”), is 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173. Each trustee oversees 105 portfolios in the AIM Funds complex. The trustees serve for the life of the Trust, subject to their earlier death, incapacitation, resignation, retirement or removal as more specifically provided in the Trust’s organizational documents. Each officer serves for a one year term or until their successors are elected and qualified. Column two below includes length of time served with predecessor entities, if any.

Name, Year of Birth and	Trustee and/		Principal Occupation(s)	Other Directorship(s)
Position(s) Held with the Trust	or Officer		During Past 5 Years	Held by Trustee
	Since
Interested Persons
Martin L. Flanagan1 — 1960 Trustee	2007		Executive Director, Chief Executive Officer and President, Invesco Ltd. (ultimate parent of Invesco Aim and a global investment management firm); Adviser to the Board, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Trustee, The AIM Family of Funds®; Board of Governors, Investment Company Institute; and Member of Executive Board, SMU Cox School of Business	None
			Formerly: Chairman, Invesco Aim Advisors, Inc. (registered investment adviser); Director, Chairman, Chief Executive Officer and President, IVZ Inc. (holding company), INVESCO Group Services, Inc. (service provider) and Invesco North American Holdings, Inc. (holding company); Director, Chief Executive Officer and President, Invesco Holding Company Limited (parent of Invesco Aim and a global investment management firm); Director, Invesco Ltd.; Chairman and Vice Chairman, Investment Company Institute
Philip A. Taylor2 — 1954 Trustee, President and Principal Executive Officer	2006		Head of North American Retail and Senior Managing Director, Invesco Ltd.; Director, Co-Chairman, Co-President and Co- Chief Executive Officer, Invesco Advisers, inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Director, Chief Executive Officer and President, Invesco Aim Advisors, Inc. and 1371 Preferred Inc. (holding company); Director, Chairman, Chief Executive Officer and President, Invesco Aim Management Group, Inc. (financial services holding company); Director, Co-Chairman, Co-President and Co-Chief Executive Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Director and President, INVESCO Funds Group, Inc. (registered investment adviser and registered transfer agent) and AIM GP Canada Inc. (general partner for limited partnerships); Director, Invesco Aim Distributors, Inc. (registered broker dealer); Director and Chairman, Invesco Aim Investment Services, Inc. (registered transfer agent) and INVESCO Distributors, Inc. (registered broker dealer); Director, President and Chairman, INVESCO Inc. (holding company) and Invesco Canada Holdings Inc. (holding company); Chief Executive Officer, AIM Trimark Corporate Class Inc. (corporate mutual fund company) and AIM Trimark Canada Fund Inc. (corporate mutual fund company); Director and Chief Executive Officer, Invesco Trimark Ltd./Invesco Trimark Ltèe (registered investment adviser and registered transfer agent) and Invesco Trimark Dealer Inc. (registered broker dealer); Trustee, President and Principal Executive Officer, The AIM Family of Funds® (other than AIM Treasurer’s Series Trust and Short-Term Investments Trust); Trustee and Executive Vice President, The AIM Family of Funds® (AIM Treasurer’s Series Trust and Short-Term Investments Trust only); and Manager, Invesco PowerShares Capital Management LLC	None
			Formerly: Manager, Invesco PowerShares Capital Management LLC; Director, Chief Executive Officer and President, Invesco Aim Advisors, Inc.; Director, Chairman, Chief Executive Officer and President, Invesco Aim Capital Management, Inc.; President, Invesco Trimark Dealer Inc. and Invesco Trimark Ltd./Invesco Trimark Ltèe; Director and President, AIM Trimark Corporate Class Inc. and AIM Trimark Canada Fund Inc.; Senior Managing Director, Invesco Holding Company Limited; Trustee and Executive Vice President, Tax-Free Investments Trust; Director and Chairman, Fund Management Company (former registered broker dealer); President and Principal Executive Officer, The AIM Family of Funds® (AIM Treasurer’s Series Trust, Short-Term Investments Trust and Tax-Free Investments Trust only); President, AIM Trimark Global Fund Inc. and AIM Trimark Canada Fund Inc.
Independent Trustees
Bruce L. Crockett — 1944 Trustee and Chair	1993		Chairman, Crockett Technology Associates (technology consulting company)	ACE Limited (insurance company); Captaris, Inc. (unified messaging provider); and Investment Company Institute
Bob R. Baker — 1936 Trustee	2004		Retired	None
Frank S. Bayley — 1939 Trustee	2001		Retired Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios)	None
James T. Bunch — 1942 Trustee	2004		Founder, Green, Manning & Bunch Ltd., (investment banking firm)	Board of Governors, Western Golf Association/Evans
				Scholars Foundation and Executive Committee, United States Golf Association
Albert R. Dowden — 1941 Trustee	2000		Director of a number of public and private business corporations, including the Boss Group, Ltd. (private investment and management); Reich & Tang Funds (registered investment company); and Homeowners of America Holding Corporation/Homeowners of America Insurance Company (property casualty company)	Board of Nature’s Sunshine Products, Inc.
			Formerly: Director, Continental Energy Services, LLC (oil and gas pipeline service); Director, CompuDyne Corporation (provider of product and services to the public security market) and Director, Annuity and Life Re (Holdings), Ltd. (reinsurance company); Director, President and Chief Executive Officer, Volvo Group North America, Inc.; Senior Vice President, AB Volvo; Director of various public and private corporations
Jack M. Fields — 1952 Trustee	1997		Chief Executive Officer, Twenty First Century Group, Inc. (government affairs company); and Owner and Chief Executive Officer, Dos Angelos Ranch, L.P. (cattle, hunting, corporate entertainment), Discovery Global Education Fund (non-profit) and Cross Timbers Quail Research Ranch (non-profit)	Administaff
			Formerly: Chief Executive Officer, Texana Timber LP (sustainable forestry company)
Carl Frischling — 1937 Trustee	1993		Partner, law firm of Kramer Levin Naftalis and Frankel LLP	Director, Reich & Tang Funds (16 portfolios)
Prema Mathai-Davis — 1950 Trustee	1998		Retired	None
Lewis F. Pennock — 1942 Trustee		1993	Partner, law firm of Pennock & Cooper	None
Larry Soll — 1942 Trustee	2004		Retired	None
Raymond Stickel, Jr. — 1944 Trustee	2005		Retired Formerly: Director, Mainstay VP Series Funds, Inc. (25 portfolios)	None

1	Mr. Flanagan is considered an interested person of the Trust because he is an officer of the adviser to the Trust, and an officer and a director of Invesco Ltd., ultimate parent of the adviser to the Trust.
2	Mr. Taylor is considered an interested person of the Trust because he is an officer and a director of the adviser to, and a director of the principal underwriter of, the Trust.

T-1

Trustees and Officers – (continued)

Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Other Directorship(s)
Position(s) Held with the Trust	or Officer	During Past 5 Years	Held by Trustee
	Since
Other Officers
Russell C. Burk — 1958 Senior Vice President and Senior Officer	2005	Senior Vice President and Senior Officer of The AIM Family of Funds®	N/A
John M. Zerr — 1962 Senior Vice President, Chief Legal Officer and Secretary	2006	Director, Senior Vice President, Secretary and General Counsel, Invesco Aim Management Group, Inc., Senior Vice President, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Director, Senior Vice President and Secretary, Invesco Aim Distributors, Inc.; Director, Vice President and Secretary, Invesco Aim Investment Services, Inc. and INVESCO Distributors, Inc.; Director and Vice President, INVESCO Funds Group, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The AIM Family of Funds®; and Manager, Invesco PowerShares Capital Management LLC	N/A
		Formerly: Director, Senior Vice President, General Counsel and Secretary, Invesco Aim Advisors, Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco Aim Capital Management, Inc.; Chief Operating Officer and General Counsel, Liberty Ridge Capital, Inc. (an investment adviser); Vice President and Secretary, PBHG Funds (an investment company) and PBHG Insurance Series Fund (an investment company); Chief Operating Officer, General Counsel and Secretary, Old Mutual Investment Partners (a broker-dealer); General Counsel and Secretary, Old Mutual Fund Services (an administrator) and Old Mutual Shareholder Services (a shareholder servicing center); Executive Vice President, General Counsel and Secretary, Old Mutual Capital, Inc. (an investment adviser); and Vice President and Secretary, Old Mutual Advisors Funds (an investment company)
Lisa O. Brinkley — 1959 Vice President	2004	Global Compliance Director, Invesco Ltd.; Chief Compliance Officer, Invesco Aim Distributors, Inc. and Invesco Aim Investment Services, Inc.; and Vice President, The AIM Family of Funds® Formerly: Senior Vice President, Invesco Aim Management Group, Inc.; Senior Vice President and Chief Compliance Officer, Invesco Aim Advisors, Inc. and The AIM Family of Funds®; Vice President and Chief Compliance Officer, Invesco Aim Capital Management, Inc. and Invesco Aim Distributors, Inc.; Vice President, Invesco Aim Investment Services, Inc. and Fund Management Company	N/A
Kevin M. Carome — 1956 Vice President	2003	General Counsel, Secretary and Senior Managing Director, Invesco Ltd.; Director, Invesco Holding Company Limited and INVESCO Funds Group, Inc.; Director and Executive Vice President, IVZ, Inc., Invesco Group Services, Inc., Invesco North American Holdings, Inc. and Invesco Investments (Bermuda) Ltd.; Director and Secretary, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); and Vice President, The AIM Family of Funds®	N/A
		Formerly: Senior Managing Director and Secretary, Invesco North American Holdings, Inc.; Vice President and Secretary, IVZ, Inc. and Invesco Group Services, Inc.; Senior Managing Director and Secretary, Invesco Holding Company Limited; Director, Senior Vice President, Secretary and General Counsel, Invesco Aim Management Group, Inc. and Invesco Aim Advisors, Inc.; Senior Vice President, Invesco Aim Distributors, Inc.; Director, General Counsel and Vice President, Fund Management Company; Vice President, Invesco Aim Capital Management, Inc. and Invesco Aim Investment Services, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The AIM Family of Funds®; Director and Vice President, INVESCO Distributors, Inc.; and Chief Executive Officer and President, INVESCO Funds Group, Inc.
Sheri Morris — 1964 Vice President, Treasurer and Principal Financial Officer	1999	Vice President, Treasurer and Principal Financial Officer, The AIM Family of Funds®; and Vice President, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.) Formerly: Vice President, Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.; Assistant Vice President and Assistant Treasurer, The AIM Family of Funds® and Assistant Vice President, Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A
Karen Dunn Kelley — 1960 Vice President	1993	Head of Invesco’s World Wide Fixed Income and Cash Management Group; Senior Vice President, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Executive Vice President, Invesco Aim Distributors, Inc.; Senior Vice President, Invesco Aim Management Group, Inc.; and Director, Invesco Mortgage Capital Inc.; Vice President, The AIM Family of Funds® (other than AIM Treasurer’s Series Trust and Short-Term Investments Trust); and President and Principal Executive Officer, The AIM Family of Funds® (AIM Treasurer’s Series Trust and Short-Term Investments Trust only) Formerly: Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Director of Cash Management and Senior Vice President, Invesco Aim Advisors, Inc. and Invesco Aim Capital Management, Inc.; President and Principal Executive Officer, Tax-Free Investments Trust; Director and President, Fund Management Company; Chief Cash Management Officer, Director of Cash Management, Senior Vice President, and Managing Director, Invesco Aim Capital Management, Inc.; Director of Cash Management, Senior Vice President, and Vice President, Invesco Aim Advisors, Inc. and The AIM Family of Funds® (AIM Treasurer’s Series Trust, Short-Term Investments Trust and Tax-Free Investments Trust only)	N/A
Lance A. Rejsek — 1967 Anti-Money Laundering Compliance Officer	2005	Anti-Money Laundering Compliance Officer, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Invesco Aim Distributors, Inc., Invesco Aim Investment Services, Inc., and The AIM Family of Funds®	N/A
		Formerly: Anti-Money Laundering Compliance Officer, Fund Management Company, Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.
Todd L. Spillane — 1958 Chief Compliance Officer	2006	Senior Vice President, Invesco Aim Management Group, Inc.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Chief Compliance Officer, The AIM Family of Funds®, INVESCO Private Capital Investments, Inc. (holding company), Invesco Private Capital, Inc. (registered investment adviser) and Invesco Senior Secured Management, Inc. (registered investment adviser); Vice President, Invesco Aim Distributors, Inc. and Invesco Aim Investment Services, Inc.	N/A
		Formerly: Senior Vice President and Chief Compliance Officer, Invesco Aim Advisors, Inc. and Invesco Aim Capital Management, Inc.; Chief Compliance Officer, Invesco Global Asset Management (N.A.), Inc.; Vice President, Invesco Aim Capital Management, Inc. and Fund Management Company

The Statement of Additional Information of the Trust includes additional information about the Fund’s Trustees and is available upon request, without charge, by calling 1.800.959.4246. Please refer to the Fund’s prospectus for information on the Fund’s sub-advisers.

Office of the Fund	Investment Adviser	Distributor	Auditors
11 Greenway Plaza, Suite 100	Invesco Advisers, Inc.	Invesco Aim Distributors, Inc.	PricewaterhouseCoopers LLP
Houston, TX 77046-1173	1555 Peachtree Street, N.E.	11 Greenway Plaza, Suite 100	1201 Louisiana Street, Suite 2900
	Atlanta, GA 30309	Houston, TX 77046-1173	Houston, TX 77002-5678
Counsel to the Fund	Counsel to the	Transfer Agent	Custodian
Stradley Ronon Stevens & Young, LLP	Independent Trustees	Invesco Aim Investment Services, Inc.	State Street Bank and Trust Company
2600 One Commerce Square	Kramer, Levin, Naftalis & Frankel LLP	P.O. Box 4739	225 Franklin
Philadelphia, PA 19103	1177 Avenue of the Americas	Houston, TX 77210-4739	Boston, MA 02110-2801
	New York, NY 10036-2714

T-2

AIM V.I. Mid Cap Core Equity Fund

Annual Report to Shareholders n December 31, 2009

The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter-ends. For the second and fourth quarters, the lists appear in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The Fund’s Form N-Q filings are available on the SEC website, sec.gov. Copies of the Fund’s Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers for the Fund are 811-07452 and 033-57340. The Fund’s most recent portfolio holdings, as filed on Form N-Q, have also been made available to insurance companies issuing variable annuity contracts and variable life insurance policies (“variable products”) that invest in the Fund.

A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, from our Client Services department at 800 410 4246 or on the Invesco Aim website, invescoaim.com. On the home page, scroll down and click on Proxy Policy. The information is also available on the SEC website, sec.gov.

Information regarding how the Fund voted proxies related to its portfolio securities during the 12 months ended June 30, 2009, is available at our website, invescoaim.com. Click the About Us tab at the top of the home page; click Legal Information; and then click Proxy Voting Search. The information is also available on the SEC website, sec.gov.

Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Aim Distributors, Inc. is the U.S. distributor for Invesco Ltd.’s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd.

This report must be accompanied or preceded by a currently effective Fund prospectus and variable product prospectus, which contain more complete information, including sales charges and expenses. Investors should read each carefully before investing.

Invesco Aim Distributors, Inc.

NOT FDIC INSURED  |  MAY LOSE VALUE  |  NO BANK GUARANTEE

Management’s Discussion of Fund Performance

Performance summary

For the 12 months ended December 31, 2009, AIM V.I. Mid Cap Core Equity Fund’s returns, excluding variable product issuer charges, compared favorably to the broad market as measured by the S&P 500 Index, but lagged the Russell Midcap Index, the Fund’s style-specific benchmark.

    The Fund’s relative results were primarily due to its large allocation to cash, which muted returns in a rising market, and an underweight position in the consumer discretionary sector. While stock selection in the information technology (IT) sector detracted from results relative to the benchmark, IT was the largest contributor to the Fund’s absolute returns. The energy and health care sectors also contributed to the Fund’s absolute returns, while the telecommunication services sector was the largest detractor.

   Your Fund’s long-term performance appears later in this report.

Fund vs. Indexes

Total returns, 12/31/08 to 12/31/09, excluding variable product issuer charges.
If variable product issuer charges were included, returns would be lower.

Series I Shares	30.21	%
Series II Shares	29.85
S&P 500 Index▼ (Broad Market Index)	26.47
Russell Midcap Index▼ (Style-Specific Index)	40.48
Lipper VUF Mid-Cap Core Funds Index▼ (Peer Group Index)	33.03

^▼ Lipper Inc.

How we invest

We seek to manage your Fund as what we term a “conservative cornerstone” – a stable foundational component within a well-diversified portfolio of assets that provides attractive upside participation during buoyant equity markets and downside protection during weak equity markets. As part of a well-diversified asset allocation strategy, the Fund is intended to complement more aggressive or cyclical investment strategies.

   We conduct thorough fundamental research of companies and their businesses to gain a deeper understanding of their prospects, growth potential and return on invested capital characteristics. The process we use to identify potential investments for the Fund includes three phases: financial analysis, business analysis and valuation analysis.

   Financial analysis provides insights into historical returns on invested capital, a key indicator of business quality, and historical capital allocation, a key indicator of management quality. Business analysis, which evaluates the competitive landscape and any structural or cyclical business opportunities or threats, allows us to identify key revenue, profit and return drivers of the company. Both the financial and business analyses serve as a basis to construct valuation models that help us appraise a company’s fair value. In our valuation analysis, we use three primary techniques, including discounted cash flow, traditional valuation multiples and net asset value.

   We consider selling a stock when it exceeds our target price, we have not seen a demonstrable improvement in fundamentals or a more compelling investment opportunity exists.

Market conditions and your Fund

The year covered by this report was characterized by two dramatically different market environments. In early 2009, equity markets declined steeply as credit markets froze and risk premiums rose dramatically in response to the global recession. As central banks coordinated easing efforts and companies cut costs aggressively, access to liquidity improved and market valuations in both the credit and equity markets recovered from the March 2009 lows.

   Major equity indexes generated positive returns for the year, with economically sensitive sectors such as IT, consumer discretionary and materials delivering the highest returns, while the traditionally defensive telecommunication services, consumer staples and utilities sectors had some of the lowest returns.¹

   The largest contributor to the Fund’s results was Newfield Exploration, an oil and gas exploration and production fi rm. Newfield faced headwinds from depressed commodity prices. However, this was partially offset by the company’s successful oil hedges, high-returning oil fields, increased operating efficiencies and lower drilling costs. We believe the firm has an attractive, globally diversified drilling base that should position it well for a commodities recovery. While we believe energy is on the path to recovery as inventories stabilize, the demand picture is still somewhat uncertain. As such, our energy exposure was biased towards natural gas production and related services companies.

   Another large contributor to the Fund’s results was industrial conglomerate Tyco International, which operates in a variety of dissimilar industries such as security solutions, fire protection and fluid valves. The market downturn provided us an opportunity to build a larger position in the stock as it traded lower. As conditions improved later in the year, the company

Portfolio Composition
By sector
Health Care	19.7	%
Information Technology	15.8
Industrials	13.7
Energy	8.9
Consumer Staples	8.5
Financials	8.4
Consumer Discretionary	6.0
Materials	4.2
Telecommunication Services	1.0
Utilities	0.8
Money Market Funds Plus
Other Assets Less Liabilities	13.0

Top 10 Equity Holdings*
1.	Symantec Corp.	2.3	%
2.	People’s United Financial Inc.	2.2
3.	Henkel AG & Co. KGaA-Pfd.	2.0
4.	Safeway Inc.	1.9
5.	Zimmer Holdings, Inc.	1.8
6.	Sigma-Aldrich Corp.	1.8
7.	Precision Castparts Corp.	1.7
8.	Newfield Exploration Co.	1.6
9.	Progressive Corp. (The)	1.6
10.	Amdocs Ltd.	1.6

Total Net Assets	$488.4 million
Total Number of Holdings*		84

The Fund’s holdings are subject to change, and there is no assurance that the Fund will continue to hold any particular security.

* Excluding money market fund holdings.

AIM V.I. Mid Cap Core Equity Fund

reported good operating results due to improving margins and solid retention rates, and the stock performed well amid improving economic sentiment.

   Network storage company NetApp was another top contributor to results. We believe the company is well positioned as demand for data storage is growing rapidly throughout the world and at a faster rate than IT spending overall. The stock performed well during the year as the company continued to gain market share while maintaining better-than-expected margins during the downturn. As economic conditions improved and IT spending recovered later in the year, the company’s revenues recovered strongly and margins snapped back.

    The largest detractor from Fund performance was Alliance Data Systems. The company offers private label (non-bank) credit card and customer loyalty services to clients such as specialty retailers. With higher unemployment rates, credit card delinquencies have increased, and the company has been hurt by a high rate of charge-offs from bad debts. We eliminated this holding from the Fund in the early part of the year.

    Another detractor was Rockwell Automation, which produces industrial process-control equipment to make factories more efficient. The stock sold off sharply in early 2009 as investors fled cyclical industries in the face of mounting economic woes. While the company’s balance sheet and cash flows remained solid, the cyclical decline in demand caused revenues to shrink. We eliminated this holding from the Fund during the year.

   While the Fund was largely underexposed to financials during the credit crisis, we took the opportunity to invest in what we viewed as higher quality banks. However, Fund holding BB&T negatively affected the Fund’s results. Generally, we believed BB&T was a well-capitalized survivor of the credit crisis, as evidenced by the fact that it passed the federal “stress test” and repaid funds advanced under the government’s Troubled Asset Relief Program. While BB&T’s credit losses rose in 2009 (and will likely continue to rise), we attributed the stock’s poor performance more to the industry-wide downdraft than to company-specific factors. Nonetheless, we eliminated our position in BB&T as we perceived better relative opportunities elsewhere in the sector.

   Our cash weighting fluctuated during the year as we took advantage of market turmoil to invest in high quality companies that we believed had been unduly punished. As many of these companies

rallied sharply in the second half of 2009, we used the opportunity to take profits. Thus, the Fund’s cash weighting was up to approximately 13% of total assets at the end of the year. Our cash holdings benefited the Fund during the market downturn, and hindered returns during the rally.

   Maintaining a conservative approach is an enduring part of our investment strategy. In the face of significant market volatility, we sought judicious long-term investments in high quality businesses that are not heavily dependent on external sources of financing. At the end of the year, our largest sector weightings were in IT and health care. Our allocation to the consumer discretionary sector remained low, as we believed it will be difficult for many of these companies to recover to pre-crisis earnings levels in the near-term.

   We have recently endured one of the most challenging economic periods in recent history, and while the apparent end to the recession is encouraging, we believe that a long and perhaps uneven recovery lies ahead. Indeed, much of the recent economic improvement has been due to a reduced rate of deterioration, and a number of questions remain concerning employment, consumer spending, housing and the eventual removal of fiscal and monetary stimulus. For this reason, we believe that equity markets will remain trendless and volatility is likely to continue for the foreseeable future.

   Regardless of market conditions, our goal remains the same: to serve as a conservative cornerstone for investors’ portfolios, seeking to provide upside participation with downside protection, so that over a full market cycle the Fund may deliver favorable investment results with reduced risk.

1  Lipper Inc.

The views and opinions expressed in management’s discussion of Fund performance are those of Invesco Advisers, Inc. These views and opinions are subject to change at any time based on factors such as market and economic conditions. These views and opinions may not be relied upon as investment advice or recommendations, or as 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 Invesco Advisers, Inc. 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.

See important Fund and index disclosures later in this report.

Ronald Sloan
Chartered Financial Analyst, senior portfolio manager, is lead manager of AIM V.I. Mid Cap Core Equity Fund. Mr. Sloan has worked in the investment industry since 1971 and joined Invesco Aim in 1998. Mr. Sloan attended the University of Missouri, where he earned both a B.S. in business administration and an M.B.A.

Douglas Asiello
Chartered Financial Analyst, portfolio manager, is manager of AIM V.I. Mid Cap Core Equity Fund. He joined Invesco Aim in 2001. Mr. Asiello graduated summa cum laude with Phil Beta Kappa honors from Vanderbilt University, where he earned a B.A. in international relations and Spanish. He earned an M.B.A. with a concentration in finance from the Wharton School at the University of Pennsylvania. He also earned an M.A. in international management from the Joseph H. Lauder Institute of Management and International Studies.

Brian Nelson
Chartered Financial Analyst, portfolio manager, is manager of AIM V.I. Mid Cap Core Equity Fund. He began his investment career in 1988 and joined Invesco Aim in 2004. He earned a B.A. from the University of California-Santa Barbara and is a member of the CFA Society of San Francisco.

Assisted by the Mid/Large Cap Core Team

AIM V.I. Mid Cap Core Equity Fund

Your Fund’s Long-Term Performance

Results of a $10,000 Investment - Oldest Share Classes since Inception
Index data from 8/31/01, Fund data from 9/10/01

1 Lipper Inc.

Past performance cannot guarantee comparable future results.

   This chart, which is a logarithmic chart, presents the fluctuations in the value of the Fund and its indexes. We believe that a logarithmic chart is more effective than other types of charts in illustrating

changes in value during the early years shown in the chart. The vertical axis, the one that indicates the dollar value of an investment, is constructed with each segment representing a percent change in the value of the investment. In this chart, each segment represents a doubling, or

100% change, in the value of the investment. In other words, the space between $5,000 and $10,000 is the same size as the space between $10,000 and $20,000, and so on.

Average Annual Total Returns
As of 12/31/09
Series I Shares
Inception (9/10/01)	6.51	%
5 Years	4.07
1 Year	30.21
Series II Shares
Inception (9/10/01)	6.25	%
5 Years	3.80
1 Year	29.85

The performance of the Fund’s Series I and Series II share classes will differ primarily due to different class expenses.

   The performance data quoted represent past performance and cannot guarantee comparable future results; current performance may be lower or higher. Please contact your variable product issuer or financial adviser for the most recent month-end variable product performance. Performance figures reflect Fund expenses, reinvested distributions and changes in net asset value. Investment return and principal value will fluctuate so that

you may have a gain or loss when you sell shares.

   The net annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 1.04% and 1.29%, respectively.¹ The total annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 1.07% and 1.32%, respectively. The expense ratios presented above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

   AIM V.I. Mid Cap Core Equity Fund, a series portfolio of AIM Variable Insurance Funds, is currently offered through insurance companies issuing variable products. You cannot purchase shares of the Fund directly. Performance figures given represent the Fund and are not intended to reflect actual variable product values. They do

not reflect sales charges, expenses and fees assessed in connection with a variable product. Sales charges, expenses and fees, which are determined by the variable product issuers, will vary and will lower the total return.

   The most recent month-end performance data at the Fund level, excluding variable product charges, is available on the Invesco Aim automated information line, 866 702 4402. As mentioned above, for the most recent month-end performance including variable product charges, please contact your variable product issuer or financial adviser.

1 Total annual operating expenses less any contractual fee waivers and/or expense reimbursements by the adviser in effect through at least June 30, 2010. See current prospectus for more information.

AIM V.I. Mid Cap Core Equity Fund

AIM V.I. Mid Cap Core Equity Fund’s investment objective is long-term growth of capital.

n Unless otherwise stated, information presented in this report is as of December 31, 2009, and is based on total net assets.

n Unless otherwise noted, all data provided by Invesco.

Principal risks of investing in the Fund

To the extent the Fund holds cash or cash equivalents rather than equity securities for risk management purposes, the Fund may not achieve its investment objective.

   The values of convertible securities in which the Fund invests may be affected by market interest rates, the risk that the issuer may default on interest or principal payments, and the value of the underlying common stock into which these securities may be converted.

   Credit risk is the risk of loss on an investment due to the deterioration of an issuer’s financial health. Such a deterioration of financial health may result in a reduction of the credit rating of the issuer’s securities and may lead to the issuer’s inability to honor its contractual obligations, including making timely payment of interest and principal.

   The Fund may use enhanced investment techniques such as derivatives. The principal risk of derivatives is that the fluctuations in their values may not correlate perfectly with the overall securities markets. Derivatives are subject to counterparty risk — the risk that the other party will not complete the transaction with the Fund.

   Prices of equity securities change in response to many factors, including the historical and prospective earnings of the issuer, the value of its assets, general economic conditions, interest rates, investor perceptions and market liquidity.

   Foreign securities have additional risks, including exchange rate changes, political and economic upheaval, relative lack of information, relatively low market liquidity, and the potential lack of strict financial and accounting controls and standards.

   Interest rate risk refers to the risk that bond prices generally fall as interest rates rise and vice versa.

   Leveraging entails risks such as magnifying changes in the value of the portfolio’s securities.

   There is no guarantee that the investment techniques and risk analysis used by the Fund’s portfolio managers will produce the desired results.

   Stocks fall into three broad market capitalization categories – large, medium and small. Investing primarily in one category carries the risk that, due to current market conditions, that category may be out of favor with investors. Small and mid-sized companies may tend to be more vulnerable to adverse developments and more volatile than larger companies. Investments in small and mid-sized companies may involve special risks, including those associated with dependence on a small management group, little of no operating history, little or no track record of success, and limited product lines, market and financial resources. Also, there may be less publicly available information about the issuers of the securities or less market interest in such securities than in the case of larger companies, each of which can cause significant price volatility. The securities of small and mid-sized companies may be illiquid, restricted as to resale, or may trade less frequently and in smaller volume than more widely held securities, which may make it difficult for fund to establish or close out a position in these securities at prevailing market prices.

   The prices of securities held by the Fund may decline in response to market risks.

   The Fund may invest in obligations issued by agencies and instrumentalities of the U.S. government that may vary in the level of support they receive from the U.S. government. The U.S. government may choose not to provide financial support to U.S.-government-sponsored agencies or instrumentalities if it is not legally obligated to do so. In this case, if the issuer defaulted, the fund holding securities of such an issuer might not be able to recover its investment from the U.S. government.

About indexes used in this report

The S&P 500^® Index is an unmanaged index considered representative of the U.S. stock market.

   The Russell Midcap^® Index is an unmanaged index considered representative of mid-cap stocks. The Russell Midcap Index is a trademark/service mark

of the Frank Russell Co. Russell^® is a trademark of the Frank Russell Co.

   The Lipper VUF Mid-Cap Core Funds Index is an unmanaged index considered representative of mid-cap core variable insurance underlying funds tracked by Lipper.

   The Fund is not managed to track the performance of any particular index, including the indexes defined here, and consequently, the performance of the Fund may deviate significantly from the performance of the indexes.

   A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group reflects fund expenses; performance of a market index does not.

Other information

The Chartered Financial Analyst^® (CFA^®) designation is globally recognized and attests to a charterholder’s success in a rigorous and comprehensive study program in the field of investment management and research analysis.

   The returns shown in management’s discussion of Fund performance are based on net asset values calculated for shareholder transactions. Generally accepted accounting principles require adjustments to be made to the net assets of the Fund at period end for financial reporting purposes, and as such, the net asset values for shareholder transactions and the returns based on those net asset values may differ from the net asset values and returns reported in the Financial Highlights. Additionally, the returns and net asset values shown throughout this report are at the Fund level only and do not include variable product issuer charges. If such charges were included, the total returns would be lower.

   Industry classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s.

AIM V.I. Mid Cap Core Equity Fund

Schedule of Investments^(a)

December 31, 2009

	Shares		Value
Common Stocks & Other Equity Interests–85.00%
Aerospace & Defense–3.52%
Goodrich Corp.		81,443	$	5,232,713
ITT Corp.		78,119		3,885,639
Precision Castparts Corp.		73,258		8,084,020
				17,202,372
Apparel, Accessories & Luxury Goods–1.13%
Carter’s, Inc.(b)		210,181		5,517,251
Asset Management & Custody Banks–1.28%
Legg Mason, Inc.		207,225		6,249,906
Auto Parts & Equipment–1.25%
WABCO Holdings Inc.		236,406		6,096,911
Biotechnology–0.64%
Biogen Idec Inc.(b)		30,845		1,650,208
Genzyme Corp.(b)		30,621		1,500,735
				3,150,943
Communications Equipment–3.22%
Juniper Networks, Inc.(b)		148,209		3,952,734
Motorola, Inc.(b)		743,563		5,770,049
Polycom, Inc.(b)		240,128		5,995,996
				15,718,779
Computer Storage & Peripherals–1.25%
NetApp, Inc.(b)		176,976		6,086,205
Data Processing & Outsourced Services–0.67%
Western Union Co. (The)		172,748		3,256,300
Distributors–0.90%
Genuine Parts Co.		115,388		4,380,128
Education Services–0.38%
Apollo Group, Inc.–Class A(b)		30,573		1,852,112
Electrical Components & Equipment–0.89%
Thomas & Betts Corp.(b)		121,966		4,365,163
Electronic Equipment & Instruments–1.50%
Agilent Technologies, Inc.(b)		235,241		7,308,938
Electronic Manufacturing Services–0.89%
Molex Inc.		201,133		4,334,416
Environmental & Facilities Services–1.56%
Republic Services, Inc.		269,435		7,627,705
	Shares
Food Retail–2.23%
Kroger Co. (The)		70,000		1,437,100
Safeway Inc.		443,499		9,442,094
				10,879,194
Gas Utilities–0.83%
UGI Corp.		166,994		4,039,585
Health Care Equipment–7.31%
Boston Scientific Corp.(b)		814,189		7,327,701
Hospira, Inc.(b)		132,493		6,757,143
St. Jude Medical, Inc.(b)		28,088		1,033,077
Teleflex Inc.		72,574		3,911,013
Varian Medical Systems, Inc.(b)		163,193		7,645,592
Zimmer Holdings, Inc.(b)		152,856		9,035,318
				35,709,844
Health Care Facilities–0.82%
Rhoen-Klinikum AG (Germany)(c)		163,261		3,987,732
Health Care Services–2.45%
DaVita, Inc.(b)		70,515		4,142,051
Laboratory Corp. of America Holdings(b)		43,870		3,283,231
Quest Diagnostics Inc.		74,881		4,521,315
				11,946,597
Health Care Supplies–1.58%
Cooper Cos., Inc. (The)		184,761		7,043,089
Immucor, Inc.(b)		33,460		677,231
				7,720,320
Household Products–0.92%
Energizer Holdings, Inc.(b)		73,499		4,504,019
Industrial Conglomerates–1.25%
Tyco International Ltd.		170,653		6,088,899
Industrial Gases–0.98%
Air Products & Common Chemicals, Inc.		59,038		4,785,620
Industrial Machinery–4.63%
Actuant Corp.–Class A		42,474		787,043
Atlas Copco A.B.–Class A (Sweden)		410,693		5,997,179
Danaher Corp.		73,294		5,511,709
Pall Corp.		147,546		5,341,165
Parker Hannifin Corp.		92,746		4,997,154
				22,634,250
Insurance Brokers–0.60%
Marsh & McLennan Cos., Inc.		133,167		2,940,327

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

AIM V.I. Mid Cap Core Equity Fund

	Shares		Value
IT Consulting & Other Services–1.59%
Amdocs Ltd.(b)		272,428	$	7,772,371
Leisure Products–1.09%
Hasbro, Inc.		165,561		5,307,886
Life Sciences Tools & Services–4.75%
Pharmaceutical Product Development, Inc.		268,083		6,283,866
Techne Corp.		56,997		3,907,714
Thermo Fisher Scientific, Inc.(b)		157,100		7,492,099
Waters Corp.(b)		89,342		5,535,630
				23,219,309
Managed Health Care–0.20%
Health Net Inc.(b)		42,831		997,534
Multi-Sector Holdings–0.23%
PICO Holdings, Inc.(b)		34,688		1,135,338
Office Electronics–1.18%
Xerox Corp.		682,359		5,772,757
Office Services & Supplies–0.94%
Pitney Bowes Inc.		202,456		4,607,899
Oil & Gas Drilling–0.76%
Helmerich & Payne, Inc.		92,949		3,706,806
Oil & Gas Equipment & Services–2.62%
BJ Services Co.		357,177		6,643,492
Dresser-Rand Group, Inc.(b)		99,956		3,159,609
Smith International, Inc.		109,698		2,980,495
				12,783,596
Oil & Gas Exploration & Production–3.84%
Chesapeake Energy Corp.		84,639		2,190,457
Newfield Exploration Co.(b)		162,715		7,847,744
Penn West Energy Trust (Canada)		136,396		2,400,570
Pioneer Natural Resources Co.		58,254		2,806,095
Southwestern Energy Co.(b)		72,398		3,489,584
				18,734,450
Oil & Gas Refining & Marketing–0.30%
Valero Energy Corp.		88,538		1,483,012
Oil & Gas Storage & Transportation–1.38%
Williams Cos., Inc. (The)		319,431		6,733,605
Packaged Foods & Meats–2.61%
Cadbury PLC (United Kingdom)		540,497		6,958,129
Del Monte Foods Co.		139,346		1,580,184
Sara Lee Corp.		344,478		4,195,742
				12,734,055
Personal Products–0.79%
Avon Products, Inc.		121,905		3,840,007
Pharmaceuticals–1.89%
Allergan, Inc./United States		111,282		7,011,879
Teva Pharmaceutical Industries Ltd.–ADR (Israel)		39,434		2,215,402
				9,227,281
Property & Casualty Insurance–2.49%
Axis Capital Holdings Ltd.		151,259		4,297,268
Progressive Corp. (The)(b)		435,975		7,843,190
				12,140,458
Research & Consulting Services–0.84%
Dun & Bradstreet Corp.		48,956		4,130,418
Semiconductors–3.22%
Linear Technology Corp.		243,823		7,446,355
Microchip Technology Inc.		93,673		2,722,137
Xilinx, Inc.		222,418		5,573,795
				15,742,287
Specialized Consumer Services–1.25%
H&R Block, Inc.		270,757		6,124,523
Specialized Finance–1.57%
Moody’s Corp.		285,896		7,662,013
Specialty Chemicals–3.26%
International Flavors & Fragrances Inc.		177,991		7,322,550
Sigma-Aldrich Corp.		170,003		8,590,251
				15,912,801
Systems Software–2.29%
Symantec Corp.(b)		625,568		11,191,412
Thrifts & Mortgage Finance–2.21%
People’s United Financial Inc.		647,586		10,814,686
Wireless Telecommunication Services–1.02%
MetroPCS Communications, Inc.(b)		651,361		4,969,884
Total Common Stocks & Other Equity Interests (Cost $343,588,542)				415,127,904
Preferred Stocks–2.00%
Household Products–2.00%
Henkel AG & Co. KGaA(Germany)–Pfd. (Cost $7,284,866)		187,454		9,746,042

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

AIM V.I. Mid Cap Core Equity Fund

	Shares		Value
Money Market Funds–12.29%
Liquid Assets Portfolio–Institutional Class(d)		30,023,665	$	30,023,665
Premier Portfolio–Institutional Class(d)		30,023,665		30,023,665
Total Money Market Funds (Cost $60,047,330)				60,047,330
TOTAL INVESTMENTS (excluding investments purchased with cash collateral from securities on loan)–99.29% (Cost $410,920,738)				484,921,276
Investments Purchased with Cash Collateral from Securities on Loan
Money Market Funds–0.01%
Liquid Assets Portfolio–Institutional Class (Cost $42,106)(d)(e)		42,106		42,106
TOTAL INVESTMENTS–99.30% (Cost $410,962,844)				484,963,382
OTHER ASSETS LESS LIABILITIES–0.70%				3,398,387
NET ASSETS–100.00%			$	488,361,769

Investment Abbreviations:

ADR	– American Depositary Receipt
Pfd.	– Preferred

Notes to Schedule of Investments:

(a)	Industry and/or sector classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s.
(b)	Non-income producing security.
(c)	All or a portion of this security was out on loan at December 31, 2009.
(d)	The money market fund and the Fund are affiliated by having the same investment adviser.
(e)	The security has been segregated to satisfy the commitment to return the cash collateral received in securities lending transactions upon the borrower’s return of the securities loaned. See Note 1I.

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

AIM V.I. Mid Cap Core Equity Fund

Statement of Assets and Liabilities

December 31, 2009

Assets:
Investments, at value (Cost $350,873,408)*	$	424,873,946
Investments in affiliated money market funds, at value and cost		60,089,436
Total investments, at value (Cost $410,962,844)		484,963,382
Foreign currencies, at value (Cost $567,421)		566,365
Receivables for:
Investments sold		1,029,711
Fund shares sold		2,734,942
Dividends		568,096
Foreign currency contracts outstanding		112,609
Investment for trustee deferred compensation and retirement plans		17,832
Total assets		489,992,937
Liabilities:
Payables for:
Fund shares reacquired		909,530
Amount due custodian		212,888
Collateral upon return of securities loaned		42,106
Accrued fees to affiliates		344,214
Accrued other operating expenses		58,116
Trustee deferred compensation and retirement plans		64,314
Total liabilities		1,631,168
Net assets applicable to shares outstanding	$	488,361,769
Net assets consist of:
Shares of beneficial interest	$	486,836,142
Undistributed net investment income		2,389,712
Undistributed net realized gain (loss)		(74,975,445	)
Unrealized appreciation		74,111,360
	$	488,361,769
Net Assets:
Series I	$	432,232,876
Series II	$	56,128,893
Shares outstanding, $0.001 par value per share, unlimited number of shares authorized:
Series I		39,588,018
Series II		5,183,253
Series I:
Net asset value per share	$	10.92
Series II:
Net asset value per share	$	10.83

*  At December 31, 2009, securities with an aggregate value of $40,053 were on loan to brokers.

Statement of Operations

For the year ended December 31, 2009

Investment income:
Dividends (net of foreign withholding taxes of $100,705)	$	6,408,732
Dividends from affiliated money market funds (includes securities lending income of $206,175)		471,072
Total investment income		6,879,804
Expenses:
Advisory fees		3,073,300
Administrative services fees		1,157,545
Custodian fees		39,128
Distribution fees — Series II		127,667
Transfer agent fees		35,422
Trustees’ and officers’ fees and benefits		32,519
Other		67,045
Total expenses		4,532,626
Less: Fees waived		(87,044	)
Net expenses		4,445,582
Net investment income		2,434,222
Realized and unrealized gain (loss) from:
Net realized gain (loss) from:
Investment securities (includes net gains from securities sold to affiliates of $7,225)		(61,236,794	)
Foreign currencies		40,160
Foreign currency contracts		(677,261	)
		(61,873,895	)
Change in net unrealized appreciation (depreciation) of:
Investment securities		174,119,314
Foreign currencies		(4,169	)
Foreign currency contracts		402,689
		174,517,834
Net realized and unrealized gain		112,643,939
Net increase in net assets resulting from operations	$	115,078,161

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

AIM V.I. Mid Cap Core Equity Fund

Statement of Changes in Net Assets

For the years ended December 31, 2009 and 2008

	2009			2008
Operations:
Net investment income	$	2,434,222		$	5,619,494
Net realized gain (loss)		(61,873,895	)		(7,003,370	)
Change in net unrealized appreciation (loss)		174,517,834			(172,441,157	)
Net increase (decrease) in net assets resulting from operations		115,078,161			(173,825,033	)
Distributions to shareholders from net investment income:
Series I		(5,080,173	)		(7,372,511	)
Series II		(530,907	)		(829,282	)
Total distributions from net investment income		(5,611,080	)		(8,201,793	)
Distributions to shareholders from net realized gains:
Series I		(4,902,328	)		(53,615,148	)
Series II		(669,176	)		(7,340,647	)
Total distributions from net realized gains		(5,571,504	)		(60,955,795	)
Share transactions-net:
Series I		(11,987,008	)		(19,282,609	)
Series II		(4,824,114	)		(1,143,742	)
Net increase (decrease) in net assets resulting from share transactions		(16,811,122	)		(20,426,351	)
Net increase (decrease) in net assets		87,084,455			(263,408,972	)
Net assets:
Beginning of year		401,277,314			664,686,286
End of year (includes undistributed net investment income of $2,389,712 and $5,536,478, respectively)	$	488,361,769		$	401,277,314

Notes to Financial Statements

December 31, 2009

NOTE 1—Significant Accounting Policies

AIM V.I. Mid Cap Core Equity Fund (the “Fund”) is a series portfolio of AIM Variable Insurance Funds (the “Trust”). The Trust is a Delaware statutory trust registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end series management investment company consisting of twenty-one separate portfolios, (each constituting a “Fund”). The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Matters affecting each Fund or class will be voted on exclusively by the shareholders of such Fund or class. Current Securities and Exchange Commission (“SEC”) guidance, however, requires participating insurance companies offering separate accounts to vote shares proportionally in accordance with the instructions of the contract owners whose investments are funded by shares of each Fund or class.

  The Fund’s investment objective is long-term growth of capital.

  The Fund currently offers two classes of shares, Series I and Series II, both of which are offered to insurance company separate accounts funding variable annuity contracts and variable life insurance policies (“variable products”).

  The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements.

A.

Security Valuations — Securities, including restricted securities, are valued according to the following policy.

A security listed or traded on an exchange (except convertible bonds) is valued at its last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales or official closing price on a particular day, the security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based on prices furnished by independent pricing services or market makers. When such securities are valued by an independent pricing service they may be considered fair valued. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean between the last bid and ask prices from the exchange on which they are principally traded. Options not listed on an exchange are valued by an independent source at the mean between the last bid and ask prices. For purposes of determining net asset value per share, futures and option contracts generally are valued 15 minutes after the close of the customary trading session of the New York Stock Exchange (“NYSE”).

AIM V.I. Mid Cap Core Equity Fund

	Investments in open-end and closed-end registered investment companies that do not trade on an exchange are valued at the end of day net asset value per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded.
	Debt obligations (including convertible bonds) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution-size trading in similar groups of securities, developments related to specific securities, dividend rate, yield, quality, type of issue, coupon rate, maturity, individual trading characteristics and other market data. Short-term obligations, including commercial paper, having 60 days or less to maturity are recorded at amortized cost which approximates value. Debt securities are subject to interest rate and credit risks. In addition, all debt securities involve some risk of default with respect to interest and/or principal payments.
	Foreign securities (including foreign exchange contracts) are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the NYSE. If market quotations are available and reliable for foreign exchange traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that are significant and make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economical upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
	Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities and Corporate Loans. The mean between the last bid and asked prices may be used to value debt obligations other than Corporate Loans.
	Securities for which market quotations are not readily available or are unreliable are valued at fair value as determined in good faith by or under the supervision of the Trust’s officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a security’s fair value.
	Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
B.	Securities Transactions and Investment Income — Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income is recorded on the accrual basis from settlement date. Dividend income is recorded on the ex-dividend date.
	The Fund may periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain/loss for investments no longer held and as unrealized gain/loss for investments still held.
	Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the realized and unrealized net gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the Fund’s net asset value and, accordingly, they reduce the Fund’s total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in the Statement of Operations and Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the adviser.
	The Fund allocates income and realized and unrealized capital gains and losses to a class based on the relative net assets of each class.
C.	Country Determination — For the purposes of making investment selection decisions and presentation in the Schedule of Investments, the investment adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuer’s securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted.
D.	Distributions — Distributions from income and net realized capital gain, if any, are generally paid to separate accounts of participating insurance companies annually and recorded on ex-dividend date.
E.	Federal Income Taxes — The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code necessary to qualify as a regulated investment company and to distribute substantially all of the Fund’s taxable earnings to shareholders. As such, the Fund will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements.

AIM V.I. Mid Cap Core Equity Fund

	The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.
F.	Expenses — Fees provided for under the Rule 12b-1 plan of a particular class of the Fund and which are directly attributable to that class are charged to the operations of such class. All other expenses are allocated among the classes based on relative net assets.
G.	Accounting Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print, which is generally 45 days from the period-end date.
H.	Indemnifications — Under the Trust’s organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Fund’s servicing agreements, that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote.
I.	Securities Lending — The Fund may lend portfolio securities having a market value up to one-third of the Fund’s total assets. Such loans are secured by collateral equal to no less than the market value of the loaned securities determined daily by the securities lending provider. Such collateral will be cash or debt securities issued or guaranteed by the U.S. Government or any of its sponsored agencies. Cash collateral received in connection with these loans is invested in short-term money market instruments or affiliated money market funds and is shown as such on the Schedule of Investments. It is the Fund’s policy to obtain additional collateral from or return excess collateral to the borrower by the end of the next business day, following the valuation date of the securities loaned. Therefore, the value of the collateral held may be temporarily less than the value of the securities on loan. Lending securities entails a risk of loss to the Fund if and to the extent that the market value of the securities loaned were to increase and the borrower did not increase the collateral accordingly, and the borrower fails to return the securities. Upon the failure of the borrower to return the securities, collateral may be liquidated and the securities may be purchased on the open market to replace the loaned securities. The Fund could experience delays and costs in gaining access to the collateral. The Fund bears the risk of any deficiency in the amount of the collateral available for return to the borrower due to any loss on the collateral invested. Dividends received on cash collateral investments for securities lending transactions, which are net of compensation to counterparties, is included in Dividends from affiliates on the Statement of Operations. The aggregate value of securities out on loan is shown as a footnote on the Statement of Assets and Liabilities, if any.
J.	Foreign Currency Translations — Foreign currency is valued at the close of the NYSE based on quotations posted by banks and major currency dealers. Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at date of valuation. Purchases and sales of portfolio securities (net of foreign taxes withheld on disposition) and income items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. The Fund does not separately account for the portion of the results of operations resulting from changes in foreign exchange rates on investments and the fluctuations arising from changes in market prices of securities held. The combined results of changes in foreign exchange rates and the fluctuation of market prices on investments (net of estimated foreign tax withholding) are included with the net realized and unrealized gain or loss from investments in the Statement of Operations. Reported net realized foreign currency gains or losses arise from (i) sales of foreign currencies, (ii) currency gains or losses realized between the trade and settlement dates on securities transactions, and (iii) the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign currency gains and losses arise from changes in the fair values of assets and liabilities, other than investments in securities at fiscal period end, resulting from changes in exchange rates.
	The Fund may invest in foreign securities which may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable.
K.	Foreign Currency Contracts — The Fund may enter into foreign currency contracts to manage or minimize currency or exchange rate risk. The Fund may also enter into foreign currency contracts for the purchase or sale of a security denominated in a foreign currency in order to “lock in” the U.S. dollar price of that security. A foreign currency contract is an obligation to purchase or sell a specific currency for an agreed-upon price at a future date. The use of foreign currency contracts does not eliminate fluctuations in the price of the underlying securities the Fund owns or intends to acquire but establishes a rate of exchange in advance. Fluctuations in the value of these contracts are measured by the difference in the contract date and reporting date exchange rates and are recorded as unrealized appreciation (depreciation) until the contracts are closed. When the contracts are closed, realized gains (losses) are recorded. Realized and unrealized gains (losses) on the contracts are included in the Statement of Operations. The primary risks associated with foreign currency contracts include failure of the counterparty to meet the terms of the contract and the value of the foreign currency changing unfavorably. These risks may be in excess of the amounts reflected in the Statement of Assets and Liabilities.

AIM V.I. Mid Cap Core Equity Fund

NOTE 2—Advisory Fees and Other Fees Paid to Affiliates

The Trust has entered into a master investment advisory agreement with Invesco Advisers, Inc. (the “Adviser” or “Invesco”). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Adviser based on the annual rate of the Fund’s average daily net assets as follows:

Average Net Assets	Rate
First $500 million		0	.725%
Next $500 million		0	.70%
Next $500 million		0	.675%
Over $1.5 billion		0	.65%

  Under the terms of a master sub-advisory agreement approved by shareholders of the Funds between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Trimark Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Funds, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide discretionary investment management services to each Fund based on the percentage of assets allocated to such Sub-Adviser(s).

  On December 31, 2009, Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc., Invesco Private Asset Management, Inc. and Invesco Global Asset Management (N.A.), Inc. merged into Invesco Institutional (N.A.), Inc. and the consolidated adviser firm was renamed Invesco Advisers, Inc.

  The Adviser has contractually agreed to waive advisory fees and/or reimburse expenses of all shares to the extent necessary to limit total annual fund operating expenses after fee waiver (excluding certain items discussed below) of Series I shares to 1.30% and Series II shares to 1.45% of average daily net assets, through at least April 30, 2011. In determining the Adviser’s obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the total annual fund operating expenses after fee waiver to exceed the numbers reflected above: (1) interest; (2) taxes; (3) dividend expense on short sales; (4) extraordinary items or non-routine items; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. The Board of Trustees or Invesco may terminate the fee waiver arrangement at any time. The Adviser did not waive fees and/or reimburse expenses during the period under this expense limitation.

  Further, the Adviser has contractually agreed, through at least June 30, 2010, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash (excluding investments of cash collateral from securities lending) in such affiliated money market funds.

  For the year ended December 31, 2009, the Adviser waived advisory fees of $87,044.

  At the request of the Trustees of the Trust, Invesco Ltd. agreed to reimburse expenses incurred by the Fund in connection with market timing matters in the AIM Funds, which may include legal, audit, shareholder reporting, communications and trustee expenses. For the year ended December 31, 2009, Invesco Ltd. did not reimburse any expenses.

  The Trust has entered into a master administrative services agreement with Invesco pursuant to which the Fund has agreed to pay Invesco a fee for costs incurred in providing accounting services and fund administrative services to the Fund and to reimburse Invesco for administrative services fees paid to insurance companies that have agreed to provide services to the participants of separate accounts. These administrative services provided by the insurance companies may include, among other things: the printing of prospectuses, financial reports and proxy statements and the delivery of the same to existing participants; the maintenance of master accounts; the facilitation of purchases and redemptions requested by the participants; and the servicing of participants’ accounts. Pursuant to such agreement, for the year ended December 31, 2009, Invesco was paid $107,498 for accounting and fund administrative services and reimbursed $1,050,047 for services provided by insurance companies.

  The Trust has entered into a transfer agency and service agreement with Invesco Aim Investment Services, Inc. (“IAIS”) pursuant to which the Fund has agreed to pay IAIS a fee for providing transfer agency and shareholder services to the Fund and reimburse IAIS for certain expenses incurred by IAIS in the course of providing such services. For the year ended December 31, 2009, expenses incurred under the agreement are shown in the Statement of Operations as transfer agent fees.

  The Trust has entered into a master distribution agreement with Invesco Aim Distributors, Inc. (“IADI”) to serve as the distributor for the Fund. The Trust has adopted a plan pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund’s Series II shares (the “Plan”). The Fund, pursuant to the Plan, pays IADI compensation at the annual rate of 0.25% of the Fund’s average daily net assets of Series II shares. Of the Plan payments, up to 0.25% of the average daily net assets of the Series II shares may be paid to insurance companies who furnish continuing personal shareholder services to customers who purchase and own Series II shares of the Fund. For the year ended December 31, 2009, expenses incurred under the Plan are detailed in the Statement of Operations as distribution fees.

  Certain officers and trustees of the Trust are officers and directors of Invesco, IAIS and/or IADI.

NOTE 3—Additional Valuation Information

Generally Accepted Accounting Principles (“GAAP”) defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3) generally when market prices are not readily available or are unreliable. Based on the valuation

AIM V.I. Mid Cap Core Equity Fund

inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment’s assigned level:

Level 1 —	Prices are determined using quoted prices in an active market for identical assets.
Level 2 —	Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk and others.
Level 3 —	Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information.

  The following is a summary of the tiered valuation input levels, as of December 31, 2009. The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.

	Level 1		Level 2		Level 3		Total
Equity Securities	$	458,274,301	$	26,689,081	$	—	$	484,963,382
Other Investments*		—		112,609		—		112,609
Total Investments	$	458,274,301	$	26,801,690	$	—	$	485,075,991

*  Other Investments include foreign currency contracts, which are included at unrealized appreciation.

NOTE 4—Derivative Investments

Effective with the beginning of the Fund’s fiscal year, the Fund has implemented new required disclosures about derivative instruments and hedging activities in accordance with GAAP. GAAP has intended to improve financial reporting about derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity’s financial position and financial performance. The enhanced disclosure has no impact on the results of operations reported in the financial statements.

Value of Derivative Instruments at Period-End

The Table below summarizes the value of the Fund’s derivative instruments, detailed by primary risk exposure, held as of December 31, 2009:

	Value
Risk Exposure/ Derivative Type	Assets		Liabilities
Currency risk
Foreign currency contracts(a)	$	112,609	$	—

^(a) Values are disclosed on the Statement of Assets and Liabilities under the Foreign currency contracts.

Effect of Derivative Instruments for the year ended December 31, 2009

The table below summarizes the gains (losses) on derivative instruments, detailed by primary risk exposure, recognized in earnings during the period:

	Location of Gain (Loss) on
	Statement of Operations
	Foreign Currency
	Contracts*
Realized Gain (Loss)
Currency risk	$	(677,261	)
Change in Unrealized Appreciation
Currency risk	$	402,689
Total	$	(274,572	)

*  The average value of foreign currency contracts outstanding during the period was $4,505,511.

Open Foreign Currency Contracts
Settlement	Contract to						Unrealized
Date	Deliver		Receive		Value		Appreciation
3/04/10	GBP	2,180,000	USD	3,633,842	$	3,521,233	$	112,609
Total open foreign currency contracts							$	112,609

Currency Abbreviations:
GBP	– British Pound Sterling
USD	– U.S. Dollar

AIM V.I. Mid Cap Core Equity Fund

NOTE 5—Security Transactions with Affiliated Funds

The Fund is permitted to purchase or sell securities from or to certain other AIM Funds under specified conditions outlined in procedures adopted by the Board of Trustees of the Trust. The procedures have been designed to ensure that any purchase or sale of securities by the Fund from or to another fund or portfolio that is or could be considered an affiliate by virtue of having a common investment adviser (or affiliated investment advisers), common Trustees and/or common officers complies with Rule 17a-7 of the 1940 Act. Further, as defined under the procedures, each transaction is effected at the current market price. Pursuant to these procedures, for the year ended December 31, 2009, the Fund engaged in securities sales of $86,599, which resulted in net realized gains of $7,225.

NOTE 6—Trustees’ and Officers’ Fees and Benefits

“Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and “Trustees’ and Officers’ Fees and Benefits” also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various AIM Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees are eligible to participate in a retirement plan that provides for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former Trustees who also participate in a retirement plan and receive benefits under such plan. “Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund.

  During the year ended December 31, 2009, the Fund paid legal fees of $3,744 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A member of that firm is a Trustee of the Trust.

NOTE 7—Cash Balances

The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with The State Street Bank and Trust Company, the custodian bank. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (i) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (ii) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.

NOTE 8—Distributions to Shareholders and Tax Components of Net Assets

Tax Character of Distributions to Shareholders Paid During the Years Ended December 31, 2009 and 2008:

	2009		2008
Ordinary income	$	5,621,148	$	14,978,987
Long-term capital gain		5,561,436		54,178,601
Total distributions	$	11,182,584	$	69,157,588

Tax Components of Net Assets at Period-End:

	2009
Undistributed ordinary income	$	2,455,392
Net unrealized appreciation — investments		69,877,375
Net unrealized appreciation (depreciation) — other investments		(1,788	)
Temporary book/tax differences		(65,679	)
Capital loss carryover		(70,739,673	)
Shares of beneficial interest		486,836,142
Total net assets	$	488,361,769

  The difference between book-basis and tax-basis unrealized appreciation (depreciation) is due to differences in the timing of recognition of gains and losses on investments for tax and book purposes. The Fund’s net unrealized appreciation difference is attributable primarily to wash sales.

  The temporary book/tax differences are a result of timing differences between book and tax recognition of income and/or expenses. The Fund’s temporary book/tax differences are the result of the trustee deferral of compensation and retirement plan benefits.

  Capital loss carryforward is calculated and reported as of a specific date. Results of transactions and other activity after that date may affect the amount of capital loss carryforward actually available for the Fund to utilize. The ability to utilize capital loss carryforward in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.

  The Fund has a capital loss carryforward as of December 31, 2009 which expires as follows:

	Capital Loss
Expiration	Carryforward*
December 31, 2017	$	70,739,673

*  Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code.

AIM V.I. Mid Cap Core Equity Fund

NOTE 9—Investment Securities

The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the year ended December 31, 2009 was $149,760,964 and $194,455,130, respectively. Cost of investments on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed Federal income tax reporting period-end.

Unrealized Appreciation (Depreciation) of Investment Securities on a Tax Basis
Aggregate unrealized appreciation of investment securities	$	81,939,474
Aggregate unrealized (depreciation) of investment securities		(12,062,099	)
Net unrealized appreciation of investment securities	$	69,877,375
Cost of investments for tax purposes is $415,086,007.

NOTE 10—Reclassification of Permanent Differences

Primarily as a result of differing book/tax treatment of foreign currency transactions and distributions, on December 31, 2009, undistributed net investment income was increased by $30,092, undistributed net realized gain (loss) was decreased by $30,092. This reclassification had no effect on the net assets of the Fund.

NOTE 11—Share Information

	Summary of Share Activity
				Year ended December 31,
	2009(a)						2008
	Shares			Amount			Shares			Amount
Sold:
Series I		3,776,568		$	34,511,811			1,980,935		$	25,879,573
Series II		1,852,803			16,828,951			2,495,197			33,372,144
Issued as reinvestment of dividends:
Series I		939,088			9,982,501			7,277,763			60,987,657
Series II		113,860			1,200,083			983,144			8,169,929
Reacquired:
Series I		(6,211,044	)		(56,481,320	)		(8,365,253	)		(106,149,839	)
Series II		(2,477,573	)		(22,853,148	)		(3,256,102	)		(42,685,815	)
Net increase (decrease) in share activity		(2,006,298	)	$	(16,811,122	)		1,115,684		$	(20,426,351	)

^(a) There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 74% of the outstanding shares of the Fund. The Fund and the Fund’s principal underwriter or adviser, are parties to participation agreements with these entities whereby these entities sell units of interest in separate accounts funding variable products that are invested in the Fund. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and or Invesco affiliates including but not limited to services such as, securities brokerage, third party record keeping and account servicing and administrative services. The Trust has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially.

AIM V.I. Mid Cap Core Equity Fund

NOTE 12—Financial Highlights

The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.

																												Ratio of			Ratio of
																												expenses			expenses
						Net gains																						to average			to average net			Ratio of net
	Net asset					(losses) on						Dividends			Distributions													net assets			assets without			investment
	value,		Net			securities (both			Total from			from net			from net						Net asset					Net assets,		with fee waivers			fee waivers			income
	beginning		investment			realized and			investment			investment			realized			Total			value, end		Total			end of period		and/or expenses			and/or expenses			to average			Portfolio
	of period		income			unrealized)			operations			income			gains			Distributions			of period		Return(a)			(000s omitted)		absorbed			absorbed			net assets			turnover(b)
Series I
Year ended 12/31/09	$	8.59	$	0.06	(c)	$	2.53		$	2.59		$	(0.13	)	$	(0.13	)	$	(0.26	)	$	10.92		30.21	%	$	432,233		1.02	%(d)		1.04	%(d)		0.60	%(d)		41	%
Year ended 12/31/08		14.57		0.14	(c)		(4.33	)		(4.19	)		(0.22	)		(1.57	)		(1.79	)		8.59		(28.52	)		352,788		1.01			1.04			1.05			62
Year ended 12/31/07		13.52		0.19			1.11			1.30			(0.04	)		(0.21	)		(0.25	)		14.57		9.55			585,608		1.00			1.01			1.23			62
Year ended 12/31/06		13.61		0.14			1.39			1.53			(0.14	)		(1.48	)		(1.62	)		13.52		11.24			581,154		1.04			1.04			0.93			83
Year ended 12/31/05		13.11		0.06			0.94			1.00			(0.07	)		(0.43	)		(0.50	)		13.61		7.62			584,860		1.03			1.03			0.50			70
Series II
Year ended 12/31/09		8.52		0.03	(c)		2.51			2.54			(0.10	)		(0.13	)		(0.23	)		10.83		29.85			56,129		1.27	(d)		1.29	(d)		0.35	(d)		41
Year ended 12/31/08		14.45		0.10	(c)		(4.28	)		(4.18	)		(0.18	)		(1.57	)		(1.75	)		8.52		(28.68	)		48,489		1.26			1.29			0.80			62
Year ended 12/31/07		13.42		0.13			1.12			1.25			(0.01	)		(0.21	)		(0.22	)		14.45		9.29			79,079		1.25			1.26			0.98			62
Year ended 12/31/06		13.52		0.10			1.38			1.48			(0.10	)		(1.48	)		(1.58	)		13.42		10.98			56,766		1.29			1.29			0.68			83
Year ended 12/31/05		13.04		0.03			0.92			0.95			(0.04	)		(0.43	)		(0.47	)		13.52		7.27			50,380		1.28			1.28			0.25			70

(a)	Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Total returns do not reflect charges assessed in connection with a variable product, which if included would reduce total returns.
(b)	Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable.
(c)	Calculated using average shares outstanding.
(d)	Ratios are based on average daily net assets (000’s omitted) of $372,836 and $51,067 for Series I and Series II shares, respectively.

AIM V.I. Mid Cap Core Equity Fund

Report of Independent Registered Public Accounting Firm

To the Board of Trustees of AIM Variable Insurance Funds

and Shareholders of AIM V.I. Mid Cap Core Equity Fund:

In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of AIM V.I. Mid Cap Core Equity Fund, (one of the funds constituting AIM Variable Insurance Funds, hereafter referred to as the “Fund”) at December 31, 2009, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at December 31, 2009 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP

February 10, 2010

Houston, Texas

AIM V.I. Mid Cap Core Equity Fund

Calculating your ongoing Fund expenses

Example

As a shareholder of the Fund, you incur ongoing costs, including management fees; distribution and/or service fees (12b-1); and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period July 1, 2009, through December 31, 2009.

  The actual and hypothetical expenses in the examples below do not represent the effect of any fees or other expenses assessed in connection with a variable product; if they did, the expenses shown would be higher while the ending account values shown would be lower.

Actual expenses

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

Hypothetical example for comparison purposes

The table below also provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return.

  The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

  Please note that the expenses shown in the table are meant to highlight your ongoing costs. Therefore, the hypothetical information is useful in comparing ongoing costs, and will not help you determine the relative total costs of owning different funds.

							HYPOTHETICAL
							(5% annual return before
			ACTUAL				expenses)
	Beginning		Ending		Expenses		Ending		Expenses		Annualized
	Account Value		Account Value		Paid During		Account Value		Paid During		Expense
Class	(07/01/09)		(12/31/09)1		Period2		(12/31/09)		Period2		Ratio
Series I	$	1,000.00	$	1,215.80	$	5.70	$	1,020.06	$	5.19		1.02	%
Series II		1,000.00		1,214.50		7.09		1,018.80		6.46		1.27

1	The actual ending account value is based on the actual total return of the Fund for the period July 1, 2009 through December 31, 2009, after actual expenses and will differ from the hypothetical ending account value which is based on the Fund’s expense ratio and a hypothetical annual return of 5% before expenses.
2	Expenses are equal to the Fund’s annualized expense ratio as indicated above multiplied by the average account value over the period, multiplied by 184/365 to reflect the most recent fiscal half year.

AIM V.I. Mid Cap Core Equity Fund

Tax Information

Form 1099-DIV, Form 1042-S and other year-end tax information provide shareholders with actual calendar year amounts that should be included in their tax returns. Shareholders should consult their tax advisors.

  The following distribution information is being provided as required by the Internal Revenue Code or to meet a specific state’s requirement.

  The Fund designates the following amounts or, if subsequently determined to be different, the maximum amount allowable for its fiscal year ended December 31, 2009:

Federal and State Income Tax
Long-Term Capital Gain Dividends	$	5,561,435
Corporate Dividends Received Deduction*		84.47%

*  The above percentages are based on ordinary income dividends paid to shareholders during the Fund’s fiscal year.

AIM V.I. Mid Cap Core Equity Fund

Trustees and Officers

The address of each trustee and officer of AIM Variable Insurance Funds (the “Trust”), is 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173. Each trustee oversees 105 portfolios in the AIM Funds complex. The trustees serve for the life of the Trust, subject to their earlier death, incapacitation, resignation, retirement or removal as more specifically provided in the Trust’s organizational documents. Each officer serves for a one year term or until their successors are elected and qualified. Column two below includes length of time served with predecessor entities, if any.

Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Other Directorship(s)
Position(s) Held with the Trust	or Officer	During Past 5 Years	Held by Trustee
	Since
Interested Persons
Martin L. Flanagan1 — 1960 Trustee	2007	Executive Director, Chief Executive Officer and President, Invesco Ltd. (ultimate parent of Invesco Aim and a global investment management firm); Adviser to the Board, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Trustee, The AIM Family of Funds®; Board of Governors, Investment Company Institute; and Member of Executive Board, SMU Cox School of Business	None
		Formerly: Chairman, Invesco Aim Advisors, Inc. (registered investment adviser); Director, Chairman, Chief Executive Officer and President, IVZ Inc. (holding company), INVESCO Group Services, Inc. (service provider) and Invesco North American Holdings, Inc. (holding company); Director, Chief Executive Officer and President, Invesco Holding Company Limited (parent of Invesco Aim and a global investment management firm); Director, Invesco Ltd.; Chairman and Vice Chairman, Investment Company Institute
Philip A. Taylor2 — 1954 Trustee, President and Principal Executive Officer	2006	Head of North American Retail and Senior Managing Director, Invesco Ltd.; Director, Co-Chairman, Co-President and Co- Chief Executive Officer, Invesco Advisers, inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Director, Chief Executive Officer and President, Invesco Aim Advisors, Inc. and 1371 Preferred Inc. (holding company); Director, Chairman, Chief Executive Officer and President, Invesco Aim Management Group, Inc. (financial services holding company); Director, Co-Chairman, Co-President and Co-Chief Executive Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Director and President, INVESCO Funds Group, Inc. (registered investment adviser and registered transfer agent) and AIM GP Canada Inc. (general partner for limited partnerships); Director, Invesco Aim Distributors, Inc. (registered broker dealer); Director and Chairman, Invesco Aim Investment Services, Inc. (registered transfer agent) and INVESCO Distributors, Inc. (registered broker dealer); Director, President and Chairman, INVESCO Inc. (holding company) and Invesco Canada Holdings Inc. (holding company); Chief Executive Officer, AIM Trimark Corporate Class Inc. (corporate mutual fund company) and AIM Trimark Canada Fund Inc. (corporate mutual fund company); Director and Chief Executive Officer, Invesco Trimark Ltd./Invesco Trimark Ltèe (registered investment adviser and registered transfer agent) and Invesco Trimark Dealer Inc. (registered broker dealer); Trustee, President and Principal Executive Officer, The AIM Family of Funds® (other than AIM Treasurer’s Series Trust and Short-Term Investments Trust); Trustee and Executive Vice President, The AIM Family of Funds® (AIM Treasurer’s Series Trust and Short-Term Investments Trust only); and Manager, Invesco PowerShares Capital Management LLC	None
		Formerly: Manager, Invesco PowerShares Capital Management LLC; Director, Chief Executive Officer and President, Invesco Aim Advisors, Inc.; Director, Chairman, Chief Executive Officer and President, Invesco Aim Capital Management, Inc.; President, Invesco Trimark Dealer Inc. and Invesco Trimark Ltd./Invesco Trimark Ltèe; Director and President, AIM Trimark Corporate Class Inc. and AIM Trimark Canada Fund Inc.; Senior Managing Director, Invesco Holding Company Limited; Trustee and Executive Vice President, Tax-Free Investments Trust; Director and Chairman, Fund Management Company (former registered broker dealer); President and Principal Executive Officer, The AIM Family of Funds® (AIM Treasurer’s Series Trust, Short-Term Investments Trust and Tax-Free Investments Trust only); President, AIM Trimark Global Fund Inc. and AIM Trimark Canada Fund Inc.
Independent Trustees
Bruce L. Crockett — 1944 Trustee and Chair	1993	Chairman, Crockett Technology Associates (technology consulting company)	ACE Limited (insurance company); Captaris, Inc. (unified messaging provider); and Investment Company Institute
Bob R. Baker — 1936 Trustee	2004	Retired	None
Frank S. Bayley — 1939 Trustee	2001	Retired Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios)	None
James T. Bunch — 1942 Trustee	2004	Founder, Green, Manning & Bunch Ltd., (investment banking firm)	Board of Governors, Western Golf Association/Evans
			Scholars Foundation and Executive Committee, United States Golf Association
Albert R. Dowden — 1941 Trustee	2000	Director of a number of public and private business corporations, including the Boss Group, Ltd. (private investment and management); Reich & Tang Funds (registered investment company); and Homeowners of America Holding Corporation/Homeowners of America Insurance Company (property casualty company)	Board of Nature’s Sunshine Products, Inc.
		Formerly: Director, Continental Energy Services, LLC (oil and gas pipeline service); Director, CompuDyne Corporation (provider of product and services to the public security market) and Director, Annuity and Life Re (Holdings), Ltd. (reinsurance company); Director, President and Chief Executive Officer, Volvo Group North America, Inc.; Senior Vice President, AB Volvo; Director of various public and private corporations
Jack M. Fields — 1952 Trustee	1997	Chief Executive Officer, Twenty First Century Group, Inc. (government affairs company); and Owner and Chief Executive Officer, Dos Angelos Ranch, L.P. (cattle, hunting, corporate entertainment), Discovery Global Education Fund (non-profit) and Cross Timbers Quail Research Ranch (non-profit)	Administaff
		Formerly: Chief Executive Officer, Texana Timber LP (sustainable forestry company)
Carl Frischling — 1937 Trustee	1993	Partner, law firm of Kramer Levin Naftalis and Frankel LLP	Director, Reich & Tang Funds (16 portfolios)
Prema Mathai-Davis — 1950 Trustee	1998	Retired	None
Lewis F. Pennock — 1942 Trustee	1993	Partner, law firm of Pennock & Cooper	None
Larry Soll — 1942 Trustee	2004	Retired	None
Raymond Stickel, Jr. — 1944 Trustee	2005	Retired Formerly: Director, Mainstay VP Series Funds, Inc. (25 portfolios)	None

1	Mr. Flanagan is considered an interested person of the Trust because he is an officer of the adviser to the Trust, and an officer and a director of Invesco Ltd., ultimate parent of the adviser to the Trust.
2	Mr. Taylor is considered an interested person of the Trust because he is an officer and a director of the adviser to, and a director of the principal underwriter of, the Trust.

T-1

Trustees and Officers - (continued)

Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Other Directorship(s)
Position(s) Held with the Trust	or Officer	During Past 5 Years	Held by Trustee
	Since
Other Officers
Russell C. Burk — 1958 Senior Vice President and Senior Officer	2005	Senior Vice President and Senior Officer of The AIM Family of Funds®	N/A
John M. Zerr — 1962 Senior Vice President, Chief Legal Officer and Secretary	2006	Director, Senior Vice President, Secretary and General Counsel, Invesco Aim Management Group, Inc., Senior Vice President, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Director, Senior Vice President and Secretary, Invesco Aim Distributors, Inc.; Director, Vice President and Secretary, Invesco Aim Investment Services, Inc. and INVESCO Distributors, Inc.; Director and Vice President, INVESCO Funds Group, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The AIM Family of Funds®; and Manager, Invesco PowerShares Capital Management LLC	N/A
		Formerly: Director, Senior Vice President, General Counsel and Secretary, Invesco Aim Advisors, Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco Aim Capital Management, Inc.; Chief Operating Officer and General Counsel, Liberty Ridge Capital, Inc. (an investment adviser); Vice President and Secretary, PBHG Funds (an investment company) and PBHG Insurance Series Fund (an investment company); Chief Operating Officer, General Counsel and Secretary, Old Mutual Investment Partners (a broker-dealer); General Counsel and Secretary, Old Mutual Fund Services (an administrator) and Old Mutual Shareholder Services (a shareholder servicing center); Executive Vice President, General Counsel and Secretary, Old Mutual Capital, Inc. (an investment adviser); and Vice President and Secretary, Old Mutual Advisors Funds (an investment company)
Lisa O. Brinkley — 1959 Vice President	2004	Global Compliance Director, Invesco Ltd.; Chief Compliance Officer, Invesco Aim Distributors, Inc. and Invesco Aim Investment Services, Inc.; and Vice President, The AIM Family of Funds® Formerly: Senior Vice President, Invesco Aim Management Group, Inc.; Senior Vice President and Chief Compliance Officer, Invesco Aim Advisors, Inc. and The AIM Family of Funds®; Vice President and Chief Compliance Officer, Invesco Aim Capital Management, Inc. and Invesco Aim Distributors, Inc.; Vice President, Invesco Aim Investment Services, Inc. and Fund Management Company	N/A
Kevin M. Carome — 1956 Vice President	2003	General Counsel, Secretary and Senior Managing Director, Invesco Ltd.; Director, Invesco Holding Company Limited and INVESCO Funds Group, Inc.; Director and Executive Vice President, IVZ, Inc., Invesco Group Services, Inc., Invesco North American Holdings, Inc. and Invesco Investments (Bermuda) Ltd.; Director and Secretary, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); and Vice President, The AIM Family of Funds®	N/A
		Formerly: Senior Managing Director and Secretary, Invesco North American Holdings, Inc.; Vice President and Secretary, IVZ, Inc. and Invesco Group Services, Inc.; Senior Managing Director and Secretary, Invesco Holding Company Limited; Director, Senior Vice President, Secretary and General Counsel, Invesco Aim Management Group, Inc. and Invesco Aim Advisors, Inc.; Senior Vice President, Invesco Aim Distributors, Inc.; Director, General Counsel and Vice President, Fund Management Company; Vice President, Invesco Aim Capital Management, Inc. and Invesco Aim Investment Services, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The AIM Family of Funds®; Director and Vice President, INVESCO Distributors, Inc.; and Chief Executive Officer and President, INVESCO Funds Group, Inc.
Sheri Morris — 1964 Vice President, Treasurer and Principal Financial Officer	1999	Vice President, Treasurer and Principal Financial Officer, The AIM Family of Funds®; and Vice President, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.) Formerly: Vice President, Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.; Assistant Vice President and Assistant Treasurer, The AIM Family of Funds® and Assistant Vice President, Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A
Karen Dunn Kelley — 1960 Vice President	1993	Head of Invesco’s World Wide Fixed Income and Cash Management Group; Senior Vice President, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Executive Vice President, Invesco Aim Distributors, Inc.; Senior Vice President, Invesco Aim Management Group, Inc.; and Director, Invesco Mortgage Capital Inc.; Vice President, The AIM Family of Funds® (other than AIM Treasurer’s Series Trust and Short-Term Investments Trust); and President and Principal Executive Officer, The AIM Family of Funds® (AIM Treasurer’s Series Trust and Short-Term Investments Trust only) Formerly: Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Director of Cash Management and Senior Vice President, Invesco Aim Advisors, Inc. and Invesco Aim Capital Management, Inc.; President and Principal Executive Officer, Tax-Free Investments Trust; Director and President, Fund Management Company; Chief Cash Management Officer, Director of Cash Management, Senior Vice President, and Managing Director, Invesco Aim Capital Management, Inc.; Director of Cash Management, Senior Vice President, and Vice President, Invesco Aim Advisors, Inc. and The AIM Family of Funds® (AIM Treasurer’s Series Trust, Short-Term Investments Trust and Tax-Free Investments Trust only)	N/A
Lance A. Rejsek — 1967 Anti-Money Laundering Compliance Officer	2005	Anti-Money Laundering Compliance Officer, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Invesco Aim Distributors, Inc., Invesco Aim Investment Services, Inc., and The AIM Family of Funds®	N/A
		Formerly: Anti-Money Laundering Compliance Officer, Fund Management Company, Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.
Todd L. Spillane — 1958 Chief Compliance Officer	2006	Senior Vice President, Invesco Aim Management Group, Inc.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Chief Compliance Officer, The AIM Family of Funds®, INVESCO Private Capital Investments, Inc. (holding company), Invesco Private Capital, Inc. (registered investment adviser) and Invesco Senior Secured Management, Inc. (registered investment adviser); Vice President, Invesco Aim Distributors, Inc. and Invesco Aim Investment Services, Inc.	N/A
		Formerly: Senior Vice President and Chief Compliance Officer, Invesco Aim Advisors, Inc. and Invesco Aim Capital Management, Inc.; Chief Compliance Officer, Invesco Global Asset Management (N.A.), Inc.; Vice President, Invesco Aim Capital Management, Inc. and Fund Management Company

The Statement of Additional Information of the Trust includes additional information about the Fund’s Trustees and is available upon request, without charge, by calling 1.800.959.4246. Please refer to the Fund’s prospectus for information on the Fund’s sub-advisers.

Office of the Fund	Investment Adviser	Distributor	Auditors
11 Greenway Plaza, Suite 100	Invesco Advisers, Inc.	Invesco Aim Distributors, Inc.	PricewaterhouseCoopers LLP
Houston, TX 77046-1173	1555 Peachtree Street, N.E.	11 Greenway Plaza, Suite 100	1201 Louisiana Street, Suite 2900
	Atlanta, GA 30309	Houston, TX 77046-1173	Houston, TX 77002-5678
Counsel to the Fund	Counsel to the	Transfer Agent	Custodian
Stradley Ronon Stevens & Young, LLP	Independent Trustees	Invesco Aim Investment Services, Inc.	State Street Bank and Trust Company
2600 One Commerce Square	Kramer, Levin, Naftalis & Frankel LLP	P.O. Box 4739	225 Franklin
Philadelphia, PA 19103	1177 Avenue of the Americas	Houston, TX 77210-4739	Boston, MA 02110-2801
	New York, NY 10036-2714

T-2

AIM V.I. Money Market Fund

Annual Report to Shareholders n December 31, 2009

The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter-ends. For the second and fourth quarters, the lists appear in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The Fund’s Form N-Q filings are available on the SEC website, sec.gov. Copies of the Fund’s Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers for the Fund are 811-07452 and 033-57340. The Fund’s most recent portfolio holdings, as filed on Form N-Q, have also been made available to insurance companies issuing variable annuity contracts and variable life insurance policies (“variable products”) that invest in the Fund.

A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, from our Client Services department at 800 410 4246 or on the Invesco Aim website, invescoaim.com. On the home page, scroll down and click on Proxy Policy. The information is also available on the SEC website, sec.gov.

Information regarding how the Fund voted proxies related to its portfolio securities during the 12 months ended June 30, 2009, is available at our website, invescoaim.com. Click the About Us tab at the top of the home page; click Legal Information; and then click Proxy Voting Search. The information is also available on the SEC website, sec.gov.

Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Aim Distributors, Inc. is the U.S. distributor for Invesco Ltd.’s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd.

This report must be accompanied or preceded by a currently effective Fund prospectus and variable product prospectus, which contain more complete information, including sales charges and expenses. Investors should read each carefully before investing.

Invesco Aim Distributors, Inc.

NOT FDIC INSURED  |  MAY LOSE VALUE  |  NO BANK GUARANTEE

Management’s Discussion of Fund Performance

Performance summary

Yields on shares of AIM V.I. Money Market Fund declined significantly during the year ended December 31, 2009. The seven-day SEC yield on the Fund’s Series I shares was 0.76% at the beginning of the year and 0.02% at its close. The seven-day SEC yield on the Fund’s Series II shares was 0.52% at the beginning of the year and 0.02% at its close. (Had the adviser not waived fees and/or reimbursed expenses, the seven-day SEC yield on the Fund’s Series I and Series II shares would have been -2.48% and -4.48%, respectively, as of December 31, 2009.)

   As of December 31, 2009, the Fund’s total net assets stood at $35.1 million and the Fund’s weighted average maturity was 34 days.

How we invest

The Fund invests only in high-quality, U.S.-dollar-denominated, short-term debt obligations, including:

n Securities issued by the U.S. government and its agencies.

n Bankers’ acceptances, certificates of deposit and time deposits from U.S. and foreign banks.

n Repurchase agreements.

n Commercial paper.

n Taxable municipal securities.

n Master notes.

n Cash equivalents.

   The Fund may invest a portion of its assets in U.S.-dollar-denominated foreign securities. The Fund invests in accordance with industry-standard requirements for money market funds for the quality, maturity and diversification of investments. In selecting securities for the Fund, we focus on securities that offer safety, liquidity and a competitive yield.

Market conditions and your Fund

At the start of the year covered by this report, there was widespread pessimism about where the economy and markets were headed; there was genuine fear that we might be facing the possibility of a global depression and that credit and equity markets could collapse. By early March 2009, however, the unprecedented, coordinated actions of governments and central banks around the world appeared likely to have averted catastrophe, causing global stock markets to rebound. They continued to rise virtually uninterrupted for the remainder of the year.

   At the start of 2009, fear of economic calamity caused corporations and individual investors to sell equities, raise cash and seek out relatively safe, liquid and short-term investments – particularly

U.S. Treasury securities. This heightened demand for such investments caused yields to decline from already low rates. Even after credit markets calmed somewhat and stock markets bottomed, many risk-averse investors continued to seek refuge in cash or cash equivalents.

   The U.S. economy remained weak for much of the year. After contracting in the third and fourth quarters of 2008, U.S. gross domestic product (GDP) – the broadest measure of overall economic activity – contracted at annualized rates of 6.4% and 0.7% in the first and second quarters of 2009, respectively.¹ In the third quarter, GDP expanded at an annualized rate of 2.2%, its strongest quarterly rate of growth in two years.¹

   In its final monetary policy announcement of 2009, the U.S. Federal Reserve (the Fed) cited several hopeful signs that economic activity was picking up.² The Fed said:

n The housing sector showed some signs of recent improvement.

n Household spending appeared to be expanding moderately, despite high unemployment, modest income growth and tight credit.

n Businesses continued to cut back on fixed investment, albeit at a slower pace than previously.

   Nonetheless, unemployment statistics cast a pall over other data showing that the U.S. economy was improving. The unemployment rate rose from 7.7% to 10.0% in 2009.³ Even workers who remained employed worried about their individual job security.

   As a result, many Americans decided to spend less and save more. One government estimate suggested Americans saved just 1.7% of their disposable personal income in 2007 and just 2.7%

in 2008.¹ That same estimate suggested Americans saved 3.7%, 5.4% and 4.5% of their disposable personal income in the first, second and third quarters of 2009, respectively.¹

   At the start of 2009, three-month Treasury bills yielded 0.11% and 30-year Treasury bonds yielded 2.69%.⁴ By December 31, 2009, yields on three-month Treasuries had declined to 0.07% while yields on 30-year Treasuries had risen to 4.64%.⁴ Low yields on short-term Treasuries were due chiefly to the Fed’s stimulative monetary policies that began in 2008 – and investor preference for relatively safe, liquid and short-term investments during a period of economic uncertainty. Because money market funds invest in such securities, the yield you earned on your investment in AIM V.I. Money Market Fund remained low throughout 2009.

   On a positive note, the yield curve was positive (meaning that short-term yields were lower than long-term yields) and it generally steepened throughout 2009. (A yield curve is a graph that shows the yields of similarly rated fixed income investments according to their maturities.) While no one can predict the future performance of the economy, positive and steepening yield curves historically have signaled relative economic health and expansion.

   Thank you for your investment in AIM V.I. Money Market Fund.

1	Bureau of Economic Analysis
2	U.S. Federal Reserve
3	Bureau of Labor Statistics
4	Barclays Capital

The views and opinions expressed in management’s discussion of Fund performance are those of Invesco Advisers, Inc. These views and opinions are subject to change at any time based on factors such as market and economic conditions. These views and opinions may not be relied upon as investment advice or recommendations, or as 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 Invesco Advisers, Inc. 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.

Team managed by Invesco Advisers, Inc.

Performance quoted is past performance and cannot guarantee comparable future results; current performance may be lower or higher. Visit invescoaim.com for the most recent month-end performance.

An investment in the Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency and is not a deposit or other obligation of, or guaranteed by, a depository institution. Although the Fund seeks to preserve the value of your investment at $1 per share, it is possible to lose money by investing in the Fund.

AIM V.I. Money Market Fund

AIM V.I. Money Market Fund’s investment objective is to provide as high a level of current income as is consistent with the preservation of capital and liquidity.

n Unless otherwise stated, information presented in this report is as of December 31, 2009, and is based on total net assets.

n Unless otherwise noted, all data provided by Invesco.

Principal risks of investing in the Fund

Credit risk is the risk of loss on an investment due to the deterioration of an issuer’s financial health. Such a deterioration of financial health may result in a reduction of the credit rating of the issuer’s securities and may lead to the issuer’s inability to honor its contractual obligations, including making timely payment of interest and principal.

   Foreign securities have additional risks, including exchange rate changes, political and economic upheaval, relative lack of information, relatively low market liquidity, and the potential lack of strict financial and accounting controls and standards.

   Interest rate risk refers to the risk that bond prices generally fall as interest rates rise and vice versa.

   There is no guarantee that the investment techniques and risk analysis used by the Fund’s portfolio managers will produce the desired results.

   The prices of securities held by the Fund may decline in response to market risks.

   The value of, payment of interest on and repayment of principal for the Fund as well as the Fund’s ability to sell a municipal security may be affected by constitutional amendments, legislative enactments, executive orders, administrative regulations, voter initiatives and the economics of the regions where the issuers in which the Fund invests are located.

   If the seller of a repurchase agreement in which the Fund invests defaults on its obligation or declares bankruptcy, the Fund may experience delays in selling the securities underlying the repurchase agreement.

   To the extent that the Fund is concentrated in securities of issuers in the banking and financial services industries, the Fund’s performance will depend to a greater extent on the overall condition of those industries. The value of these

securities can be sensitive to changes in government regulation, interest rates and economic downturns in the U.S. and abroad.

   The Fund may invest in obligations issued by agencies and instrumentalities of the U.S. government that may vary in the level of support they receive from the U.S. government. The U.S. government may choose not to provide financial support to U.S.-government-sponsored agencies or instrumentalities if it is not legally obligated to do so. In this case, if the issuer defaulted, the fund holding securities of such an issuer might not be able to recover its investment from the U.S. government.

Portfolio Composition
Maturity distribution of Fund holdings, in days, as of 12/31/09
1-7	32.8	%
8-30	27.4
31-90	34.8
91-180	2.2
181+	2.8

The number of days to maturity of each holding is determined in accordance with the provisions of Rule 2a-7 of the Investment Company Act of 1940.

The performance data quoted represent past performance and cannot guarantee comparable future results; current performance may be lower or higher. Please see your variable product issuer or financial adviser for the most recent

month-end variable product performance. Performance figures reflect Fund expenses, reinvested distributions and changes in net asset value. Investment return and principal value will fluctuate so that you may have a gain or loss when you sell shares.

   AIM V.I. Money Market Fund, a series portfolio of AIM Variable Insurance Funds, is currently offered through insurance companies issuing variable products. You cannot purchase shares of the Fund directly. Performance figures given represent the Fund and are not intended to reflect actual variable product values. They do not reflect sales charges, expenses and fees assessed in connection with a variable product. Sales charges,

expenses and fees, which are determined by the variable product issuers, will vary and will lower the total return.

   The most recent month-end performance data at the Fund level, excluding variable product charges, is available on the Invesco Aim automated information line, 866 702 4402. As mentioned above, for the most recent month-end performance including variable product charges, please contact your variable product issuer or financial adviser.

   Had the adviser not waived fees and/ or reimbursed expenses, performance would have been lower.

AIM V.I. Money Market Fund

Schedule of Investments

December 31, 2009

						Principal
	Interest			Maturity		Amount
	Rate			Date		(000)		Value
Commercial Paper–69.54%(a)
Asset-Backed Securities–Commercial Loans/Leases–2.84%
Atlantis One Funding Corp.(b)(c)		0.40	%		02/09/10	$	1,000	$	999,567
Asset-Backed Securities–Consumer Receivables–17.02%
Amsterdam Funding Corp.(b)		0.19	%		02/03/10		1,000		999,826
Bryant Park Funding LLC(b)		0.18	%		01/15/10		1,000		999,930
Old Line Funding, LLC(b)		0.30	%		02/10/10		1,536		1,535,488
Sheffield Receivables Corp.(b)		0.21	%		01/07/10		450		449,984
Sheffield Receivables Corp.(b)		0.22	%		01/08/10		1,000		999,957
Thunder Bay Funding, LLC(b)		0.32	%		02/12/10		1,000		999,627
									5,984,812
Asset-Backed Securities–Fully Backed–4.26%
Straight-A Funding LLC–Series 1, (CEP–Federal Financing Bank)(b)		0.21	%		01/11/10		1,500		1,499,912
Asset-Backed Securities–Fully Supported Bank–12.79%
Clipper Receivables Co., LLC (CEP–State Street Bank & Trust)(b)		0.25	%		01/05/10		1,000		999,972
Crown Point Capital Co., LLC–Series A, (Multi CEP’s-Liberty Hampshire Co., LLC; agent)(b)		0.50	%		01/06/10		1,000		999,931
LMA-Americas LLC (CEP–Credit Agricole S.A.)(b)(c)		0.20	%		02/19/10		700		699,810
Surrey Funding Corp. (CEP–Barclays Bank PLC)(b)(c)		0.22	%		01/15/10		1,100		1,099,906
Surrey Funding Corp. (CEP–Barclays Bank PLC)(b)(c)		0.22	%		03/09/10		700		699,713
									4,499,332
Asset-Backed Securities–Multi-Purpose–12.99%
Atlantic Asset Securitization LLC(b)		0.22	%		03/11/10		1,380		1,379,418
Ciesco, LLC(b)		0.20	%		01/13/10		750		749,950
Gemini Securitization Corp., LLC(b)		0.20	%		01/12/10		1,500		1,499,908
Regency Markets No. 1, LLC(b)(c)		0.22	%		01/13/10		941		940,931
									4,570,207
Asset-Backed Securities–Securities–4.41%
Cancara Asset Securitisation Ltd./LLC(b)(c)		0.30	%		01/13/10		1,000		999,900
Cancara Asset Securitisation Ltd./LLC(b)(c)		0.25	%		02/16/10		550		549,824
									1,549,724
Diversified Banks–10.97%
Banco Bilbao Vizcaya Argentaria, S.A.(c)		0.24	%		03/19/10		1,000		999,487
Banco Bilbao Vizcaya Argentaria, S.A.(c)		0.26	%		04/30/10		800		799,312
Lloyds TSB Bank PLC(c)		0.20	%		02/17/10		1,060		1,059,723
Societe Generale North America, Inc.(c)		0.35	%		01/25/10		1,000		999,770
									3,858,292
Regional Banks–4.26%
ANZ National (Int’l) Ltd.(b)(c)		0.23	%		03/01/10		1,500		1,499,435
Total Commercial Paper (Cost $24,461,281)									24,461,281

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

AIM V.I. Money Market Fund

						Principal
	Interest			Maturity		Amount
	Rate			Date		(000)		Value
Variable Rate Demand Notes–18.40%(d)
Credit Enhanced–18.40%
Benjamin Rose Institute (The) (Kethley House); Series 2005, Taxable Notes (LOC–JPMorgan Chase Bank, N.A.)(e)		0.29	%		12/01/28	$	1,800	$	1,800,000
Hamilton (County of), Ohio (Children’s Hospital Medical Center); Series 1997 A, Hospital Facilities RB (LOC–PNC Bank, N.A.)(e)		0.23	%		05/15/17		600		600,000
Pennsylvania (State of) Economic Development Financing Authority (Topwater Investments Inc.); Series 2007 B-1, RB (LOC–PNC Bank, N.A.)(e)		0.29	%		08/01/35		660		660,000
Pitney Road Partners, LLC; Series 2008, Notes (CEP–General Electric Capital Corp.)(b)		0.50	%		07/01/25		2,375		2,375,000
Rock Island (County of), Illinois Metropolitan Airport Authority (Quad City International Airport Air Freight Project); Series 1998 A, Priority RB (LOC–U.S. Bank, N.A.)(e)		0.25	%		12/01/18		535		535,000
Saint Paul (City of), Minnesota Port Authority; Series 2009-10 CC, District Cooling RB (LOC–Deutsche Bank AG)(c)(e)		0.28	%		03/01/29		500		500,000
Total Variable Rate Demand Notes (Cost $6,470,000)									6,470,000
Certificates of Deposit–2.84%
Calyon (Cost $1,000,000)		0.70	%		09/10/10		1,000		1,000,000
Medium-Term Notes–2.84%
Bear Stearns Cos. Inc. Sr. Unsec. Floating Rate MTN(f) (Cost $1,000,000)		0.36	%		02/23/10		1,000		1,000,000
TOTAL INVESTMENTS (excluding Repurchase Agreements)–93.62% (Cost $32,931,281)									32,931,281

				Repurchase
				Amount
Repurchase Agreements–7.87%(g)
RBC Capital Markets Corp., Joint agreement dated 12/31/09, aggregate maturing value of $250,000,278 (collateralized by U.S. Government sponsored agency obligations valued at $255,000,000; 4.00%-5.57%, 12/01/19-12/01/39), (Cost $2,767,057)	0.01	%	01/04/10		2,767,060		2,767,057
TOTAL INVESTMENTS(h)(i)--101.49% (Cost $35,698,338)							35,698,338
OTHER ASSETS LESS LIABILITIES–(1.49)%							(523,174	)
NET ASSETS–100.00%						$	35,175,164

Investment Abbreviations:

CEP	– Credit Enhancement Provider
LOC	– Letter of Credit
MTN	– Medium-Term Notes
RB	– Revenue Bonds
Sr.	– Senior
Unsec.	– Unsecured

Notes to Schedule of Investments:

(a)	Security may be traded on a discount basis. The interest rate shown represents the discount rate at the time of purchase by the Fund.
(b)	Security purchased or received in a transaction exempt from registration under the Securities Act of 1933, as amended. The security may be resold pursuant to an exemption from registration under the 1933 Act, typically to qualified institutional buyers. The aggregate value of these securities at December 31, 2009 was $22,977,989, which represented 65.32% of the Fund’s Net Assets.
(c)	The security is credit guaranteed, enhanced or has credit risk by a foreign entity. The foreign credit exposure to countries other than the United States of America (as a percentage of net assets) is summarized as follows: United Kingdom: 15.2%; Spain: 5.1%; other countries less than 5% each: 13.4%.
(d)	Demand security payable upon demand by the Fund at specified time intervals no greater than thirteen months. Interest rate is redetermined periodically. Rate shown is the rate in effect on December 31, 2009.
(e)	Principal and interest payments are fully enhanced by a letter of credit from the bank listed or a predecessor bank, branch or subsidiary.
(f)	Interest or dividend rate is redetermined periodically. Rate shown is the rate in effect on December 31, 2009.
(g)	Principal amount equals value at period end. See Note 1I.
(h)	Also represents cost for federal income tax purposes.
(i)	This table provides a listing of those entities that have either issued, guaranteed, backed or otherwise enhanced the credit quality of more than 5% of the securities held in the portfolio. In instances where the entity has guaranteed, backed or otherwise enhanced the credit quality of a security, it is not primarily responsible for the issuer’s obligations but may be called upon to satisfy the issuer’s obligations.

Entities	Percentage
JPMorgan Chase Bank, N.A.		8.0	%
General Electric Capital Corp.		6.8
Banco Bilbao Vizcaya Argentaria, S.A.		5.1
Barclays Bank PLC		5.1

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

AIM V.I. Money Market Fund

Statement of Assets and Liabilities

December 31, 2009

Assets:
Investments, at value and cost	$	35,698,338
Receivables for:
Fund shares sold		1,389
Interest		4,634
Fund expenses absorbed		6,892
Investment for trustee deferred compensation and retirement plans		35,381
Total assets		35,746,634
Liabilities:
Payables for:
Fund shares reacquired		491,059
Accrued fees to affiliates		17,497
Accrued other operating expenses		19,061
Trustee deferred compensation and retirement plans		43,853
Total liabilities		571,470
Net assets applicable to shares outstanding	$	35,175,164
Net assets consist of:
Shares of beneficial interest	$	35,175,164
Net Assets:
Series I	$	33,485,634
Series II	$	1,689,530
Shares outstanding, $0.001 par value per share, unlimited number of shares authorized:
Series I		33,484,528
Series II		1,689,210
Series I:
Net asset value per share	$	1.00
Series II:
Net asset value per share	$	1.00

Statement of Operations

For the year ended December 31, 2009

Investment income:
Interest	$	331,845
Expenses:
Advisory fees		174,330
Administrative services fees		127,879
Custodian fees		6,190
Distribution fees — Series II		4,799
Transfer agent fees		4,596
Trustees’ and officers’ fees and benefits		21,202
Professional services fees		29,290
Other		28,088
Total expenses		396,374
Less: Fees waived		(114,614	)
Net expenses		281,760
Net investment income		50,085
Net increase in net assets resulting from operations	$	50,085

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

AIM V.I. Money Market Fund

Statement of Changes in Net Assets

For the years ended December 31, 2009 and 2008

	2009			2008
Operations:
Net investment income	$	50,085		$	1,028,001
Distributions to shareholders from net investment income:
Series I		(48,846	)		(986,413	)
Series II		(1,239	)		(41,588	)
Total distributions from net investment income		(50,085	)		(1,028,001	)
Share transactions-net:
Series I		(15,518,673	)		2,512,068
Series II		(576,067	)		(249,612	)
Net increase (decrease) in net assets resulting from share transactions		(16,094,740	)		2,262,456
Net increase (decrease) in net assets		(16,094,740	)		2,262,456
Net assets:
Beginning of year		51,269,904			49,007,448
End of year (includes undistributed net investment income of $0 and $7,137, respectively)	$	35,175,164		$	51,269,904

Notes to Financial Statements

December 31, 2009

NOTE 1—Significant Accounting Policies

AIM V.I. Money Market Fund (the “Fund”) is a series portfolio of AIM Variable Insurance Funds (the “Trust”). The Trust is a Delaware statutory trust registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end series management investment company consisting of twenty-one separate portfolios, (each constituting a “Fund”). The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Matters affecting each Fund or class will be voted on exclusively by the shareholders of such Fund or class. Current Securities and Exchange Commission (“SEC”) guidance, however, requires participating insurance companies offering separate accounts to vote shares proportionally in accordance with the instructions of the contract owners whose investments are funded by shares of each Fund or class.

  The Fund’s investment objective is to provide as high a level of current income as is consistent with the preservation of capital and liquidity.

  The Fund currently offers two classes of shares, Series I and Series II, both of which are offered to insurance company separate accounts funding variable annuity contracts and variable life insurance policies (“variable products”).

  The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements.

A.	Security Valuations — The Fund’s securities are recorded on the basis of amortized cost which approximates value as permitted by Rule 2a-7 under the 1940 Act. This method values a security at its cost on the date of purchase and, thereafter, assumes a constant amortization to maturity of any premiums or accretion of any discounts.
	Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
B.	Securities Transactions and Investment Income — Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income, adjusted for amortization of premiums and accretion of discounts on investments, is recorded on the accrual basis from settlement date. Paydown gains and losses on mortgage and asset-backed securities are recorded as adjustments to interest income.
	The Fund may periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain/loss for investments no longer held and as unrealized gain/loss for investments still held.
	Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of realized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the realized net gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the Fund’s net asset value and, accordingly, they reduce the Fund’s total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in the Statement of Operations and Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the adviser.

AIM V.I. Money Market Fund

	The Fund allocates realized and unrealized capital gains and losses to a class based on the relative net assets of each class. The Fund allocates income to a class based on the relative value of the settled shares of each class.
C.	Country Determination — For the purposes of making investment selection decisions and presentation in the Schedule of Investments, the investment adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuer’s securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted.
D.	Distributions — Distributions from income are declared daily and paid monthly to separate accounts of participating insurance companies. Distributions from net realized gain, if any, are generally paid annually and recorded on ex-dividend date.
E.	Federal Income Taxes — The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code necessary to qualify as a regulated investment company and to distribute substantially all of the Fund’s taxable earnings to shareholders. As such, the Fund will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements.
	The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.
F.	Expenses — Fees provided for under the Rule 12b-1 plan of a particular class of the Fund and which are directly attributable to that class are charged to the operations of such class. All other expenses are allocated among the classes based on relative net assets.
G.	Accounting Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print, which is generally 45 days from the period-end date.
H.	Indemnifications — Under the Trust’s organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Fund’s servicing agreements, that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote.
I.	Repurchase Agreements — The Fund may enter into repurchase agreements. Collateral on repurchase agreements, including the Fund’s pro-rata interest in joint repurchase agreements, is taken into possession by the Fund upon entering into the repurchase agreement. Eligible securities for collateral are securities consistent with the Fund’s investment objectives and may consist of U.S. Government Securities, U.S. Government Sponsored Agency Securities and/or, Investment Grade Debt Securities. Collateral consisting of U.S. Government Securities and U.S. Government Sponsored Agency Securities is marked to market daily to ensure its market value is at least 102% of the sales price of the repurchase agreement. Collateral consisting of Investment Grade Debt Securities is marked to market daily to ensure its market value is at least 105% of the sales price of the repurchase agreement. The investments in some repurchase agreements, pursuant to procedures approved by the Board of Trustees, are through participation with other mutual funds, private accounts and certain non-registered investment companies managed by the investment advisor or its affiliates (“Joint repurchase agreements”). The repurchase amount of the repurchase agreement is equal to the value at period-end. If the seller of a repurchase agreement fails to repurchase the security in accordance with the terms of the agreement, the Fund might incur expenses in enforcing its rights, and could experience losses, including a decline in the value of the collateral and loss of income.
J.	Treasury Guarantee Program — The Board of Trustees approved the participation of the Funds in the U.S. Department of Treasury’s (the “Treasury Department’’) Temporary Guarantee Program for Money Market Funds (the “Program”) as extended except as noted below. Under the Program, the Treasury Department will guarantee shareholders in the Fund that they will receive $1 for each Fund share held by them as of the close of business on September 19, 2008, in the event that such Fund (in which they were invested as of September 19, 2008) liquidates and the per share value at the time of liquidation is less than $0.995. On April 7, 2009, the Fund’s Board approved to participate in the final extension of the Program through September 18, 2009. The Program expired on September 18, 2009.

NOTE 2—Advisory Fees and Other Fees Paid to Affiliates

The Trust has entered into a master investment advisory agreement with Invesco Advisers, Inc. (the “Adviser” or “Invesco”). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Adviser based on the annual rate of the Fund’s average daily net assets as follows:

Average Net Assets	Rate
First $250 million		0	.40%
Over $250 million		0	.35%

  Under the terms of a master sub-advisory agreement approved by shareholders of the Funds between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Trimark Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Funds, may pay 40% of the

AIM V.I. Money Market Fund

fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide discretionary investment management services to each Fund based on the percentage of assets allocated to such Sub-Adviser(s).

  On December 31, 2009, Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc., Invesco Private Asset Management, Inc. and Invesco Global Asset Management (N.A.), Inc. merged into Invesco Institutional (N.A.), Inc. and the consolidated adviser firm was renamed Invesco Advisers, Inc.

  The Adviser has contractually agreed to waive advisory fees and/or reimburse expenses of all shares to the extent necessary to limit total annual fund operating expenses after fee waiver and/or expense reimbursement (excluding certain items discussed below) of Series I shares to 1.30% and Series II shares to 1.45% of average daily net assets, through at least April 30, 2011. In determining the Adviser’s obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the total annual fund operating expenses after fee waiver and/or expense reimbursement to exceed the numbers reflected above: (1) interest; (2) taxes; (3) extraordinary or non-routine items, including payments to participate in the United States Treasury Temporary Guarantee Program (the “Program”); (4) expenses related to a merger or reorganization, as approved by the Fund’s Board of Trustees; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. The Board of Trustees or Invesco may terminate the fee waiver arrangement at any time. The Adviser did not waive fees and/or reimburse expenses during the period under this expense limitation.

  The Adviser and/or Invesco Aim Distributors, Inc. (“IADI”) voluntarily waived fees and/or reimbursed expenses in order to increase the Fund’s yield. Voluntary fee waivers and/or reimbursements may be modified at any time upon consultation with the Board of Trustees without further notice to investors.

  For the year ended December 31, 2009, the Adviser voluntarily waived advisory fees of $110,784 and IADI reimbursed class level expenses of $3,830 for Series II shares to increase the fund’s yield.

  At the request of the Trustees of the Trust, Invesco Ltd. agreed to reimburse expenses incurred by the Fund in connection with market timing matters in the AIM Funds, which may include legal, audit, shareholder reporting, communications and trustee expenses. For the year ended December 31, 2009, Invesco Ltd. did not reimburse any expenses.

  The Trust has entered into a master administrative services agreement with Invesco pursuant to which the Fund has agreed to pay Invesco a fee for costs incurred in providing accounting services and fund administrative services to the Fund and to reimburse Invesco for administrative services fees paid to insurance companies that have agreed to provide services to the participants of separate accounts. These administrative services provided by the insurance companies may include, among other things: the printing of prospectuses, financial reports and proxy statements and the delivery of the same to existing participants; the maintenance of master accounts; the facilitation of purchases and redemptions requested by the participants; and the servicing of participants’ accounts. Pursuant to such agreement, for the year ended December 31, 2009, Invesco was paid $50,000 for accounting and fund administrative services and reimbursed $77,879 for services provided by insurance companies.

  The Trust has entered into a transfer agency and service agreement with Invesco Aim Investment Services, Inc. (“IAIS”) pursuant to which the Fund has agreed to pay IAIS a fee for providing transfer agency and shareholder services to the Fund and reimburse IAIS for certain expenses incurred by IAIS in the course of providing such services. For the year ended December 31, 2009, expenses incurred under the agreement are shown in the Statement of Operations as transfer agent fees.

  The Trust has entered into a master distribution agreement with IADI to serve as the distributor for the Fund. The Trust has adopted a plan pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund’s Series II shares (the “Plan”). The Fund, pursuant to the Plan, pays IADI compensation at the annual rate of 0.25% of the Fund’s average daily net assets of Series II shares. Of the Plan payments, up to 0.25% of the average daily net assets of the Series II shares may be paid to insurance companies who furnish continuing personal shareholder services to customers who purchase and own Series II shares of the Fund. For the year ended December 31, 2009, expenses incurred under the Plan are detailed in the Statement of Operations as distribution fees.

  Certain officers and trustees of the Trust are officers and directors of Invesco, IAIS and/or IADI.

NOTE 3—Additional Valuation Information

Generally Accepted Accounting Principles (“GAAP”) defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3) generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment’s assigned level:

Level 1 —	Prices are determined using quoted prices in an active market for identical assets.
Level 2 —	Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk and others.
Level 3 —	Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information.

  The following is a summary of the tiered valuation input levels, as of December 31, 2009. The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.

	Level 1		Level 2		Level 3		Total
Short-term Investments	$	—	$	35,698,338	$	—	$	35,698,338

AIM V.I. Money Market Fund

NOTE 4—Security Transactions with Affiliated Funds

The Fund is permitted to purchase or sell securities from or to certain other AIM Funds under specified conditions outlined in procedures adopted by the Board of Trustees of the Trust. The procedures have been designed to ensure that any purchase or sale of securities by the Fund from or to another fund or portfolio that is or could be considered an affiliate by virtue of having a common investment adviser (or affiliated investment advisers), common Trustees and/or common officers complies with Rule 17a-7 of the 1940 Act. Further, as defined under the procedures, each transaction is effected at the current market price. Pursuant to these procedures, for the year ended December 31, 2009, the Fund engaged in securities purchases of $5,085,501 and securities sales of $2,690,306.

NOTE 5—Trustees’ and Officers’ Fees and Benefits

“Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and “Trustees’ and Officers’ Fees and Benefits” also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various AIM Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees are eligible to participate in a retirement plan that provides for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former Trustees who also participate in a retirement plan and receive benefits under such plan. “Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund.

  During the year ended December 31, 2009, the Fund paid legal fees of $2,878 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A member of that firm is a Trustee of the Trust.

NOTE 6—Cash Balances

The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with The Bank of New York Mellon, the custodian bank. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (i) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (ii) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.

NOTE 7—Distributions to Shareholders and Tax Components of Net Assets

Tax Character of Distributions to Shareholders Paid During the Years Ended December 31, 2009 and 2008:

	2009		2008
Ordinary income	$	50,085	$	1,028,001

Tax Components of Net Assets at Period-End:

	2009
Undistributed ordinary income	$	46,558
Temporary book/tax differences		(46,558	)
Shares of beneficial interest		35,175,164
Total net assets	$	35,175,164

  The temporary book/tax differences are a result of timing differences between book and tax recognition of income and/or expenses. The Fund’s temporary book/tax differences are the result of the trustee deferral of compensation and retirement plan benefits.

  The Fund does not have a capital loss carryforward at period-end.

NOTE 8—Reclassification of Permanent Differences

Primarily as a result of differing book/tax treatment of undistributed income and nondeductible income taxes, on December 31, 2009, undistributed net investment income was decreased by $7,137 and shares of beneficial interest increased by $7,137. This reclassification had no effect on the net assets of the Fund.

AIM V.I. Money Market Fund

NOTE 9—Share Information

	Summary of Share Activity
	Year ended						Year ended
	December 31, 2009(a)						December 31, 2008
	Shares			Amount			Shares			Amount
Sold:
Series I		14,958,501		$	14,958,537			34,854,533		$	34,854,533
Series II		51,965			51,965			277,951			277,951
Issued as reinvestment of dividends:
Series I		48,883			48,846			986,376			986,376
Series II		1,238			1,239			41,587			41,587
Reacquired:
Series I		(30,526,056	)		(30,526,056	)		(33,328,841	)		(33,328,841	)
Series II		(629,271	)		(629,271	)		(569,150	)		(569,150	)
Net increase (decrease) in share activity		(16,094,740	)	$	(16,094,740	)		2,262,456		$	2,262,456

^(a) There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 88% of the outstanding shares of the Fund. The Fund and the Fund’s principal underwriter or adviser, are parties to participation agreements with these entities whereby these entities sell units of interest in separate accounts funding variable products that are invested in the Fund. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as, securities brokerage, third party record keeping and account servicing and administrative services. The Trust has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially.

NOTE 10—Financial Highlights

The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.

																			Ratio of net
	Net asset					Dividends										Ratio of			investment
	value,		Net			from net			Net asset					Net assets,		expenses			income
	beginning		investment			investment			value, end		Total			end of period		to average			to average
	of period		income			income			of period		Return(a)			(000s omitted)		net assets			net assets
Series I
Year ended 12/31/09	$	1.00	$	0.00	(b)	$	(0.00	)	$	1.00		0.11	%	$	33,486		0.65	%(c)(d)		0.11	%(c)
Year ended 12/31/08		1.00		0.02	(b)		(0.02	)		1.00		2.04			49,004		0.86			2.02
Year ended 12/31/07		1.00		0.04			(0.04	)		1.00		4.54			46,492		0.86			4.45
Year ended 12/31/06		1.00		0.04			(0.04	)		1.00		4.27			43,568		0.90			4.20
Year ended 12/31/05		1.00		0.02			(0.02	)		1.00		2.51			44,923		0.82			2.46
Series II
Year ended 12/31/09		1.00		0.00	(b)		(0.00	)		1.00		0.06			1,690		0.70	(c)(d)		0.06	(c)
Year ended 12/31/08		1.00		0.02	(b)		(0.02	)		1.00		1.78			2,266		1.11			1.77
Year ended 12/31/07		1.00		0.04			(0.04	)		1.00		4.28			2,515		1.11			4.20
Year ended 12/31/06		1.00		0.04			(0.04	)		1.00		4.01			2,341		1.15			3.95
Year ended 12/31/05		1.00		0.02			(0.02	)		1.00		2.26			3,080		1.07			2.21

(a)	Includes adjustments in accordance with accounting principles generally accepted in the United States of America. Total returns do not reflect charges assessed in connection with a variable product, which if included would reduce total returns.
(b)	Calculated using average shares outstanding.
(c)	Ratios are based on average daily net assets (000’s omitted) of $41,663 and $1,919 for Series I and Series II shares, respectively.
(d)	After fee waivers and/or expense reimbursements. Ratio of expenses to average net assets prior to fee waivers and/or expense reimbursements was 0.90% and 1.15% for Series I and Series II shares, respectively.

AIM V.I. Money Market Fund

Report of Independent Registered Public Accounting Firm

To the Board of Trustees of AIM Variable Insurance Funds

and Shareholders of AIM V.I. Money Market Fund:

In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of AIM V.I. Money Market Fund (one of the funds constituting AIM Variable Insurance Funds, hereafter referred to as the “Fund”) at December 31, 2009, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for the each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at December 31, 2009 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.

PRICEWATERHOUSECOOPERS LLP

February 10, 2010

Houston, Texas

AIM V.I. Money Market Fund

Calculating your ongoing Fund expenses

Example

As a shareholder of the Fund, you incur ongoing costs, including management fees; distribution and/or service fees (12b-1); and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period July 1, 2009 through December 31, 2009.

  The actual and hypothetical expenses in the examples below do not represent the effect of any fees or other expenses assessed in connection with a variable product; if they did, the expenses shown would be higher while the ending account values shown would be lower.

Actual expenses

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

Hypothetical example for comparison purposes

The table below also provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return.

  The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

  Please note that the expenses shown in the table are meant to highlight your ongoing costs. Therefore, the hypothetical information is useful in comparing ongoing costs, and will not help you determine the relative total costs of owning different funds.

							HYPOTHETICAL
			ACTUAL				(5% annual return before expenses)
	Beginning		Ending		Expenses		Ending		Expenses		Annualized
	Account Value		Account Value		Paid During		Account Value		Paid During		Expense
Class	(07/01/09)		(12/31/09)1		Period2		(12/31/09)		Period2		Ratio
Series I	$	1,000.00	$	1,000.20	$	2.17	$	1,023.04	$	2.19		0.43	%
Series II		1,000.00		1,000.20		2.17		1,023.04		2.19		0.43

1	The actual ending account value is based on the actual total return of the Fund for the period July 1, 2009 through December 31, 2009, after actual expenses and will differ from the hypothetical ending account value which is based on the Fund’s expense ratio and a hypothetical annual return of 5% before expenses.
2	Expenses are equal to the Fund’s annualized expense ratio as indicated above multiplied by the average account value over the period, multiplied by 184/365 to reflect the most recent fiscal half year.

AIM V.I. Money Market Fund

Tax Information

Form 1099-DIV, Form 1042-S and other year-end tax information provide shareholders with actual calendar year amounts that should be included in their tax returns. Shareholders should consult their tax advisors.

  The following distribution information is being provided as required by the Internal Revenue Code or to meet a specific state’s requirement.

  The Fund designates the following amounts or, if subsequently determined to be different, the maximum amount allowable for its fiscal year ended December 31, 2009:

Federal and State Income Tax
Corporate Dividends Received Deduction*	0%

*  The above percentages are based on ordinary income dividends paid to shareholders during the Fund’s fiscal year.

AIM V.I. Money Market Fund

Trustees and Officers

The address of each trustee and officer of AIM Variable Insurance Funds (the “Trust”), is 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173. Each trustee oversees 105 portfolios in the AIM Funds complex. The trustees serve for the life of the Trust, subject to their earlier death, incapacitation, resignation, retirement or removal as more specifically provided in the Trust’s organizational documents. Each officer serves for a one year term or until their successors are elected and qualified. Column two below includes length of time served with predecessor entities, if any.

Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Other Directorship(s)
Position(s) Held with the Trust	or Officer	During Past 5 Years	Held by Trustee
	Since
Interested Persons
Martin L. Flanagan1 — 1960 Trustee	2007	Executive Director, Chief Executive Officer and President, Invesco Ltd. (ultimate parent of Invesco Aim and a global investment management firm); Adviser to the Board, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Trustee, The AIM Family of Funds®; Board of Governors, Investment Company Institute; and Member of Executive Board, SMU Cox School of Business	None
		Formerly: Chairman, Invesco Aim Advisors, Inc. (registered investment adviser); Director, Chairman, Chief Executive Officer and President, IVZ Inc. (holding company), INVESCO Group Services, Inc. (service provider) and Invesco North American Holdings, Inc. (holding company); Director, Chief Executive Officer and President, Invesco Holding Company Limited (parent of Invesco Aim and a global investment management firm); Director, Invesco Ltd.; Chairman and Vice Chairman, Investment Company Institute
Philip A. Taylor2 — 1954 Trustee, President and Principal Executive Officer	2006	Head of North American Retail and Senior Managing Director, Invesco Ltd.; Director, Co-Chairman, Co-President and Co- Chief Executive Officer, Invesco Advisers, inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Director, Chief Executive Officer and President, Invesco Aim Advisors, Inc. and 1371 Preferred Inc. (holding company); Director, Chairman, Chief Executive Officer and President, Invesco Aim Management Group, Inc. (financial services holding company); Director, Co-Chairman, Co-President and Co-Chief Executive Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Director and President, INVESCO Funds Group, Inc. (registered investment adviser and registered transfer agent) and AIM GP Canada Inc. (general partner for limited partnerships); Director, Invesco Aim Distributors, Inc. (registered broker dealer); Director and Chairman, Invesco Aim Investment Services, Inc. (registered transfer agent) and INVESCO Distributors, Inc. (registered broker dealer); Director, President and Chairman, INVESCO Inc. (holding company) and Invesco Canada Holdings Inc. (holding company); Chief Executive Officer, AIM Trimark Corporate Class Inc. (corporate mutual fund company) and AIM Trimark Canada Fund Inc. (corporate mutual fund company); Director and Chief Executive Officer, Invesco Trimark Ltd./Invesco Trimark Ltèe (registered investment adviser and registered transfer agent) and Invesco Trimark Dealer Inc. (registered broker dealer); Trustee, President and Principal Executive Officer, The AIM Family of Funds® (other than AIM Treasurer’s Series Trust and Short-Term Investments Trust); Trustee and Executive Vice President, The AIM Family of Funds® (AIM Treasurer’s Series Trust and Short-Term Investments Trust only); and Manager, Invesco PowerShares Capital Management LLC	None
		Formerly: Manager, Invesco PowerShares Capital Management LLC; Director, Chief Executive Officer and President, Invesco Aim Advisors, Inc.; Director, Chairman, Chief Executive Officer and President, Invesco Aim Capital Management, Inc.; President, Invesco Trimark Dealer Inc. and Invesco Trimark Ltd./Invesco Trimark Ltèe; Director and President, AIM Trimark Corporate Class Inc. and AIM Trimark Canada Fund Inc.; Senior Managing Director, Invesco Holding Company Limited; Trustee and Executive Vice President, Tax-Free Investments Trust; Director and Chairman, Fund Management Company (former registered broker dealer); President and Principal Executive Officer, The AIM Family of Funds® (AIM Treasurer’s Series Trust, Short-Term Investments Trust and Tax-Free Investments Trust only); President, AIM Trimark Global Fund Inc. and AIM Trimark Canada Fund Inc.
Independent Trustees
Bruce L. Crockett — 1944 Trustee and Chair	1993	Chairman, Crockett Technology Associates (technology consulting company)	ACE Limited (insurance company); Captaris, Inc. (unified messaging provider); and Investment Company Institute
Bob R. Baker — 1936 Trustee	2004	Retired	None
Frank S. Bayley — 1939 Trustee	2001	Retired Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios)	None
James T. Bunch — 1942 Trustee	2004	Founder, Green, Manning & Bunch Ltd., (investment banking firm)	Board of Governors, Western Golf Association/Evans
			Scholars Foundation and Executive Committee, United States Golf Association
Albert R. Dowden — 1941 Trustee	2000	Director of a number of public and private business corporations, including the Boss Group, Ltd. (private investment and management); Reich & Tang Funds (registered investment company); and Homeowners of America Holding Corporation/Homeowners of America Insurance Company (property casualty company)	Board of Nature’s Sunshine Products, Inc.
		Formerly: Director, Continental Energy Services, LLC (oil and gas pipeline service); Director, CompuDyne Corporation (provider of product and services to the public security market) and Director, Annuity and Life Re (Holdings), Ltd. (reinsurance company); Director, President and Chief Executive Officer, Volvo Group North America, Inc.; Senior Vice President, AB Volvo; Director of various public and private corporations
Jack M. Fields — 1952 Trustee	1997	Chief Executive Officer, Twenty First Century Group, Inc. (government affairs company); and Owner and Chief Executive Officer, Dos Angelos Ranch, L.P. (cattle, hunting, corporate entertainment), Discovery Global Education Fund (non-profit) and Cross Timbers Quail Research Ranch (non-profit)	Administaff
		Formerly: Chief Executive Officer, Texana Timber LP (sustainable forestry company)
Carl Frischling — 1937 Trustee	1993	Partner, law firm of Kramer Levin Naftalis and Frankel LLP	Director, Reich & Tang Funds (16 portfolios)
Prema Mathai-Davis — 1950 Trustee	1998	Retired	None
Lewis F. Pennock — 1942 Trustee	1993	Partner, law firm of Pennock & Cooper	None
Larry Soll — 1942 Trustee	2004	Retired	None
Raymond Stickel, Jr. — 1944 Trustee	2005	Retired Formerly: Director, Mainstay VP Series Funds, Inc. (25 portfolios)	None

1	Mr. Flanagan is considered an interested person of the Trust because he is an officer of the adviser to the Trust, and an officer and a director of Invesco Ltd., ultimate parent of the adviser to the Trust.
2	Mr. Taylor is considered an interested person of the Trust because he is an officer and a director of the adviser to, and a director of the principal underwriter of, the Trust.

T-1

Trustees and Officers - (continued)

Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Other Directorship(s)
Position(s) Held with the Trust	or Officer	During Past 5 Years	Held by Trustee
	Since
Other Officers
Russell C. Burk — 1958 Senior Vice President and Senior Officer	2005	Senior Vice President and Senior Officer of The AIM Family of Funds®	N/A
John M. Zerr — 1962 Senior Vice President, Chief Legal Officer and Secretary	2006	Director, Senior Vice President, Secretary and General Counsel, Invesco Aim Management Group, Inc., Senior Vice President, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Director, Senior Vice President and Secretary, Invesco Aim Distributors, Inc.; Director, Vice President and Secretary, Invesco Aim Investment Services, Inc. and INVESCO Distributors, Inc.; Director and Vice President, INVESCO Funds Group, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The AIM Family of Funds®; and Manager, Invesco PowerShares Capital Management LLC	N/A
		Formerly: Director, Senior Vice President, General Counsel and Secretary, Invesco Aim Advisors, Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco Aim Capital Management, Inc.; Chief Operating Officer and General Counsel, Liberty Ridge Capital, Inc. (an investment adviser); Vice President and Secretary, PBHG Funds (an investment company) and PBHG Insurance Series Fund (an investment company); Chief Operating Officer, General Counsel and Secretary, Old Mutual Investment Partners (a broker-dealer); General Counsel and Secretary, Old Mutual Fund Services (an administrator) and Old Mutual Shareholder Services (a shareholder servicing center); Executive Vice President, General Counsel and Secretary, Old Mutual Capital, Inc. (an investment adviser); and Vice President and Secretary, Old Mutual Advisors Funds (an investment company)
Lisa O. Brinkley — 1959 Vice President	2004	Global Compliance Director, Invesco Ltd.; Chief Compliance Officer, Invesco Aim Distributors, Inc. and Invesco Aim Investment Services, Inc.; and Vice President, The AIM Family of Funds® Formerly: Senior Vice President, Invesco Aim Management Group, Inc.; Senior Vice President and Chief Compliance Officer, Invesco Aim Advisors, Inc. and The AIM Family of Funds®; Vice President and Chief Compliance Officer, Invesco Aim Capital Management, Inc. and Invesco Aim Distributors, Inc.; Vice President, Invesco Aim Investment Services, Inc. and Fund Management Company	N/A
Kevin M. Carome — 1956 Vice President	2003	General Counsel, Secretary and Senior Managing Director, Invesco Ltd.; Director, Invesco Holding Company Limited and INVESCO Funds Group, Inc.; Director and Executive Vice President, IVZ, Inc., Invesco Group Services, Inc., Invesco North American Holdings, Inc. and Invesco Investments (Bermuda) Ltd.; Director and Secretary, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); and Vice President, The AIM Family of Funds®	N/A
		Formerly: Senior Managing Director and Secretary, Invesco North American Holdings, Inc.; Vice President and Secretary, IVZ, Inc. and Invesco Group Services, Inc.; Senior Managing Director and Secretary, Invesco Holding Company Limited; Director, Senior Vice President, Secretary and General Counsel, Invesco Aim Management Group, Inc. and Invesco Aim Advisors, Inc.; Senior Vice President, Invesco Aim Distributors, Inc.; Director, General Counsel and Vice President, Fund Management Company; Vice President, Invesco Aim Capital Management, Inc. and Invesco Aim Investment Services, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The AIM Family of Funds®; Director and Vice President, INVESCO Distributors, Inc.; and Chief Executive Officer and President, INVESCO Funds Group, Inc.
Sheri Morris — 1964 Vice President, Treasurer and Principal Financial Officer	1999	Vice President, Treasurer and Principal Financial Officer, The AIM Family of Funds®; and Vice President, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.) Formerly: Vice President, Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.; Assistant Vice President and Assistant Treasurer, The AIM Family of Funds® and Assistant Vice President, Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A
Karen Dunn Kelley — 1960 Vice President	1993	Head of Invesco’s World Wide Fixed Income and Cash Management Group; Senior Vice President, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Executive Vice President, Invesco Aim Distributors, Inc.; Senior Vice President, Invesco Aim Management Group, Inc.; and Director, Invesco Mortgage Capital Inc.; Vice President, The AIM Family of Funds® (other than AIM Treasurer’s Series Trust and Short-Term Investments Trust); and President and Principal Executive Officer, The AIM Family of Funds® (AIM Treasurer’s Series Trust and Short-Term Investments Trust only) Formerly: Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Director of Cash Management and Senior Vice President, Invesco Aim Advisors, Inc. and Invesco Aim Capital Management, Inc.; President and Principal Executive Officer, Tax-Free Investments Trust; Director and President, Fund Management Company; Chief Cash Management Officer, Director of Cash Management, Senior Vice President, and Managing Director, Invesco Aim Capital Management, Inc.; Director of Cash Management, Senior Vice President, and Vice President, Invesco Aim Advisors, Inc. and The AIM Family of Funds® (AIM Treasurer’s Series Trust, Short-Term Investments Trust and Tax-Free Investments Trust only)	N/A
Lance A. Rejsek — 1967 Anti-Money Laundering Compliance Officer	2005	Anti-Money Laundering Compliance Officer, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Invesco Aim Distributors, Inc., Invesco Aim Investment Services, Inc., and The AIM Family of Funds®	N/A
		Formerly: Anti-Money Laundering Compliance Officer, Fund Management Company, Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.
Todd L. Spillane — 1958 Chief Compliance Officer	2006	Senior Vice President, Invesco Aim Management Group, Inc.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Chief Compliance Officer, The AIM Family of Funds®, INVESCO Private Capital Investments, Inc. (holding company), Invesco Private Capital, Inc. (registered investment adviser) and Invesco Senior Secured Management, Inc. (registered investment adviser); Vice President, Invesco Aim Distributors, Inc. and Invesco Aim Investment Services, Inc.	N/A
		Formerly: Senior Vice President and Chief Compliance Officer, Invesco Aim Advisors, Inc. and Invesco Aim Capital Management, Inc.; Chief Compliance Officer, Invesco Global Asset Management (N.A.), Inc.; Vice President, Invesco Aim Capital Management, Inc. and Fund Management Company

The Statement of Additional Information of the Trust includes additional information about the Fund’s Trustees and is available upon request, without charge, by calling 1.800.959.4246. Please refer to the Fund’s prospectus for information on the Fund’s sub-advisers.

Office of the Fund	Investment Adviser	Distributor	Auditors
11 Greenway Plaza, Suite 100	Invesco Advisers, Inc.	Invesco Aim Distributors, Inc.	PricewaterhouseCoopers LLP
Houston, TX 77046-1173	1555 Peachtree Street, N.E.	11 Greenway Plaza, Suite 100	1201 Louisiana Street, Suite 2900
	Atlanta, GA 30309	Houston, TX 77046-1173	Houston, TX 77002-5678
Counsel to the Fund	Counsel to the	Transfer Agent	Custodian
Stradley Ronon Stevens & Young, LLP	Independent Trustees	Invesco Aim Investment Services, Inc.	State Street Bank and Trust Company
2600 One Commerce Square	Kramer, Levin, Naftalis & Frankel LLP	P.O. Box 4739	225 Franklin
Philadelphia, PA 19103	1177 Avenue of the Americas	Houston, TX 77210-4739	Boston, MA 02110-2801
	New York, NY 10036-2714

T-2

AIM V.I. PowerShares ETF Allocation Fund

Annual Report to Shareholders n December 31, 2009

The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter-ends. For the second and fourth quarters, the lists appear in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The Fund’s Form N-Q filings are available on the SEC website, sec.gov. Copies of the Fund’s Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers for the Fund are 811-07452 and 033-57340. The Fund’s most recent portfolio holdings, as filed on Form N-Q, have also been made available to insurance companies issuing variable annuity contracts and variable life insurance policies (“variable products”) that invest in the Fund.

A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, from our Client Services department at 800 410 4246 or on the Invesco Aim website, invescoaim.com. On the home page, scroll down and click on Proxy Policy. The information is also available on the SEC website, sec.gov.

Information regarding how the Fund voted proxies related to its portfolio securities during the 12 months ended June 30, 2009, is available at our website, invescoaim.com. Click the About Us tab at the top of the home page; click Legal Information; and then click Proxy Voting Search. The information is also available on the SEC website, sec.gov.

Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Aim Distributors, Inc. is the U.S. distributor for Invesco Ltd.’s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd.

This report must be accompanied or preceded by a currently effective Fund prospectus and variable product prospectus, which contain more complete information, including sales charges and expenses. Investors should read each carefully before investing.

Invesco Aim Distributors, Inc.

NOT FDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEE

Management’s Discussion of Fund Performance

Performance summary

For the year ended December 31, 2009, Series I shares of AIM V.I. PowerShares ETF Allocation Fund returned 25.40%, excluding variable product issuer charges, and underperformed its broad market benchmark, the MSCI World Index, but outperformed its style-specific index, the Custom V.I. PowerShares ETF Allocation Fund Index. The Custom V.I. PowerShares ETF Allocation Fund Index approximates the broad asset allocation of the Fund over time. Outperformance was primarily driven by the Fund’s allocation to emerging market debt, high yield corporate debt as well as small/mid-cap stocks and emerging market equities.

     Your Fund’s long-term performance appears later in this report.

Fund vs. Indexes

Total returns, 12/31/08 to 12/31/09, excluding variable product issuer charges.

If variable product issuer charges were included, returns would be lower.

Series I Shares	25.40	%
Series II Shares	25.15
MSCI World Index6 (Broad Market Index)	29.99
Custom V.I. PowerShares ETF Allocation Fund Indexn (Style-Specific Index)	20.33
Lipper VUF Global Core Funds Index6 (Peer Group Index)	33.54

⁶Lipper Inc.; nInvesco, Lipper Inc.

How we invest

Invesco Global Asset Allocation’s (IGAA) investment process is a quantitative, actively managed three-step investment strategy designed to generate a unique source of excess returns from a macro based, multi-asset investment discipline.

Step One — Fundamental Research

Fundamental research is used to identify the key drivers of relative performance for asset class, country and other investment decision models. This research includes the following:

n	An analysis of markets to determine the distinctive characteristics of each market relative to its comparison universe.
n	The generation of hypotheses about how various economic events will interact with these characteristics and affect relative performance.
n	Confirmation or revision of hypothesis through empirical research.

Step Two — Quantitative Modeling

Fundamental research from Step One is used to create quantitative models focusing on valuation and dynamics.

n	To address valuation, IGAA determines if competing investment alternatives are cheap or expensive relative to their underlying fundamentals. Valuation focuses on the longer term, secular influences on each asset and suggests that there is a mean reverting, long-term or equilibrium relationship between prices and fundamentals.
n	Shorter term factors, which are largely proxies for the economic environment and investor positioning, reconcile the short-run behavior of asset prices with their long-run behavior and recognizes that these misvaluations may not correct instantaneously.

The output of the modeling is expressed in the form of probabilities that one asset will outperform another, resulting in a quantitative expression of IGAA’s fundamental investment process in a mathematical-based approach.

Step Three — Portfolio Strategy

IGAA directly maps the probabilities to express the relative attractiveness of any investment decision within the Fund’s specified allocation ranges. Ranges around target allocations for each decision are determined through IGAA’s proprietary allocation budgeting process that is based on the number of available decisions, the amount of expected aggregate portfolio outperformance and the risk characteristics of each available decision. Generally speaking, riskier asset decisions will have smaller ranges, while less risky, low correlation asset decisions will tend to have larger ranges.

Market conditions and your Fund

While global economic growth remained weak in the aftermath of the credit crisis and future growth looked uncertain, investors’ improving risk appetite, combined with significant global fiscal and monetary stimulus, resulted in a significant equity market rally beginning in March 2009 and continuing throughout the remainder of the year. The Fund’s absolute and relative performance versus its custom index benefited primarily from strong performance within several of the PowerShares ETF portfolios, as well as the tactical asset allocation component, which also aided relative returns.

     Equities, as represented by the MSCI World Index, returned 29.99% for the year ended December 31, 2009.¹ From a historical perspective, this was consistent with the type of performance equity markets have experienced coming out of previous recessions. Late in the reporting period, our research indicated that more moderate gains for most equity markets were likely through 2010, unless economic growth and corporate earnings manage to surprise on the upside. As a result, we positioned the portfolio accordingly.

     Japanese equities lagged other developed markets during the period, mainly due to the recent strength of the yen, which jeopardized the earnings outlook for many of the blue chip companies with a global franchise in Japan. Our equity exposure was the most significant contributor to absolute performance during the reporting period.

     Low short-term interest rates made most assets more attractive than cash. Long–term U.S. Treasury security yields remain low by historical standards, and the cyclical environment makes it unlikely that this will change dramatically in the near future. Inflation declined over the year, and we believe it will remain subdued given anemic global economic growth. Additionally, based on our research, we do not expect yields to begin rising materially until monetary policy becomes much more restrictive, and we have positioned the portfolio given these expectations. Our bond positions were generally positive contributors to results during the reporting period, driven by our exposure to emerging market and corporate high yield fixed-income securities.

Portfolio Composition

	Target			% of Total Net Assets
Asset Class	Allocation Range			As of 12/31/09
Asia ex-Japan Equity		0 - 14	%		7.48	%
Domestic Equity Large Cap		0 - 20			11.17
Domestic Equity Small-Mid Cap		0 - 14			7.31
Emerging Markets Equity		0 - 12			6.80
Emerging Markets Fixed-Income		0 - 20			9.62
European Equity		0 - 16			7.54
Foreign Equity Small-Mid Cap		0 - 16			8.56
High Yield Fixed-Income		0 - 12			6.82
Investment Grade Fixed-Income		15 - 45			22.08
Japanese Equity		0 - 16			7.69
Money Market Funds Plus Other Assets Less Liabilities		N/A			4.93

AIM V.I. PowerShares ETF Allocation Fund

     After the spring of 2009, our active positioning strategy favored equities, a stance that remained in place largely for the balance of the reporting period. While the tactical asset allocation element only had a modest impact on performance, the true benefits of this tactical component to the strategy typically occurs when there is a significant shift in the direction of returns in the markets — a development that did not occur during the second half of the calendar year.

     We thank you for your investment in AIM V.I. PowerShares ETF Allocation Fund.

1 Lipper Inc.

The views and opinions expressed in management’s discussion of Fund performance are those of Invesco Advisers, Inc. These views and opinions are subject to change at any time based on factors such as market and economic conditions. These views and opinions may not be relied upon as investment advice or recommendations, or as 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 Invesco Advisers, Inc. 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.

See important Fund and index disclosures later in this report.

Mark Ahnrud

Chartered Financial Analyst, portfolio manager, is manager of AIM V.I. PowerShares ETF Allocation Fund. Mr. Ahnrud joined Invesco in 2000. His responsibilities include fundamental research, quantitative modeling and portfolio investment decisions for asset classes —fixed-income market allocations. Mr. Ahnrud began his investment career in 1985. He earned a B.S. in finance and investments from Babson College and an M.B.A. degree from the Fuqua School of Business at Duke University.

Chris Devine

Chartered Financial Analyst, portfolio manager, is manager of AIM V.I. PowerShares ETF Allocation Fund. Mr. Devine joined Invesco in 1998. He is responsible for portfolio construction, risk management and trading. He began his investment management career in 1996. Mr. Devine earned a B.A. in economics from Wake Forest University and an M.B.A. from the University of Georgia.

Scott Hixon

Chartered Financial Analyst, portfolio manager, is manager of AIM V.I. PowerShares ETF Allocation Fund. Mr. Hixon joined Invesco in 1994. He is responsible for the fundamental research, quantitative modeling and portfolio investment decisions for asset classes and currencies. Mr. Hixon began his investment management career in 1992. He earned a B.B.A. in finance, graduating magna cum laude, from Georgia Southern University. He earned an M.B.A. in Finance from Georgia State University.

Christian Ulrich

Chartered Financial Analyst, portfolio manager, is manager of AIM V.I. PowerShares ETF Allocation Fund. He joined Invesco in 2000. Mr. Ulrich earned the equivalent of a B.B.A. from the KV Zurich Business School in Zurich, Switzerland.

Scott Wolle

Chartered Financial Analyst, portfolio manager, is manager of AIM V.I. PowerShares ETF Allocation Fund. Mr. Wolle joined Invesco in 1999. He is responsible for the fundamental research, quantitative modeling and portfolio investment decisions for country allocations and commodities. Mr. Wolle began his investment management career in 1991. He earned a B.S. in finance from Virginia Polytechnic Institute and State University, graduating magna cum laude. He earned an M.B.A. from the Fuqua School of Business at Duke University where he earned the distinction of Fuqua Scholar.

Assisted by the Global Asset
Allocation Team

Your Fund’s Long-Term Performance

Average Annual Total Returns
As of 12/31/09

Series I Shares
Inception (10/24/08)	33.93	%
1 Year	25.40
Series II Shares
Inception (10/24/08)	33.49	%
1 Year	25.15

The performance of the Fund’s Series I and Series II share classes will differ primarily due to different class expenses.

     The performance data quoted represent past performance and cannot guarantee comparable future results; current performance may be lower or higher. Please contact your variable product issuer or financial adviser for the most recent month-end variable product performance. Performance figures reflect Fund expenses, reinvested distributions and changes in net asset value. Investment return and principal value will fluctuate so that you may have a gain or loss when you sell shares.

     The net annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 0.74% and 0.99%, respectively.¹ The total annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 2.12% and 2.37%, respectively. The expense ratios presented above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

     AIM V.I. PowerShares ETF Allocation Fund, a series portfolio of AIM Variable Insurance Funds, is currently offered through insurance companies issuing variable products. You cannot purchase shares of the Fund directly. Performance figures given represent

continued on next page

AIM V.I. PowerShares ETF Allocation Fund

Your Fund’s Long-Term Performance (Continued)

the Fund and are not intended to reflect actual variable product values. They do not reflect sales charges, expenses and fees assessed in connection with a variable product. Sales charges, expenses and fees, which are determined by the variable product issuers, will vary and will lower the total return.

     The most recent month-end performance data at the Fund level, excluding variable product charges, is available on the Invesco Aim automated information line, 866 702 4402. As mentioned above, for the most recent month-end performance including variable product charges, please contact your variable product issuer or financial adviser.

     Had the adviser not waived fees and/ or reimbursed expenses, performance would have been lower.

1 Total annual operating expenses less any contractual fee waivers and/or expense reimbursements by the adviser in effect through at least April 30, 2011. See current prospectus for more information.

AIM V.I. PowerShares ETF Allocation Fund’s investment objective is to provide total return consistent with a moderate level of risk relative to the broad stock market.

n	Unless otherwise stated, information presented in this report is as of December 31, 2009, and is based on total net assets.
n	Unless otherwise noted, all data provided by Invesco.

Principal risks of investing in the Fund

Credit risk is the risk of loss on an investment due to the deterioration of an issuer’s financial health. Such a deterioration of financial health may result in a reduction of the credit rating of the issuer’s securities and may lead to the issuer’s inability to honor its contractual obligations, including making timely payment of interest and principal.

     The Fund may use enhanced investment techniques such as derivatives. The principal risk of derivatives is that the fluctuations in their values may not correlate perfectly with the overall securities markets. Derivatives are subject to counterparty risk — the risk that the other party will not complete the transaction with the Fund.

     Investing in developing countries can add additional risk, such as high rates of inflation or sharply devalued currencies against the U.S. dollar. Transaction costs are often higher, and there may be delays in settlement procedures.

     Government obligors in emerging market countries are among the world’s largest debtors to commercial banks, other governments, international financial organizations and other financial institutions. Historically, certain issuers of the government debt securities have experienced substantial difficulties in meeting their external debt obligations, resulting in defaults on certain obligations and the restructuring of certain indebtedness.

     Prices of equity securities change in response to many factors, including the historical and prospective earnings of the issuer, the value of its assets, general economic conditions, interest rates, investor perceptions and market liquidity.

     ETF shares may trade above or below their net asset value. An active trading market for PowerShares’ ETFs may not develop or be maintained. Trading of a PowerShares ETF may be halted if the listing exchange’s officials deem such action appropriate. PowerShares’ ETFs are not actively managed and may not fulfill their objective of tracking the performance of a specified index. PowerShares’ ETFs would not necessarily sell a security because the issuer of the security was in financial trouble unless the security is removed from the index that the ETF seeks to track. The value of an investment in a PowerShares ETF will decline, more or less, in correlation with any decline in the value of the index it seeks to track. In addition, certain PowerShares ETFs may be composed of a significant percentage of issuers in a single industry or sector of the economy and may present more risk than if they were broadly diversified.

     Foreign securities have additional risks, including exchange rate changes, political and economic upheaval, relative lack of information, relatively low market liquidity, and the potential lack of strict financial and accounting controls and standards.

     The Fund pursues its investment objectives by investing its assets primarily in underlying PowerShares ETFs rather than investing directly in stocks, bonds, cash or other investments. The Fund’s investment performance depends on the investment performance of the underlying PowerShares ETFs and other underlying funds and securities in which it invests. An investment in the Fund, because it is a fund of funds, is subject to the risks associated with investments in the underlying funds in which the fund invests. The Fund will indirectly pay a proportional share of the asset-based fees of the underlying PowerShares ETFs in which the Fund invests. There is risk that the adviser’s evaluations and assumptions regarding the Fund’s asset classes may be out of favor and under perform other segments; or that the Fund will vary from the target asset class weighting due to factors such as market fluctuations. There can be no assurance that the underlying PowerShares ETFs and any other underlying funds will achieve their investment objectives, and the performance of the underlying PowerShares ETFs and any other underlying funds may be lower than that of the asset classes they represent. The underlying PowerShares ETFs and any other underlying funds may change their investment objectives or policies without the approval of the Fund. If that were to occur, the Fund might be forced to withdraw its investments from an underlying PowerShares ETF and/or any other underlying funds at an unfavorable time. The adviser has the ability to select and substitute the underlying funds in which the Fund invests and may be subject to potential conflicts of interest in selecting underlying PowerShares ETFs and other affiliated underlying funds

AIM V.I. PowerShares ETF Allocation Fund

because the adviser and/or PowerShares may receive higher fees from certain underlying PowerShares ETFs and other affiliated underlying funds than others. However, as a fiduciary of the Fund, the advisor is required to act in the Fund’s best interest when selecting the underlying funds.

     High-coupon, U.S. government agency mortgage-backed securities provide a higher coupon than current prevailing market interest rates, and the Fund may purchase such securities at a premium. If these securities experience a faster-than-expected principal prepayment rate, both the market value and income from such securities will decrease.

     Lower rated securities may be more susceptible to real or perceived adverse economic and competitive industry conditions, and the secondary markets in which lower rated securities are traded may be less liquid than higher grade securities. The loans in which the Fund may invest are typically noninvestment-grade and involve a greater risk of default on interest and principal payments and of price changes due to the changes in the credit quality of the issuer.

     Interest rate risk refers to the risk that bond prices generally fall as interest rates rise and vice versa.

     Leveraging entails risks such as magnifying changes in the value of the portfolio’s securities.

     A majority of the Fund’s assets are likely to be invested in loans and securities that are less liquid than those rated on national exchanges.

     There is no guarantee that the investment techniques and risk analysis used by the Fund’s portfolio managers will produce the desired results.

     Stocks fall into three broad market capitalization categories — large, medium, and small. Investing primarily in one category carries the risk that, due to current market conditions, that category may be out of favor with investors. Small and mid-sized companies may tend to be more vulnerable to adverse developments and more volatile than larger companies. Investments in small and mid-sized companies may involve special risks, including those associated with dependence on a small management group, little of no operating history, little or no track record of success, and limited product lines, market and financial resources. Also, there may be less publicly available information about the issuers of the securities or less market interest in such securities than in the case of larger companies, each of which can cause significant price volatility. The securities of small and mid-sized companies may be illiquid, restricted as to resale, or may trade less frequently and in smaller volume than more widely held securities, which may make it difficult for fund to establish or close out a position in these securities at prevailing market prices.

     The prices of securities held by the Fund may decline in response to market risks.

     Nondiversification increases the risk that the value of the Fund’s shares may vary more widely, and the Fund may be subject to greater investment and credit risk than if it invested more broadly.

     The ability of an issuer of a floating rate loan or debt security to repay principal prior to maturity can limit the potential for gains by the Fund.

     Reinvestment risk is the risk that a bond’s cash flows will be reinvested at an interest rate below that of the original bond.

     Sovereign debt securities are subject to the additional risk that — under some political, diplomatic, social or economic circumstances — some developing countries that issue lower quality debt securities may be unable or unwilling to make principal or interest payments as they come due.

     The Fund may invest in obligations issued by agencies and instrumentalities of the U.S. government that may vary in the level of support they receive from the U.S. government. The U.S. government may choose not to provide financial support to U.S.-government-sponsored agencies or instrumentalities if it is not legally obligated to do so. In this case, if the issuer defaulted, the fund holding securities of such an issuer might not be able to recover its investment from the U.S. government.

About indexes used in this report The MSCI World Index^SM is an unmanaged index considered representative of stocks of developed countries.

     The Custom V.I. PowerShares ETF Allocation Fund Index, created by Invesco Aim to serve as a benchmark for AIM V.I. PowerShares ETF Allocation Fund, is composed of the following indexes: MSCI World (54%) and Barclays Capital U.S. Universal (46%).

     The Lipper VUF Global Core Funds Index is an unmanaged index considered representative of global core variable insurance underlying funds tracked by Lipper.

     The Fund is not managed to track the performance of any particular index, including the indexes defined here, and consequently, the performance of the Fund may deviate significantly from the performance of the indexes.

     A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group reflects fund expenses; performance of a market index does not.

Other information

The Chartered Financial Analyst® (CFA®) designation is globally recognized and attests to a charterholder’s success in a rigorous and comprehensive study program in the field of investment management and research analysis.

     The returns shown in management’s discussion of Fund performance are based on net asset values calculated for shareholder transactions. Generally accepted accounting principles require adjustments to be made to the net assets of the Fund at period end for financial reporting purposes, and as such, the net asset values for shareholder transactions and the returns based on those net asset values may differ from the net asset values and returns reported in the Financial Highlights. Additionally, the returns and net asset values shown throughout this report are at the Fund level only and do not include variable product issuer charges. If such charges were included, the total returns would be lower.

Schedule of Investments

December 31, 2009

Schedule of Investments in Affiliated Issuers–102.43%^(a)

											Change in
											Unrealized
	% of Net			Value		Purchases		Proceeds			Appreciation			Realized			Dividend		Shares		Value
	Assets			12/31/08		at Cost		from Sales			(Depreciation)			Gain (Loss)			Income		12/31/09		12/31/09
Domestic Equity ETFs–18.93%
PowerShares FTSE RAFI US 1000 Portfolio		11.44	%	$	47,754	$	5,125,936	$	(495,332	)	$	705,329		$	(20,764	)	$	44,201		112,975	$	5,362,923
PowerShares FTSE RAFI US 1500 Small Mid Portfolio		7.49	%		35,505		3,160,055		(343,278	)		672,882			(17,331	)		16,560		69,270		3,507,833
Total Domestic Equity ETFs					83,259		8,285,991		(838,610	)		1,378,211			(38,095	)		60,761		182,245		8,870,756
Fixed-Income ETFs–39.45%
PowerShares 1-30 Laddered Treasury Portfolio		22.61	%		170,466		12,034,231		(1,182,746	)		(353,971	)		(63,281	)		120,972		398,895		10,598,640
PowerShares Emerging Markets Sovereign Debt Portfolio		9.85	%		45,024		4,923,746		(571,883	)		237,284			(15,965	)		120,966		180,850		4,617,101
PowerShares High Yield Corporate Bond Portfolio		6.99	%		30,217		3,179,432		(115,578	)		183,176			(3,389	)		106,514		181,780		3,273,858
Total Fixed-Income ETFs					245,707		20,137,409		(1,870,207	)		66,489			(82,635	)		348,452		761,525		18,489,599
Foreign Equity ETFs–38.99%
iShares MSCI Japan Index Fund(b)		7.88	%		24,307		3,759,583		(121,319	)		31,849			(3,934	)		35,406		378,900		3,690,486
iShares S&P/TOPIX 150 Index Fund(b)		—	%		15,725		1,169,868		(1,251,271	)		(1,392	)		67,070			3,237		—		—
PowerShares FTSE RAFI Asia Pacific ex-Japan Portfolio		7.66	%		35,015		3,263,873		(307,201	)		601,955			(2,847	)		124,110		76,710		3,590,795
PowerShares FTSE RAFI Developed Markets ex-US Small- Mid Portfolio		8.77	%		39,480		3,965,490		(328,184	)		453,755			(22,252	)		107,514		195,260		4,108,289
PowerShares FTSE RAFI Emerging Markets Portfolio		6.96	%		30,802		3,003,769		(359,695	)		586,870			958			20,469		141,795		3,262,704
PowerShares FTSE RAFI Europe Portfolio		7.72	%		39,434		3,523,899		(424,606	)		505,524			(26,129	)		34,459		100,420		3,618,122
Total Foreign Equity ETFs					184,763		18,686,482		(2,792,276	)		2,178,561			12,866			325,195		893,085		18,270,396
Money Market Funds–5.06%
Liquid Assets Portfolio–Institutional Class		2.53	%		16,377		17,682,481		(16,515,365	)		—			—			1,432		1,183,493		1,183,493
Premier Portfolio–Institutional Class		2.53	%		16,377		17,682,481		(16,515,365	)		—			—			1,045		1,183,493		1,183,493
Total Money Market Funds					32,754		35,364,962		(33,030,730	)		—			—			2,477		2,366,986		2,366,986
TOTAL INVESTMENTS IN AFFILIATED ISSUERS (Cost $44,331,390)		102.43	%	$	546,483	$	82,474,844	$	(38,531,823	)	$	3,623,261	(c)	$	(107,864	)	$	736,885				47,997,737
OTHER ASSETS LESS LIABILITIES		(2.43	)%																			(1,137,142	)
NET ASSETS		100.00	%																		$	46,860,595

Investment Abbreviations:

ETF – Exchange-Traded Fund

Notes to Schedule of Investments:

(a)	Unless otherwise indicated, each exchange-traded fund or mutual fund and the Fund are affiliated by either having the same investment adviser or an investment adviser under common control with the Fund’s investment adviser.
(b)	Non-affiliate of the Fund or its investment adviser.
(c)	Includes $7,164 of return of capital from PowerShares 1-30 Laddered Treasury Portfolio and PowerShares Emerging Markets Sovereign Debt Portfolio.

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

AIM V.I. PowerShares ETF Allocation Fund

Statement of Assets and Liabilities

December 31, 2009

Assets:
Investments — non affiliates at value (Cost $3,656,118)	$	3,690,486
Investments — affiliates, at value (Cost $40,675,272)		44,307,251
Total investments, at value (Cost $44,331,390)		47,997,737
Cash		682,362
Receivables for:
Fund shares sold		20,395
Dividends from affiliates		138
Investment for trustee deferred compensation		2,402
Total assets		48,703,034
Liabilities:
Payables for:
Investments purchased — non affiliates		133,508
Investments purchased — affiliates		1,620,777
Fund shares reacquired		37
Accrued fees to affiliates		44,203
Accrued other operating expenses		41,512
Trustee deferred compensation		2,402
Total liabilities		1,842,439
Net assets applicable to shares outstanding	$	46,860,595
Net assets consist of:
Shares of beneficial interest	$	43,175,100
Undistributed net investment income		211,260
Undistributed net realized gain (loss)		(192,112	)
Unrealized appreciation		3,666,347
	$	46,860,595
Net Assets:
Series I	$	898,614
Series II	$	45,961,981
Shares outstanding, $0.001 par value per share, unlimited number of shares authorized:
Series I		65,624
Series II		3,366,270
Series I:
Net asset value per share	$	13.69
Series II:
Net asset value per share	$	13.65

Statement of Operations

For the year ended December 31, 2009

Investment income:
Dividends — non affiliates	$	31,484
Dividends — affiliates		705,401
Total investment income		736,885
Expenses:
Advisory fees		116,197
Administrative services fees		92,158
Custodian fees		4,316
Distribution fees — Series II		42,377
Transfer agent fees		1,848
Trustees’ and officers’ fees and benefits		20,103
Professional services fees		50,736
Other		22,538
Total expenses		350,273
Less: Fees waived and expenses reimbursed		(270,282	)
Net expenses		79,991
Net investment income		656,894
Realized and unrealized gain (loss) from:
Net realized gain (loss) from:
Investment securities — non affiliates		63,136
Investment securities — affiliates		(171,000	)
		(107,864	)
Change in net unrealized appreciation of:
Investment securities — non affiliates		30,457
Investment securities — affiliates		3,592,804
		3,623,261
Net realized and unrealized gain		3,515,397
Net increase in net assets resulting from operations	$	4,172,291

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

AIM V.I. PowerShares ETF Allocation Fund

Statement of Changes in Net Assets

For the year ended December 31, 2009 and the period October 24, 2008 (commencement date) through December 31, 2008

	2009			2008
Operations:
Net investment income	$	656,894		$	3,633
Net realized gain (loss)		(107,864	)		497
Change in net unrealized appreciation		3,623,261			43,086
Net increase in net assets resulting from operations		4,172,291			47,216
Distributions to shareholders from net investment income:
Series I		(10,312	)		(2,420	)
Series II		(452,703	)		(5,746	)
Total distributions from net investment income		(463,015	)		(8,166	)
Distributions to shareholders from net realized gains:
Series I		(1,782	)		—
Series II		(84,532	)		—
Total distributions from net realized gains		(86,314	)		—
Share transactions-net:
Series I		690,765			127,430
Series II		42,009,701			370,687
Net increase in net assets resulting from share transactions		42,700,466			498,117
Net increase in net assets		46,323,428			537,167
Net assets:
Beginning of year		537,167			—
End of year (includes undistributed net investment income of $211,260 and $3,753, respectively)	$	46,860,595		$	537,167

Notes to Financial Statements

December 31, 2009

NOTE 1—Significant Accounting Policies

AIM V.I. PowerShares ETF Allocation Fund (the “Fund”) is a series portfolio of AIM Variable Insurance Funds (the “Trust”). The Trust is a Delaware statutory trust registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end series management investment company consisting of twenty-one separate portfolios, (each constituting a “Fund”). The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Matters affecting each Fund or class will be voted on exclusively by the shareholders of such Fund or class. Current Securities and Exchange Commission (“SEC”) guidance, however, requires participating insurance companies offering separate accounts to vote shares proportionally in accordance with the instructions of the contract owners whose investments are funded by shares of each Fund or class.

  The Fund’s investment objective is to provide total return consistent with a moderate level of risk relative to the broad stock market. The Fund primarily invests in exchange-traded funds (“underlying funds”) advised by Invesco PowerShares Capital Management LLC (“Invesco PowerShares”). The Fund may also invest in affiliated mutual funds advised by Invesco Aim Advisors (“Invesco Aim”); in unaffiliated mutual funds and exchange-traded funds and in other

  securities. Invesco Aim and Invesco PowerShares (collectively the “Advisors”) are affiliates of each other as they are indirect wholly owned subsidiaries of Invesco Ltd. (“Invesco”). Invesco Aim may change the Fund’s asset class allocations, the underlying funds or the target weightings in the underlying funds without shareholder approval. The underlying funds may engage in a number of investment techniques and practices, which involve certain risks. Each underlying fund’s accounting policies are outlined in the underlying fund’s financial statements and the affiliated underlying funds are available upon request.

  The Fund currently offers two classes of shares, Series I and Series II, both of which are offered to insurance company separate accounts funding variable annuity contracts and variable life insurance policies (“variable products”).

A.

Security Valuations — Securities, including restricted securities, are valued according to the following policy.

Debt obligations (including convertible bonds) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution-size trading in similar groups of securities, developments related to specific securities, dividend rate, yield, quality, type of issue, coupon rate, maturity, individual trading characteristics and other market data. Short-term obligations, including commercial paper, having 60 days or less to maturity

AIM V.I. PowerShares ETF Allocation Fund

	are recorded at amortized cost which approximates value. Debt securities are subject to interest rate and credit risks. In addition, all debt securities involve some risk of default with respect to interest and/or principal payments.
	A security listed or traded on an exchange (except convertible bonds) is valued at its last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales or official closing price on a particular day, the security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based on prices furnished by independent pricing services or market makers. When such securities are valued by an independent pricing service they may be considered fair valued. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean between the last bid and ask prices from the exchange on which they are principally traded. Options not listed on an exchange are valued by an independent source at the mean between the last bid and ask prices. For purposes of determining net asset value per share, futures and option contracts generally are valued 15 minutes after the close of the customary trading session of the New York Stock Exchange (“NYSE”).
	Investments in open-end and closed-end registered investment companies that do not trade on an exchange are valued at the end of day net asset value per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded.
	Swap agreements are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service are valued based on a model which may include end of day net present values, spreads, ratings, industry, and company performance.
	Foreign securities (including foreign exchange contracts) are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the NYSE. If market quotations are available and reliable for foreign exchange traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that are significant and make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economical upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
	Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities and Corporate Loans. The mean between the last bid and asked prices may be used to value debt obligations other than Corporate Loans.
	Securities for which market quotations are not readily available or are unreliable are valued at fair value as determined in good faith by or under the supervision of the Trust’s officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a security’s fair value.
	Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
B.	Securities Transactions and Investment Income — Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Distributions from income from underlying funds, if any, are recorded as dividend income on ex-dividend date. Distributions from net realized capital gains from underlying funds, if any, are recorded as realized gains on the ex-dividend date. Interest income is recorded on the accrual basis from settlement date.
	The Fund may periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain/loss for investments no longer held and as unrealized gain/loss for investments still held.
	Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the realized and unrealized net gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the Fund’s net asset value and, accordingly, they reduce the Fund’s total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in the Statement of Operations and Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the adviser.
	The Fund allocates income and realized and unrealized capital gains and losses to a class based on the relative net assets of each class.
C.	Distributions — Distributions from income and net realized capital gain, if any, are generally paid to separate accounts of participating insurance companies annually and recorded on ex-dividend date.
D.	Federal Income Taxes — The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code necessary to qualify as a regulated investment company and to distribute substantially all of the Fund’s taxable earnings to shareholders. As such, the Fund will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements.

AIM V.I. PowerShares ETF Allocation Fund

	The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.
E.	Expenses — Fees provided for under the Rule 12b-1 plan of a particular class of the Fund and which are directly attributable to that class are charged to the operations of such class. All other expenses are allocated among the classes based on relative net assets.
F.	Accounting Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print, which is generally 45 days from the period-end date.
G.	Indemnifications — Under the Trust’s organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Fund’s servicing agreements, that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote.

NOTE 2—Advisory Fees and Other Fees Paid to Affiliates

The Trust has entered into a master investment advisory agreement with Invesco Advisers, Inc. (the “Adviser” or “Invesco”). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Adviser based on the annual rate of the Fund’s average daily net assets as follows:

Average Net Assets	Rate
First $250 million		0	.67%
Next $250 million		0	.655%
Next $500 million		0	.64%
Next $1.5 billion		0	.625%
Next $2.5 billion		0	.61%
Next $2.5 billion		0	.595%
Next $2.5 billion		0	.58%
Over $10 billion		0	.565%

  Under the terms of a master sub-advisory agreement approved by shareholders of the Funds between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Trimark Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Funds, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide discretionary investment management services to each Fund based on the percentage of assets allocated to such Sub-Adviser(s).

  On December 31, 2009, Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc., Invesco Private Asset Management, Inc. and Invesco Global Asset Management (N.A.), Inc. merged into Invesco Institutional (N.A.), Inc. and the consolidated adviser firm was renamed Invesco Advisers, Inc.

  The Adviser has contractually agreed to waive advisory fees and/or reimburse expenses of all shares to the extent necessary to limit total annual fund operating expenses after fee waiver and/or expense reimbursement (excluding certain items discussed below) of Series I shares to 0.18% and Series II shares to 0.43% of average daily net assets, through at least April 30, 2011. In determining the Adviser’s obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the total annual fund operating expenses after fee waiver and/or expense reimbursement to exceed the numbers reflected above: (1) interest; (2) taxes; (3) dividend expense on short sales; (4) extraordinary items or non-routine items; (5) expenses of the underlying funds that are paid indirectly as a result of share ownership of the underlying funds; and (6) expenses that the Funds have incurred but did not actually pay because of an expense offset arrangement. The Board of Trustees or Invesco may terminate the fee waiver arrangement at any time.

  Further, the Adviser has contractually agreed, through at least June 30, 2010, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash in such affiliated money market funds.

  For the year ended December 31, 2009, the Adviser waived advisory fees of $116,197 and reimbursed Fund expenses of $154,085.

  At the request of the Trustees of the Trust, Invesco Ltd. agreed to reimburse expenses incurred by the Fund in connection with market timing matters in the AIM Funds, which may include legal, audit, shareholder reporting, communications and trustee expenses. For the year ended December 31, 2009, Invesco Ltd. did not reimburse any expenses.

  The Trust has entered into a master administrative services agreement with Invesco pursuant to which the Fund has agreed to pay Invesco a fee for costs incurred in providing accounting services and fund administrative services to the Fund and to reimburse Invesco for administrative services fees paid to insurance companies that have agreed to provide services to the participants of separate accounts. These administrative services provided by the insurance companies may include, among other things: the printing of prospectuses, financial reports and proxy statements and the delivery of the same to existing participants; the maintenance of master accounts; the facilitation of purchases and redemptions requested by the participants; and the servicing of participants’

AIM V.I. PowerShares ETF Allocation Fund

accounts. Pursuant to such agreement, for the year ended December 31, 2009, Invesco was paid $50,000 for accounting and fund administrative services and reimbursed $42,158 for services provided by insurance companies.

  The Trust has entered into a transfer agency and service agreement with Invesco Aim Investment Services, Inc. (“IAIS”) pursuant to which the Fund has agreed to pay IAIS a fee for providing transfer agency and shareholder services to the Fund and reimburse IAIS for certain expenses incurred by IAIS in the course of providing such services. For the year ended December 31, 2009, expenses incurred under the agreement are shown in the Statement of Operations as transfer agent fees.

  The Trust has entered into a master distribution agreement with Invesco Aim Distributors, Inc. (“IADI”) to serve as the distributor for the Fund. The Trust has adopted a plan pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund’s Series II shares (the “Plan”). The Fund, pursuant to the Plan, pays IADI compensation at the annual rate of 0.25% of the Fund’s average daily net assets of Series II shares. Of the Plan payments, up to 0.25% of the average daily net assets of the Series II shares may be paid to insurance companies who furnish continuing personal shareholder services to customers who purchase and own Series II shares of the Fund. For the year ended December 31, 2009, expenses incurred under the Plan are detailed in the Statement of Operations as distribution fees.

  Certain officers and trustees of the Trust are officers and directors of Invesco, IAIS and/or IADI.

NOTE 3—Additional Valuation Information

Generally Accepted Accounting Principles (“GAAP”) defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3) generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment’s assigned level:

Level 1 —	Prices are determined using quoted prices in an active market for identical assets.
Level 2 —	Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk and others.
Level 3 —	Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information.

  The following is a summary of the tiered valuation input levels, as of December 31, 2009. The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.

	Level 1		Level 2		Level 3		Total
Equity Securities	$	47,997,737	$	—	$	—	$	47,997,737

NOTE 4—Trustees’ and Officers’ Fees and Benefits

“Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and “Trustees’ and Officers’ Fees and Benefits” also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various AIM Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees are eligible to participate in a retirement plan that provides for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former Trustees who also participate in a retirement plan and receive benefits under such plan. “Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund.

  During the year ended December 31, 2009, the Fund paid legal fees of $2,781 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A member of that firm is a Trustee of the Trust.

NOTE 5—Cash Balances

The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with The State Street Bank and Trust Company, the custodian bank. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (i) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (ii) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.

AIM V.I. PowerShares ETF Allocation Fund

NOTE 6—Distributions to Shareholders and Tax Components of Net Assets

Tax Character of Distributions to Shareholders Paid During the Year Ended December 31, 2009 and the period October 24, 2008 (commencement date) to December 31, 2008:

	2009		2008
Ordinary income	$	549,329	$	8,166

Tax Components of Net Assets at Period-End:

	2009
Undistributed ordinary income	$	213,847
Net unrealized appreciation — investments		3,474,235
Temporary book/tax differences		(2,587	)
Shares of beneficial interest		43,175,100
Total net assets	$	46,860,595

  The difference between book-basis and tax-basis unrealized appreciation is due to differences in the timing of recognition of gains and losses on investments for tax and book purposes. The Fund’s net unrealized appreciation difference is attributable primarily to wash sales.

  The temporary book/tax differences are a result of timing differences between book and tax recognition of income and/or expenses. The Fund’s temporary book/tax differences are the result of the trustee deferral of compensation and retirement plan benefits.

  The Fund does not have a capital loss carryforward at period-end.

NOTE 7—Investment Securities

The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the year ended December 31, 2009 was $47,109,882 and $5,501,093, respectively. Cost of investments on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed Federal income tax reporting period-end.

Unrealized Appreciation (Depreciation) of Investment Securities on a Tax Basis
Aggregate unrealized appreciation of investment securities	$	3,814,800
Aggregate unrealized (depreciation) of investment securities		(340,565	)
Net unrealized appreciation of investment securities	$	3,474,235
Cost of investments for tax purposes is $44,523,502.

NOTE 8—Reclassification of Permanent Differences

Primarily as a result of differing book/tax treatment of excise taxes, startup cost and distributions, on December 31, 2009, undistributed net investment income was increased by $13,628, undistributed net realized gain (loss) was increased by $1,569 and shares of beneficial interest decreased by $15,197. This reclassification had no effect on the net assets of the Fund.

AIM V.I. PowerShares ETF Allocation Fund

NOTE 9—Share Information

	Summary of Share Activity
							October 24, 2008 (commencement
	Year ended						date) to
	December 31, 2009(a)						December 31, 2008
	Shares			Amount			Shares			Amount
Sold:
Series I		56,401		$	738,272			12,501		$	125,010
Series II		3,459,519			43,759,281			35,270			365,022
Issued as reinvestment of dividends:
Series I		880			12,094			223			2,420
Series II		39,214			537,235			530			5,746
Reacquired:
Series I		(4,381	)		(59,601	)		—			—
Series II		(168,256	)		(2,286,815	)		(7	)		(81	)
Net increase in share activity		3,383,377		$	42,700,466			48,517		$	498,117

^(a) There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 96% of the outstanding shares of the Fund. The Fund and the Fund’s principal underwriter or adviser, are parties to participation agreements with these entities whereby these entities sell units of interest in separate accounts funding variable products that are invested in the Fund. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as, securities brokerage, third party record keeping and account servicing and administrative services. The Trust has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially.

NOTE 10—Financial Highlights

The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.

																									Ratio of			Ratio of
																									expenses			expenses
					Net gains																				to average			to average net			Ratio of net
	Net asset				on securities				Dividends			Distributions													net assets			assets without			investment
	value,		Net		(both		Total from		from net			from net						Net asset					Net assets,		with fee waivers			fee waivers			income
	beginning		investment		realized and		investment		investment			realized			Total			value, end		Total			end of period		and/or expenses			and/or expenses			to average			Portfolio
	of period		income(a)		unrealized)		operations		income			gains			Distributions			of period		Return(b)			(000s omitted)		absorbed			absorbed			net assets			turnover(c)
Series I
Year ended 12/31/09	$	11.09	$	0.53	$	2.27	$	2.80	$	(0.17	)	$	(0.03	)	$	(0.20	)	$	13.69		25.19	%	$	899		0.22	%(d)		1.78	%(d)		4.03	%(d)		32	%
Year ended 12/31/08(e)		10.00		0.11		1.17		1.28		(0.19	)		—			(0.19	)		11.09		12.88			141		0.17	(f)		79.26	(f)		5.72	(f)		6
Series II
Year ended 12/31/09		11.07		0.49		2.27		2.76		(0.15	)		(0.03	)		(0.18	)		13.65		24.95			45,962		0.47	(d)		2.03	(d)		3.78	(d)		32
Year ended 12/31/08(e)		10.00		0.11		1.15		1.26		(0.19	)		—			(0.19	)		11.07		12.66			396		0.42	(f)		79.51	(f)		5.47	(f)		6

(a)	Calculated using average shares outstanding.
(b)	Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Total returns are not annualized for periods less than one year, if applicable and do not reflect charges assessed in connection with a variable product, which if included would reduce total returns.
(c)	Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable.
(d)	Ratios are based on average daily net assets (000’s omitted) of $392 and $16,951 for Series I and Series II shares, respectively.
(e)	Commencement date of October 24, 2008.
(f)	Annualized.

AIM V.I. PowerShares ETF Allocation Fund

Report of Independent Registered Public Accounting Firm

To the Board of Trustees of AIM Variable Insurance Funds

and Shareholders of AIM V.I. PowerShares ETF Allocation Fund:

In our opinion, the accompanying statements of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of AIM V.I. PowerShares ETF Allocation Fund, (one of the funds constituting AIM Variable Insurance Funds, hereafter referred to as the “Fund”) at December 31, 2009, the results of each of their operations for the year then ended, and the changes in each of their net assets and the financial highlights for the year then ended and for the period October 24, 2008 (commencement date) through December 31, 2008, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at December 31, 2009 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.

PRICEWATERHOUSECOOPERS LLP

February 10, 2010

Houston, Texas

AIM V.I. PowerShares ETF Allocation Fund

Calculating your ongoing Fund expenses

Example

As a shareholder of the Fund, you incur ongoing costs, including management fees; distribution and/or service fees (12b-1); and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period July 1, 2009 through December 31, 2009.

  The actual and hypothetical expenses in the examples below do not represent the effect of any fees or other expenses assessed in connection with a variable product; if they did, the expenses shown would be higher while the ending account values shown would be lower.

Actual expenses

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

Hypothetical example for comparison purposes

The table below also provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return.

  The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

  Please note that the expenses shown in the table are meant to highlight your ongoing costs. Therefore, the hypothetical information is useful in comparing ongoing costs, and will not help you determine the relative total costs of owning different funds.

							HYPOTHETICAL
							(5% annual return before
			ACTUAL				expenses)
	Beginning		Ending		Expenses		Ending		Expenses		Annualized
	Account Value		Account Value		Paid During		Account Value		Paid During		Expense
Class	(07/01/09)		(12/31/09)1		Period2		(12/31/09)		Period2		Ratio
Series I	$	1,000.00	$	1,168.60	$	0.93	$	1,024.35	$	0.87		0.17	%
Series II		1,000.00		1,167.10		2.29		1,023.09		2.14		0.42

1	The actual ending account value is based on the actual total return of the Fund for the period July 1, 2009 through December 31, 2009, after actual expenses and will differ from the hypothetical ending account value which is based on the Fund’s expense ratio and a hypothetical annual return of 5% before expenses.
2	Expenses are equal to the Fund’s annualized expense ratio as indicated above multiplied by the average account value over the period, multiplied by 184/365 to reflect the most recent fiscal half year.

AIM V.I. PowerShares ETF Allocation Fund

Tax Information

Form 1099-DIV, Form 1042-S and other year-end tax information provide shareholders with actual calendar year amounts that should be included in their tax returns. Shareholders should consult their tax advisors.

  The following distribution information is being provided as required by the Internal Revenue Code or to meet a specific state’s requirement.

  The Fund designates the following amounts or, if subsequently determined to be different, the maximum amount allowable for its fiscal year ended December 31, 2009:

Federal and State Income Tax
Corporate Dividends Received Deduction*	7.04%
U.S. Treasury Obligations*	17.06%

*  The above percentages are based on ordinary income dividends paid to shareholders during the Fund’s fiscal year.

AIM V.I. PowerShares ETF Allocation Fund

Trustees and Officers

The address of each trustee and officer of AIM Variable Insurance Funds (the “Trust”), is 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173. Each trustee oversees 105 portfolios in the AIM Funds complex. The trustees serve for the life of the Trust, subject to their earlier death, incapacitation, resignation, retirement or removal as more specifically provided in the Trust’s organizational documents. Each officer serves for a one year term or until their successors are elected and qualified. Column two below includes length of time served with predecessor entities, if any.

	Trustee and/
Name, Year of Birth and	or Officer	Principal Occupation(s)	Other Directorship(s)
Position(s) Held with the Trust	Since	During Past 5 Years	Held by Trustee
Interested Persons
Martin L. Flanagan1 — 1960 Trustee	2007	Executive Director, Chief Executive Officer and President, Invesco Ltd. (ultimate parent of Invesco Aim and a global investment management firm); Adviser to the Board, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Trustee, The AIM Family of Funds®; Board of Governors, Investment Company Institute; and Member of Executive Board, SMU Cox School of Business	None
		Formerly: Chairman, Invesco Aim Advisors, Inc. (registered investment adviser); Director, Chairman, Chief Executive Officer and President, IVZ Inc. (holding company), INVESCO Group Services, Inc. (service provider) and Invesco North American Holdings, Inc. (holding company); Director, Chief Executive Officer and President, Invesco Holding Company Limited (parent of Invesco Aim and a global investment management firm); Director, Invesco Ltd.; Chairman and Vice Chairman, Investment Company Institute
Philip A. Taylor2 — 1954 Trustee, President and Principal Executive Officer	2006	Head of North American Retail and Senior Managing Director, Invesco Ltd.; Director, Co-Chairman, Co-President and Co-Chief Executive Officer, Invesco Advisers, inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Director, Chief Executive Officer and President, Invesco Aim Advisors, Inc. and 1371 Preferred Inc. (holding company); Director, Chairman, Chief Executive Officer and President, Invesco Aim Management Group, Inc. (financial services holding company); Director, Co-Chairman, Co-President and Co-Chief Executive Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Director and President, INVESCO Funds Group, Inc. (registered investment adviser and registered transfer agent) and AIM GP Canada Inc. (general partner for limited partnerships); Director, Invesco Aim Distributors, Inc. (registered broker dealer); Director and Chairman, Invesco Aim Investment Services, Inc. (registered transfer agent) and INVESCO Distributors, Inc. (registered broker dealer); Director, President and Chairman, INVESCO Inc. (holding company) and Invesco Canada Holdings Inc. (holding company); Chief Executive Officer, AIM Trimark Corporate Class Inc. (corporate mutual fund company) and AIM Trimark Canada Fund Inc. (corporate mutual fund company); Director and Chief Executive Officer, Invesco Trimark Ltd./Invesco Trimark Ltèe (registered investment adviser and registered transfer agent) and Invesco Trimark Dealer Inc. (registered broker dealer); Trustee, President and Principal Executive Officer, The AIM Family of Funds® (other than AIM Treasurer’s Series Trust and Short-Term Investments Trust); Trustee and Executive Vice President, The AIM Family of Funds® (AIM Treasurer’s Series Trust and Short-Term Investments Trust only); and Manager, Invesco PowerShares Capital Management LLC Formerly: Manager, Invesco PowerShares Capital Management LLC; Director, Chief Executive Officer and President, Invesco Aim Advisors, Inc.; Director, Chairman, Chief Executive Officer and President, Invesco Aim Capital Management, Inc.; President, Invesco Trimark Dealer Inc. and Invesco Trimark Ltd./Invesco Trimark Ltèe; Director and President, AIM Trimark Corporate Class Inc. and AIM Trimark Canada Fund Inc.; Senior Managing Director, Invesco Holding Company Limited; Trustee and Executive Vice President, Tax-Free Investments Trust; Director and Chairman, Fund Management Company (former registered broker dealer); President and Principal Executive Officer, The AIM Family of Funds® (AIM Treasurer’s Series Trust, Short-Term Investments Trust and Tax-Free Investments Trust only); President, AIM Trimark Global Fund Inc. and AIM Trimark Canada Fund Inc.	None
Independent Trustees
Bruce L. Crockett — 1944 Trustee and Chair	1993	Chairman, Crockett Technology Associates (technology consulting company)	ACE Limited (insurance company); Captaris, Inc. (unified messaging provider); and Investment Company Institute
Bob R. Baker — 1936 Trustee	2004	Retired	None
Frank S. Bayley — 1939 Trustee	2001	Retired Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios)	None
James T. Bunch — 1942 Trustee	2004	Founder, Green, Manning & Bunch Ltd., (investment banking firm)	Board of Governors, Western Golf Association/Evans Scholars Foundation and Executive Committee, United States Golf Association
Albert R. Dowden — 1941 Trustee	2000	Director of a number of public and private business corporations, including the Boss Group, Ltd. (private investment and management); Reich & Tang Funds (registered investment company); and Homeowners of America Holding Corporation/Homeowners of America Insurance Company (property casualty company) Formerly: Director, Continental Energy Services, LLC (oil and gas pipeline service); Director, CompuDyne Corporation (provider of product and services to the public security market) and Director, Annuity and Life Re (Holdings), Ltd. (reinsurance company); Director, President and Chief Executive Officer, Volvo Group North America, Inc.; Senior Vice President, AB Volvo; Director of various public and private corporations	Board of Nature’s Sunshine Products, Inc.
Jack M. Fields — 1952 Trustee	1997	Chief Executive Officer, Twenty First Century Group, Inc. (government affairs company); and Owner and Chief Executive Officer, Dos Angelos Ranch, L.P. (cattle, hunting, corporate entertainment), Discovery Global Education Fund (non-profit) and Cross Timbers Quail Research Ranch (non-profit)	Administaff
		Formerly: Chief Executive Officer, Texana Timber LP (sustainable forestry company)
Carl Frischling — 1937 Trustee	1993	Partner, law firm of Kramer Levin Naftalis and Frankel LLP	Director, Reich & Tang Funds (16 portfolios)
Prema Mathai-Davis — 1950 Trustee	1998	Retired	None
Lewis F. Pennock — 1942 Trustee	1993	Partner, law firm of Pennock & Cooper	None
Larry Soll — 1942 Trustee	2004	Retired	None
Raymond Stickel, Jr. — 1944 Trustee	2005	Retired Formerly: Director, Mainstay VP Series Funds, Inc. (25 portfolios)	None

1	Mr. Flanagan is considered an interested person of the Trust because he is an officer of the adviser to the Trust, and an officer and a director of Invesco Ltd., ultimate parent of the adviser to the Trust.
2	Mr. Taylor is considered an interested person of the Trust because he is an officer and a director of the adviser to, and a director of the principal underwriter of, the Trust.

T-1

Trustees and Officers — (continued)

	Trustee and/
Name, Year of Birth and	or Officer	Principal Occupation(s)	Other Directorship(s)
Position(s) Held with the Trust	Since	During Past 5 Years	Held by Trustee
Other Officers
Russell C. Burk — 1958 Senior Vice President and Senior Officer	2005	Senior Vice President and Senior Officer of The AIM Family of Funds®	N/A
John M. Zerr — 1962 Senior Vice President, Chief Legal Officer and Secretary	2006	Director, Senior Vice President, Secretary and General Counsel, Invesco Aim Management Group, Inc., Senior Vice President, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Director, Senior Vice President and Secretary, Invesco Aim Distributors, Inc.; Director, Vice President and Secretary, Invesco Aim Investment Services, Inc. and INVESCO Distributors, Inc.; Director and Vice President, INVESCO Funds Group, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The AIM Family of Funds®; and Manager, Invesco PowerShares Capital Management LLC	N/A
		Formerly: Director, Senior Vice President, General Counsel and Secretary, Invesco Aim Advisors, Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco Aim Capital Management, Inc.; Chief Operating Officer and General Counsel, Liberty Ridge Capital, Inc. (an investment adviser); Vice President and Secretary, PBHG Funds (an investment company) and PBHG Insurance Series Fund (an investment company); Chief Operating Officer, General Counsel and Secretary, Old Mutual Investment Partners (a broker-dealer); General Counsel and Secretary, Old Mutual Fund Services (an administrator) and Old Mutual Shareholder Services (a shareholder servicing center); Executive Vice President, General Counsel and Secretary, Old Mutual Capital, Inc. (an investment adviser); and Vice President and Secretary, Old Mutual Advisors Funds (an investment company)
Lisa O. Brinkley — 1959 Vice President	2004	Global Compliance Director, Invesco Ltd.; Chief Compliance Officer, Invesco Aim Distributors, Inc. and Invesco Aim Investment Services, Inc.; and Vice President, The AIM Family of Funds® Formerly: Senior Vice President, Invesco Aim Management Group, Inc.; Senior Vice President and Chief Compliance Officer, Invesco Aim Advisors, Inc. and The AIM Family of Funds®; Vice President and Chief Compliance Officer, Invesco Aim Capital Management, Inc. and Invesco Aim Distributors, Inc.; Vice President, Invesco Aim Investment Services, Inc. and Fund Management Company	N/A
Kevin M. Carome — 1956 Vice President	2003	General Counsel, Secretary and Senior Managing Director, Invesco Ltd.; Director, Invesco Holding Company Limited and INVESCO Funds Group, Inc.; Director and Executive Vice President, IVZ, Inc., Invesco Group Services, Inc., Invesco North American Holdings, Inc. and Invesco Investments (Bermuda) Ltd.; Director and Secretary, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); and Vice President, The AIM Family of Funds® Formerly: Senior Managing Director and Secretary, Invesco North American Holdings, Inc.; Vice President and Secretary, IVZ, Inc. and Invesco Group Services, Inc.; Senior Managing Director and Secretary, Invesco Holding Company Limited; Director, Senior Vice President, Secretary and General Counsel, Invesco Aim Management Group, Inc. and Invesco Aim Advisors, Inc.; Senior Vice President, Invesco Aim Distributors, Inc.; Director, General Counsel and Vice President, Fund Management Company; Vice President, Invesco Aim Capital Management, Inc. and Invesco Aim Investment Services, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The AIM Family of Funds®; Director and Vice President, INVESCO Distributors, Inc.; and Chief Executive Officer and President, INVESCO Funds Group, Inc.	N/A
Sheri Morris — 1964 Vice President, Treasurer and Principal Financial Officer	1999	Vice President, Treasurer and Principal Financial Officer, The AIM Family of Funds®; and Vice President, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.) Formerly: Vice President, Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.; Assistant Vice President and Assistant Treasurer, The AIM Family of Funds® and Assistant Vice President, Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A
Karen Dunn Kelley — 1960 Vice President	1993	Head of Invesco’s World Wide Fixed Income and Cash Management Group; Senior Vice President, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Executive Vice President, Invesco Aim Distributors, Inc.; Senior Vice President, Invesco Aim Management Group, Inc.; and Director, Invesco Mortgage Capital Inc.; Vice President, The AIM Family of Funds® (other than AIM Treasurer’s Series Trust and Short-Term Investments Trust); and President and Principal Executive Officer, The AIM Family of Funds® (AIM Treasurer’s Series Trust and Short-Term Investments Trust only)	N/A
		Formerly: Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Director of Cash Management and Senior Vice President, Invesco Aim Advisors, Inc. and Invesco Aim Capital Management, Inc.; President and Principal Executive Officer, Tax-Free Investments Trust; Director and President, Fund Management Company; Chief Cash Management Officer, Director of Cash Management, Senior Vice President, and Managing Director, Invesco Aim Capital Management, Inc.; Director of Cash Management, Senior Vice President, and Vice President, Invesco Aim Advisors, Inc. and The AIM Family of Funds® (AIM Treasurer’s Series Trust, Short-Term Investments Trust and Tax-Free Investments Trust only)
Lance A. Rejsek — 1967 Anti-Money Laundering Compliance Officer	2005	Anti-Money Laundering Compliance Officer, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Invesco Aim Distributors, Inc., Invesco Aim Investment Services, Inc., and The AIM Family of Funds®	N/A
		Formerly: Anti-Money Laundering Compliance Officer, Fund Management Company, Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.
Todd L. Spillane — 1958 Chief Compliance Officer	2006	Senior Vice President, Invesco Aim Management Group, Inc.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Chief Compliance Officer, The AIM Family of Funds®, INVESCO Private Capital Investments, Inc. (holding company), Invesco Private Capital, Inc. (registered investment adviser) and Invesco Senior Secured Management, Inc. (registered investment adviser); Vice President, Invesco Aim Distributors, Inc. and Invesco Aim Investment Services, Inc.	N/A
		Formerly: Senior Vice President and Chief Compliance Officer, Invesco Aim Advisors, Inc. and Invesco Aim Capital Management, Inc.; Chief Compliance Officer, Invesco Global Asset Management (N.A.), Inc.; Vice President, Invesco Aim Capital Management, Inc. and Fund Management Company

The Statement of Additional Information of the Trust includes additional information about the Fund’s Trustees and is available upon request, without charge, by calling 1.800.959.4246. Please refer to the Fund’s prospectus for information on the Fund’s sub-advisers.

Office of the Fund	Investment Adviser	Distributor	Auditors
11 Greenway Plaza, Suite 100	Invesco Advisers, Inc.	Invesco Aim Distributors, Inc.	PricewaterhouseCoopers LLP
Houston, TX 77046-1173	1555 Peachtree Street, N.E.	11 Greenway Plaza, Suite 100	1201 Louisiana Street, Suite 2900
	Atlanta, GA 30309	Houston, TX 77046-1173	Houston, TX 77002-5678
Counsel to the Fund	Counsel to the	Transfer Agent	Custodian
Stradley Ronon Stevens & Young, LLP	Independent Trustees	Invesco Aim Investment Services, Inc.	State Street Bank and Trust Company
2600 One Commerce Square	Kramer, Levin, Naftalis & Frankel LLP	P.O. Box 4739	225 Franklin
Philadelphia, PA 19103	1177 Avenue of the Americas	Houston, TX 77210-4739	Boston, MA 02110-2801
	New York, NY 10036-2714

T-2

AIM V.I. Small Cap Equity Fund

Annual Report to Shareholders n December 31, 2009

The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter-ends. For the second and fourth quarters, the lists appear in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The Fund’s Form N-Q filings are available on the SEC website, sec.gov. Copies of the Fund’s Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers for the Fund are 811-07452 and 033-57340. The Fund’s most recent portfolio holdings, as filed on Form N-Q, have also been made available to insurance companies issuing variable annuity contracts and variable life insurance policies (“variable products”) that invest in the Fund.

A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, from our Client Services department at 800 410 4246 or on the Invesco Aim website, invescoaim.com. On the home page, scroll down and click on Proxy Policy. The information is also available on the SEC website, sec.gov.

Information regarding how the Fund voted proxies related to its portfolio securities during the 12 months ended June 30, 2009, is available at our website, invescoaim.com. Click the About Us tab at the top of the home page; click Legal Information; and then click Proxy Voting Search. The information is also available on the SEC website, sec.gov.

Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Aim Distributors, Inc. is the U.S. distributor for Invesco Ltd.’s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd.

This report must be accompanied or preceded by a currently effective Fund prospectus and variable product prospectus, which contain more complete information, including sales charges and expenses. Investors should read each carefully before investing.

Invesco Aim Distributors, Inc.

NOT FDIC INSURED  |  MAY LOSE VALUE  |  NO BANK GUARANTEE

Management’s Discussion of Fund Performance

Performance summary

For the year ended December 31, 2009, Series I shares of AIM V.I. Small Cap Equity Fund had double-digit positive returns, but underperformed the Fund’s style-specific index, the Russell 2000 Index. In 2009, many lower quality companies with significant debt levels or other high-risk business practices saw their stocks surge, but those are not the companies we desire to own in the portfolio. Additionally, much of the Fund’s underperformance was due to stock selection in several sectors.

   The Fund also underperformed the broad market, as measured by the S&P 500 Index.

   Your Fund’s long-term performance appears later in this report.

Fund vs. Indexes

Total returns, 12/31/08 to 12/31/09, excluding variable product issuer charges.
If variable product issuer charges were included, returns would be lower.

Series I Shares	21.29	%
Series II Shares	20.90
S&P 500 Index▼ (Broad Market Index)	26.47
Russell 2000 Index▼ (Style-Specific Index)	27.17
Lipper VUF Small-Cap Core Funds Index▼ (Peer Group Index)	29.83

^▼ Lipper Inc.

How we invest

Our investment process seeks to identify attractively valued small-cap companies with high growth potential, demonstrated by consistent and accelerating revenue and earnings growth.

   We begin with a quantitative model that ranks companies based on a set of fundamental, valuation and timeliness factors. This proprietary model provides an objective approach to identifying new investment opportunities as the highest-ranked stocks become the primary focus of our research efforts.

   Our stock selection process is based on a rigorous three-step process that includes fundamental, valuation and timeliness analysis.

1. Fundamental analysis. Building financial models and conducting in-depth interviews with company management.

2. Valuation analysis. Identifying attractively valued stocks given their growth potential over a one- to two-year horizon.

3. Timeliness analysis. Identifying the “timeliness” of a stock purchase. We review trading volume characteristics and trend analysis to make sure there are no signs of the stock deterioration. This also serves as a risk management measure that helps us confirm our high conviction candidates.

    Portfolio construction plays an important role in risk management. We align the Fund with the S&P 600 Small-Cap Index, the benchmark we believe represents the small-cap-growth asset class. We seek to manage risk by keeping the Fund’s sector weightings in line with the benchmark by staying fully diversified in all those sectors. We also seek to limit stock-specific risk by investing in typically 120-130 holdings.

    We consider selling a stock when it no longer meets our investment criteria, based on:

n Our original investment thesis is not valid because the fundamentals are no longer intact.

n The price target set at purchase is exceeded.

n The company’s timeliness profile deteriorates.

Market conditions and your Fund

The year ended December 31, 2009, was truly a tale of two markets. During the first two months of the reporting period, equity markets experienced steep declines as severe problems in credit markets, a rapidly deteriorating housing market, rising energy and food prices and a deteriorating outlook for corporate earnings led to a global recession. However, the U.S. economy began to show signs that the economic contraction was moderating, and equity markets rapidly reversed direction beginning in early March 2009 and rallied strongly for most of the remaining months in the year.

   In this environment, indexes measuring the performance of large-, mid- and small-cap stocks all had positive returns, with mid-cap stocks outperforming large- and small-cap stocks.¹ In terms of investment style, growth stocks outperformed value stocks.¹ The sectors with the highest returns in the broad market as represented by the S&P 500 Index included more economically sensitive sectors such as information technology (IT), materials and consumer discretionary.¹

   The Fund had double-digit absolute returns, but underperformed the Russell 2000 Index due primarily to stock selection in several sectors, including industrials, IT, materials and health care. The Fund underperformed by the widest margin in the industrials sector, driven by both stock selection and an overweight position. One of the leading detractors from performance was Team, a company that provides maintenance and construction services for high pressure piping systems. Other key detractors from performance included technological product designer AeroVironment, steel pipeline maker Northwest Pipe and tool

Portfolio Composition
By sector
Information Technology	20.7	%
Industrials	19.0
Financials	14.5
Health Care	13.8
Consumer Discretionary	13.6
Energy	8.2
Materials	3.4
Telecommunication Services	2.2
Utilities	1.8
Consumer Staples	1.5
Money Market Funds Plus
Other Assets Less Liabilities	1.3

Top 10 Equity Holdings*
1.	Ariba Inc.	1.3	%
2.	Complete Production Services, Inc.	1.3
3.	Cooper Cos., Inc.	1.3
4.	OSI Systems, Inc.	1.2
5.	TRW Automotive Holdings Corp.	1.2
6.	ABM Industries Inc.	1.2
7.	LaSalle Hotel Properties	1.1
8.	Arris Group Inc.	1.1
9.	Anixter International Inc.	1.1
10.	Phillips-Van Heusen Corp.	1.1

Top Five Industries*
1.	Oil & Gas Equipment & Services	4.4	%
2.	Oil & Gas Exploration & Production	3.8
3.	Regional Banks	3.5
4.	Restaurants	3.4
5.	Electrical Components & Equipment	3.1

Total Net Assets	$193.0 million
Total Number of Holdings*		119

The Fund’s holdings are subject to change, and there is no assurance that the Fund will continue to hold any particular security.

* Excluding money market fund holdings.

AIM V.I. Small Cap Equity Fund

maker Snap-On. Despite weak performance, we continued to own AeroVironment and Northwest Pipe, but we sold Snap-On due to deteriorating fundamentals.

   The Fund also underperformed in the IT sector, driven by stock selection. A leading detractor from Fund performance was Comtech Telecommunications, a company that designs and manufactures innovative communication products and services. Much of the remaining under-performance in the IT sector was because the Fund did not have exposure to many of the more highly leveraged and/or cyclical companies that had the strongest performance during the market rebound. Our investment process focuses on companies that can self-fund their growth initiatives, so many of our holdings underperformed these more highly leveraged companies as credit markets began to improve following the March market inflection point.

   Underperformance in the materials sector was due to both stock selection and an underweight position. Similar to what happened in the IT sector, much of the Fund’s underperformance in the materials sector was because the Fund did not own many of the highly leveraged and/or cyclical companies that outperformed during the market rebound.

   The Fund underperformed in the health care sector due to stock selection. The leading detractor from overall Fund performance was ViroPharma, a pharmaceutical company that focuses on discovering drugs to combat RNA viruses. A second company that detracted from Fund performance was Cardiac Science, a medical device company that makes cardiovascular monitoring and therapeutic equipment. We sold Cardiac Science.

   Some of this underperformance was offset by outperformance in other sectors, including financials, energy and utilities. The Fund outperformed by the widest margin in the financials sector, due to stock selection and an underweight position. Several of the Fund’s diversified financials holdings had strong performance driven by improving equity markets, including Gamco Investors, Affiliated Managers Group and KBW.

   The Fund also benefited from stock selection and an underweight position in the banks industry group.

   Outperformance in the energy sector was due to stock selection and an overweight position. Many energy equipment and services holdings had strong performance following the market

rebound, including Oceaneering International, Natco Group and Lufkin Industries. These companies benefited from accelerating demand for their products and services as the global economy showed signs of dramatic improvement and oil prices rebounded. We sold Natco Group.

    Outperformance in the utilities sector was driven by stock selection and an underweight position. Energen was a key contributor to Fund performance during the period.

   During the year, the most significant positioning changes included additions in more economically sensitive sectors including IT, energy and consumer discretionary. Purchases in these sectors were funded by reducing exposure to the more defensive sectors including consumer staples and utilities. All changes to the Fund were based on our bottom-up stock selection process of identifying high-quality growth companies trading at what we believe are attractive valuations.

   We thank you for your commitment to AIM V.I. Small Cap Equity Fund.

1  Lipper Inc.

The views and opinions expressed in management’s discussion of Fund performance are those of Invesco Advisers, Inc. These views and opinions are subject to change at any time based on factors such as market and economic conditions. These views and opinions may not be relied upon as investment advice or recommendations, or as 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 Invesco Advisers, Inc. 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.

See important Fund and index disclosures later in this report.

Juliet Ellis
Chartered Financial Analyst, senior portfolio manager, is lead manager of AIM V.I. Small Cap Equity Fund. Ms. Ellis joined Invesco Aim in 2004. She previously served as senior portfolio manager of two small-cap funds for another company and was responsible for the management of more than $2 billion in assets. Ms. Ellis began her investment career in 1981 as a financial consultant. She is a cum laude and Phi Beta Kappa graduate of Indiana University with a B.A. in economics and political science.

Juan Hartsfield
Chartered Financial Analyst, portfolio manager, is manager of AIM V.I. Small Cap Equity Fund. Prior to joining Invesco Aim in 2004, he began his investment career in 2000 as an equity analyst and most recently served as a portfolio manager. Mr. Hartsfield earned a B.S. in petroleum engineering from The University of Texas and his M.B.A. from the University of Michigan.

Assisted by the Small Cap Growth/Core Team

AIM V.I. Small Cap Equity Fund

Your Fund’s Long-Term Performance

Results of a $10,000 Investment – Oldest Share Classes since inception
Fund data from 8/29/03, index data from 8/31/03

1 Lipper Inc.

Past performance cannot guarantee comparable future results.

    This chart, which is a logarithmic chart, presents the fluctuations in the value of the Fund and its indexes. We believe that a logarithmic chart is more effective than other types of charts in illustrating

changes in value during the early years shown in the chart. The vertical axis, the one that indicates the dollar value of an investment, is constructed with each segment representing a percent change in the value of the investment. In this chart, each segment represents a

doubling, or 100% change, in the value of the investment. In other words, the space between $5,000 and $10,000 is the same size as the space between $10,000 and $20,000.

Average Annual Total Returns
As of 12/31/09
Series I Shares
Inception (8/29/03)	5.28	%
5 Years	2.16
1 Year	21.29
Series II Shares
Inception (8/29/03)	5.05	%
5 Years	1.91
1 Year	20.90

The performance of the Fund’s Series I and Series II share classes will differ primarily due to different class expenses.

   The performance data quoted represent past performance and cannot guarantee comparable future results; current performance may be lower or higher. Please contact your variable product issuer or financial adviser for the most recent month-end variable product performance. Performance figures reflect Fund expenses, reinvested distributions and changes in

net asset value. Investment return and principal value will fluctuate so that you may have a gain or loss when you sell shares.

   The total annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 1.10% and 1.35%, respectively. The expense ratios presented above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

   AIM V.I. Small Cap Equity Fund, a series portfolio of AIM Variable Insurance Funds, is currently offered through insurance companies issuing variable products. You cannot purchase shares of the Fund directly. Performance figures given represent the Fund and are not intended to reflect actual variable product values. They do not reflect sales charges, expenses and fees assessed in connection with a

variable product. Sales charges, expenses and fees, which are determined by the variable product issuers, will vary and will lower the total return.

   The most recent month-end performance data at the Fund level, excluding variable product charges, is available on the Invesco Aim automated information line, 866 702 4402. As mentioned above, for the most recent month-end performance including variable product charges, please contact your variable product issuer or financial adviser.

   Had the adviser not waived fees and/ or reimbursed expenses in the past, performance would have been lower.

AIM V.I. Small Cap Equity Fund

AIM V.I. Small Cap Equity Fund’s investment objective is long-term growth of capital.

n Unless otherwise stated, information presented in this report is as of December 31, 2009, and is based on total net assets.

n Unless otherwise noted, all data provided by Invesco.

Principal risks of investing in the Fund

The values of convertible securities in which the Fund invests may be affected by market interest rates, the risk that the issuer may default on interest or principal payments, and the value of the underlying common stock into which these securities may be converted.

   Prices of equity securities change in response to many factors, including the historical and prospective earnings of the issuer, the value of its assets, general economic conditions, interest rates, investor perceptions and market liquidity.

   Foreign securities have additional risks, including exchange rate changes, political and economic upheaval, relative lack of information, relatively low market liquidity, and the potential lack of strict financial and accounting controls and standards.

   Since a large percentage of the Fund’s assets may be invested in securities of a limited number of companies, each investment has a greater effect on the Fund’s overall performance, and any change in the value of those securities could significantly affect the value of your investment in the Fund.

   There is no guarantee that the investment techniques and risk analysis used by the Fund’s portfolio managers will produce the desired results.

   The prices of securities held by the Fund may decline in response to market risks.

   Investing in a fund that invests in smaller companies involves risks not associated with investing in more established companies, such as business risk, stock price fluctuations and illiquidity.

   Although the Fund's return during certain periods was positively impacted by its investments in initial public offerings (IPOs), there can be no assurance that the fund will have favorable IPO investment opportunities in the future.

About indexes used in this report

The S&P 500^® Index is an unmanaged index considered representative of the U.S. stock market.

   The Russell 2000^® Index is an unmanaged index considered representative of small-cap stocks. The Russell 2000 Index is a trademark/service mark of the Frank Russell Co. Russell^® is a trademark of the Frank Russell Co.

   The Lipper VUF Small-Cap Core Funds Index is an unmanaged index considered representative of small-cap core variable insurance underlying funds tracked by Lipper.

   The S&P SmallCap 600 Index is a market-value weighted index that consists of 600 small cap domestic stocks chosen for market size, liquidity, and industry group representation.

   The Fund is not managed to track the performance of any particular index, including the indexes defined here, and consequently, the performance of the Fund may deviate significantly from the performance of the indexes.

   A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group reflects fund expenses; performance of a market index does not.

Other information

The Chartered Financial Analyst^® (CFA^®) designation is globally recognized and attests to a charterholder’s success in a rigorous and comprehensive study program in the field of investment management and research analysis.

   The returns shown in management’s discussion of Fund performance are based on net asset values calculated for shareholder transactions. Generally accepted accounting principles require adjustments to be made to the net assets of the Fund at period end for financial reporting purposes, and as such, the net asset values for shareholder transactions and the returns based on those net asset values may differ from the net asset values and returns reported in the Financial Highlights. Additionally, the returns and net asset values shown throughout this report are at the Fund level only and do not include variable product issuer charges. If such charges were included, the total returns would be lower.

   Industry classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s.

AIM V.I. Small Cap Equity Fund

Schedule of Investments^(a)

December 31, 2009

	Shares		Value
Common Stocks & Other Equity Interests–98.71%
Advertising–1.04%
Interpublic Group of Cos., Inc. (The)(b)		271,919	$	2,006,762
Aerospace & Defense–2.37%
AAR Corp.(b)		90,293		2,074,933
Aerovironment Inc.(b)		40,083		1,165,614
Curtiss-Wright Corp.		42,710		1,337,677
				4,578,224
Airlines–0.86%
Allegiant Travel Co.(b)(c)		35,309		1,665,526
Apparel Retail–1.79%
Citi Trends Inc.(b)		57,300		1,582,626
J. Crew Group, Inc.(b)		42,036		1,880,691
				3,463,317
Apparel, Accessories & Luxury Goods–2.83%
Carter’s, Inc.(b)		70,262		1,844,377
Phillips-Van Heusen Corp.		53,073		2,159,010
Volcom, Inc.(b)		87,566		1,465,855
				5,469,242
Application Software–2.56%
Blackbaud, Inc.		45,368		1,072,046
Parametric Technology Corp.(b)		111,017		1,814,018
Quest Software, Inc.(b)		111,166		2,045,454
				4,931,518
Asset Management & Custody Banks–2.31%
Affiliated Managers Group, Inc.(b)		21,500		1,448,025
GAMCO Investors, Inc.–Class A		26,931		1,300,498
SEI Investments Co.		97,352		1,705,607
Teton Advisers, Inc.–Class A		1		9
				4,454,139
Auto Parts & Equipment–1.18%
TRW Automotive Holdings Corp.(b)		95,222		2,273,901
Biotechnology–0.35%
InterMune, Inc.(b)		52,404		683,348
Casinos & Gaming–1.03%
Bally Technologies Inc.(b)		48,288		1,993,812
Communications Equipment–2.60%
Arris Group Inc.(b)		190,171		2,173,654
Comtech Telecommunications Corp.(b)		46,992		1,647,070
JDS Uniphase Corp.(b)		145,465		1,200,086
				5,020,810
Construction & Engineering–1.37%
MYR Group Inc.(b)		82,811		1,497,223
Northwest Pipe Co.(b)		42,548		1,142,839
				2,640,062
Construction, Farm Machinery & Heavy Trucks–1.64%
Titan International, Inc.		220,946		1,791,872
Trinity Industries, Inc.		78,783		1,373,976
				3,165,848
Data Processing & Outsourced Services–2.06%
CyberSource Corp.(b)		102,609		2,063,467
Wright Express Corp.(b)		59,901		1,908,446
				3,971,913
Diversified Chemicals–0.88%
FMC Corp.		30,558		1,703,914
Diversified Metals & Mining–0.98%
Compass Minerals International, Inc.		28,152		1,891,533
Diversified Support Services–0.54%
EnerNOC, Inc.(b)		34,029		1,034,141
Electrical Components & Equipment–3.09%
Baldor Electric Co.		67,748		1,903,041
Belden Inc.		64,652		1,417,172
General Cable Corp.(b)		38,995		1,147,233
GrafTech International Ltd.(b)		96,365		1,498,476
				5,965,922
Electronic Equipment & Instruments–1.71%
OSI Systems, Inc.(b)		83,887		2,288,437
Rofin-Sinar Technologies, Inc.(b)		42,774		1,009,894
				3,298,331
Environmental & Facilities Services–2.73%
ABM Industries Inc.		109,760		2,267,642
Team, Inc.(b)		70,086		1,318,318
Waste Connections, Inc.(b)		50,531		1,684,703
				5,270,663
Gas Utilities–1.49%
Energen Corp.		30,573		1,430,816
UGI Corp.		59,926		1,449,610
				2,880,426
General Merchandise Stores–0.53%
Pantry, Inc. (The)(b)		75,375		1,024,346

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

AIM V.I. Small Cap Equity Fund

	Shares		Value
Health Care Distributors–0.84%
Owens & Minor, Inc.		37,550	$	1,612,022
Health Care Equipment–1.97%
ev3 Inc.(b)		141,449		1,886,930
Invacare Corp.		77,148		1,924,071
				3,811,001
Health Care Facilities–1.73%
Skilled Healthcare Group Inc.–Class A(b)		172,380		1,284,231
Universal Health Services, Inc.–Class B		67,382		2,055,151
				3,339,382
Health Care Services–1.80%
Emdeon, Inc.–Class A(b)		110,418		1,683,874
Gentiva Health Services, Inc.(b)		66,578		1,798,272
				3,482,146
Health Care Supplies–2.10%
Cooper Cos., Inc. (The)		63,447		2,418,600
Haemonetics Corp.(b)		29,641		1,634,701
				4,053,301
Health Care Technology–1.19%
athenahealth Inc.(b)		21,403		968,272
Omnicell, Inc.(b)		113,756		1,329,807
				2,298,079
Home Furnishings–0.78%
Ethan Allen Interiors Inc.(c)		111,760		1,499,819
Industrial Machinery–2.35%
Chart Industries, Inc.(b)		57,894		958,146
Gardner Denver Inc.		6,058		257,768
RBC Bearings Inc.(b)		61,489		1,496,027
Valmont Industries, Inc.		23,147		1,815,882
				4,527,823
Insurance Brokers–1.50%
Arthur J. Gallagher & Co.		69,324		1,560,483
eHealth, Inc.(b)		81,136		1,333,065
				2,893,548
Integrated Telecommunication Services–1.82%
Alaska Communications Systems Group Inc.		190,916		1,523,510
Cincinnati Bell Inc.(b)		577,776		1,993,327
				3,516,837
Internet Software & Services–2.56%
Ancestry.com, Inc.(b)		76,052		1,065,488
GSI Commerce, Inc.(b)		74,530		1,892,317
Open Text Corp. (Canada)(b)		49,005		1,992,053
				4,949,858
Investment Banking & Brokerage–1.02%
KBW Inc.(b)		71,963		1,968,908
IT Consulting & Other Services–0.98%
CACI International Inc.–Class A(b)		38,534		1,882,386
Life Sciences Tools & Services–1.37%
Dionex Corp.(b)		25,100		1,854,137
eResearch Technology, Inc.(b)		130,919		786,823
				2,640,960
Marine–0.59%
DryShips Inc. (Greece)(b)		194,150		1,129,953
Metal & Glass Containers–0.87%
AptarGroup, Inc.		46,900		1,676,206
Movies & Entertainment–1.00%
World Wrestling Entertainment, Inc.–Class A		126,256		1,935,504
Office REIT’s–1.81%
Alexandria Real Estate Equities, Inc.(c)		25,124		1,615,222
Digital Realty Trust, Inc.		37,300		1,875,444
				3,490,666
Oil & Gas Equipment & Services–4.36%
Complete Production Services, Inc.(b)		187,932		2,443,116
Dresser-Rand Group, Inc.(b)		59,837		1,891,448
Lufkin Industries, Inc.		28,585		2,092,422
Oceaneering International, Inc.(b)		33,862		1,981,604
				8,408,590
Oil & Gas Exploration & Production–3.83%
Arena Resources, Inc.(b)		46,316		1,997,146
Comstock Resources, Inc.(b)		40,560		1,645,519
Forest Oil Corp.(b)		88,857		1,977,068
Penn Virginia Corp.		83,347		1,774,458
				7,394,191
Packaged Foods & Meats–1.51%
Flowers Foods, Inc.		52,123		1,238,443
TreeHouse Foods, Inc.(b)		42,998		1,670,902
				2,909,345
Pharmaceuticals–2.49%
Biovail Corp. (Canada)		124,041		1,731,612
ViroPharma Inc.(b)		172,458		1,446,923
VIVUS, Inc.(b)		176,470		1,621,759
				4,800,294
Property & Casualty Insurance–1.70%
FPIC Insurance Group, Inc.(b)		45,475		1,756,244
Hanover Insurance Group Inc. (The)		34,490		1,532,391
				3,288,635

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

AIM V.I. Small Cap Equity Fund

	Shares		Value
Regional Banks–3.51%
BancFirst Corp.		29,032	$	1,075,345
Commerce Bancshares, Inc.		42,667		1,652,066
Community Trust Bancorp, Inc.		52,394		1,281,034
First Financial Bankshares, Inc.		25,508		1,383,299
FirstMerit Corp.		68,392		1,377,415
				6,769,159
Restaurants–3.42%
Brinker International, Inc.		92,381		1,378,324
DineEquity, Inc.(b)		51,364		1,247,632
Papa John’s International, Inc.(b)		52,578		1,228,222
Sonic Corp.(b)		139,013		1,399,861
Texas Roadhouse, Inc.(b)		119,888		1,346,342
				6,600,381
Semiconductor Equipment–2.80%
ATMI, Inc.(b)		88,933		1,655,932
Cymer, Inc.(b)		53,440		2,051,027
MKS Instruments, Inc.(b)		98,006		1,706,285
				5,413,244
Semiconductors–2.08%
ON Semiconductor Corp.(b)		230,466		2,030,405
Semtech Corp.(b)		116,859		1,987,772
				4,018,177
Specialized REIT’s–2.60%
LaSalle Hotel Properties		104,148		2,211,062
Senior Housing Properties Trust		70,946		1,551,589
Universal Health Realty Income Trust		39,289		1,258,427
				5,021,078
Specialty Chemicals–0.69%
Zep, Inc.		76,868		1,331,354
Systems Software–1.28%
Ariba Inc.(b)		197,837		2,476,919
Technology Distributors–2.10%
Anixter International Inc.(b)		45,876		2,160,760
Ingram Micro Inc.–Class A(b)		108,947		1,901,125
				4,061,885
Trading Companies & Distributors–0.92%
Beacon Roofing Supply, Inc.(b)		110,506		1,768,096
Trucking–2.53%
Landstar System, Inc.		46,887		1,817,809
Marten Transport, Ltd.(b)		69,458		1,246,771
Old Dominion Freight Line, Inc.(b)		58,958		1,810,011
				4,874,591
Water Utilities–0.27%
Cascal N.V. (United Kingdom)		94,858		513,182
Wireless Telecommunication Services–0.40%
NTELOS Holdings Corp.		43,251		770,733
Total Common Stocks & Other Equity Interests (Cost $175,969,065)				190,515,951
Money Market Funds–2.18%
Liquid Assets Portfolio–Institutional Class(d)		2,101,527		2,101,527
Premier Portfolio–Institutional Class(d)		2,101,527		2,101,527
Total Money Market Funds (Cost $4,203,054)				4,203,054
TOTAL INVESTMENTS (excluding investments purchased with cash collateral from securities on loan)–100.89% (Cost $180,172,119)				194,719,005
Investments Purchased with Cash Collateral from Securities on Loan
Money Market Funds–1.73%
Liquid Assets Portfolio–Institutional Class (Cost $3,340,596)(d)(e)		3,340,596		3,340,596
TOTAL INVESTMENTS–102.62% (Cost $183,512,715)				198,059,601
OTHER ASSETS LESS LIABILITIES–(2.62)%				(5,062,901	)
NET ASSETS–100.00%			$	192,996,700

Investment Abbreviations:

REIT – Real Estate Investment Trust

Notes to Schedule of Investments:

(a)	Industry and/or sector classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s.
(b)	Non-income producing security.
(c)	All or a portion of this security was out on loan at December 31, 2009.
(d)	The money market fund and the Fund are affiliated by having the same investment adviser.
(e)	The security has been segregated to satisfy the commitment to return the cash collateral received in securities lending transactions upon the borrower’s return of the securities loaned. See Note 1I.

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

AIM V.I. Small Cap Equity Fund

Statement of Assets and Liabilities

December 31, 2009

Assets:
Investments, at value (Cost $175,969,065)*	$	190,515,951
Investments in affiliated money market funds, at value and cost		7,543,650
Total investments, at value (Cost $183,512,715)		198,059,601
Receivables for:
Investments sold		277,912
Fund shares sold		162,889
Dividends		187,669
Investment for trustee deferred compensation and retirement plans		14,033
Total assets		198,702,104
Liabilities:
Payables for:
Investments purchased		2,142,508
Fund shares reacquired		28,668
Collateral upon return of securities loaned		3,340,596
Accrued fees to affiliates		127,810
Accrued other operating expenses		42,512
Trustee deferred compensation and retirement plans		23,310
Total liabilities		5,705,404
Net assets applicable to shares outstanding	$	192,996,700
Net assets consist of:
Shares of beneficial interest	$	217,393,534
Undistributed net investment income (loss)		(24,065	)
Undistributed net realized gain (loss)		(38,919,655	)
Unrealized appreciation		14,546,886
	$	192,996,700
Net Assets:
Series I	$	178,948,615
Series II	$	14,048,085
Shares outstanding, $0.001 par value per share, unlimited number of shares authorized:
Series I		13,914,570
Series II		1,106,895
Series I:
Net asset value per share	$	12.86
Series II:
Net asset value per share	$	12.69

*  At December 31, 2009, securities with an aggregate value of $3,241,694 were on loan to brokers.

Statement of Operations

For the year ended December 31, 2009

Investment income:
Dividends (net of foreign withholding taxes of $3,001)	$	1,639,947
Dividends from affiliated money market funds (includes securities lending income of $153,338)		169,279
Total investment income		1,809,226
Expenses:
Advisory fees		1,247,396
Administrative services fees		468,254
Custodian fees		22,570
Distribution fees — Series II		23,111
Transfer agent fees		17,978
Trustees’ and officers’ fees and benefits		25,419
Other		49,311
Total expenses		1,854,039
Less: Fees waived		(4,276	)
Net expenses		1,849,763
Net investment income (loss)		(40,537	)
Realized and unrealized gain (loss) from:
Net realized gain (loss) from investment securities (includes net gains from securities sold to affiliates of $34,634)		(20,760,004	)
Change in net unrealized appreciation of investment securities		54,460,389
Net realized and unrealized gain		33,700,385
Net increase in net assets resulting from operations	$	33,659,848

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

AIM V.I. Small Cap Equity Fund

Statement of Changes in Net Assets

For the years ended December 31, 2009 and 2008

	2009			2008
Operations:
Net investment income (loss)	$	(40,537	)	$	281,807
Net realized gain (loss)		(20,760,004	)		(17,937,663	)
Change in net unrealized appreciation (depreciation)		54,460,389			(52,374,299	)
Net increase (decrease) in net assets resulting from operations		33,659,848			(70,030,155	)
Distributions to shareholders from net investment income:
Series I		(278,362	)		—
Series II		(15,577	)		—
Total distributions from net investment income		(293,939	)		—
Distributions to shareholders from net realized gains:
Series I		—			(660,008	)
Series II		—			(21,507	)
Total distributions from net realized gains		—			(681,515	)
Share transactions-net:
Series I		(4,469,997	)		53,423,230
Series II		6,233,450			6,837,898
Net increase in net assets resulting from share transactions		1,763,453			60,261,128
Net increase (decrease) in net assets		35,129,362			(10,450,542	)
Net assets:
Beginning of year		157,867,338			168,317,880
End of year (includes undistributed net investment income (loss) of $(24,065) and $261,903, respectively)	$	192,996,700		$	157,867,338

Notes to Financial Statements

December 31, 2009

NOTE 1—Significant Accounting Policies

AIM V.I. Small Cap Equity Fund (the “Fund”) is a series portfolio of AIM Variable Insurance Funds (the “Trust”). The Trust is a Delaware statutory trust registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end series management investment company consisting of twenty-one separate portfolios, (each constituting a “Fund”). The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Matters affecting each Fund or class will be voted on exclusively by the shareholders of such Fund or class. Current Securities and Exchange Commission (“SEC”) guidance, however, requires participating insurance companies offering separate accounts to vote shares proportionally in accordance with the instructions of the contract owners whose investments are funded by shares of each Fund or class.

  The Fund’s investment objective is long-term growth of capital.

  The Fund currently offers two classes of shares, Series I and Series II, both of which are offered to insurance company separate accounts funding variable annuity contracts and variable life insurance policies (“variable products”).

  The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements.

A.

Security Valuations — Securities, including restricted securities, are valued according to the following policy.

A security listed or traded on an exchange (except convertible bonds) is valued at its last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales or official closing price on a particular day, the security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based on prices furnished by independent pricing services or market makers. When such securities are valued by an independent pricing service they may be considered fair valued. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean between the last bid and ask prices from the exchange on which they are principally traded. Options not listed on an exchange are valued by an independent source at the mean between the last bid and ask prices. For purposes of determining net asset value per share, futures and option contracts generally are valued 15 minutes after the close of the customary trading session of the New York Stock Exchange (“NYSE”).

AIM V.I. Small Cap Equity Fund

	Investments in open-end and closed-end registered investment companies that do not trade on an exchange are valued at the end of day net asset value per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded.
	Debt obligations (including convertible bonds) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution-size trading in similar groups of securities, developments related to specific securities, dividend rate, yield, quality, type of issue, coupon rate, maturity, individual trading characteristics and other market data. Short-term obligations, including commercial paper, having 60 days or less to maturity are recorded at amortized cost which approximates value. Debt securities are subject to interest rate and credit risks. In addition, all debt securities involve some risk of default with respect to interest and/or principal payments.
	Foreign securities (including foreign exchange contracts) are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the NYSE. If market quotations are available and reliable for foreign exchange traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that are significant and make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economical upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
	Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities and Corporate Loans. The mean between the last bid and asked prices may be used to value debt obligations other than Corporate Loans.
	Securities for which market quotations are not readily available or are unreliable are valued at fair value as determined in good faith by or under the supervision of the Trust’s officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a security’s fair value.
	Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
B.	Securities Transactions and Investment Income — Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income is recorded on the accrual basis from settlement date. Dividend income is recorded on the ex-dividend date.
	The Fund may periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain/loss for investments no longer held and as unrealized gain/loss for investments still held.
	Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the realized and unrealized net gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the Fund’s net asset value and, accordingly, they reduce the Fund’s total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in the Statement of Operations and Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the adviser.
	The Fund allocates income and realized and unrealized capital gains and losses to a class based on the relative net assets of each class.
C.	Country Determination — For the purposes of making investment selection decisions and presentation in the Schedule of Investments, the investment adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuer’s securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted.
D.	Distributions — Distributions from income and net realized capital gain, if any, are generally paid to separate accounts of participating insurance companies annually and recorded on ex-dividend date.
E.	Federal Income Taxes — The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code necessary to qualify as a regulated investment company and to distribute substantially all of the Fund’s taxable earnings to shareholders. As such, the Fund will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements.

AIM V.I. Small Cap Equity Fund

	The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.
F.	Expenses — Fees provided for under the Rule 12b-1 plan of a particular class of the Fund and which are directly attributable to that class are charged to the operations of such class. All other expenses are allocated among the classes based on relative net assets.
G.	Accounting Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print, which is generally 45 days from the period-end date.
H.	Indemnifications — Under the Trust’s organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Fund’s servicing agreements, that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote.
I.	Securities Lending — The Fund may lend portfolio securities having a market value up to one-third of the Fund’s total assets. Such loans are secured by collateral equal to no less than the market value of the loaned securities determined daily by the securities lending provider. Such collateral will be cash or debt securities issued or guaranteed by the U.S. Government or any of its sponsored agencies. Cash collateral received in connection with these loans is invested in short-term money market instruments or affiliated money market funds and is shown as such on the Schedule of Investments. It is the Fund’s policy to obtain additional collateral from or return excess collateral to the borrower by the end of the next business day, following the valuation date of the securities loaned. Therefore, the value of the collateral held may be temporarily less than the value of the securities on loan. Lending securities entails a risk of loss to the Fund if and to the extent that the market value of the securities loaned were to increase and the borrower did not increase the collateral accordingly, and the borrower fails to return the securities. Upon the failure of the borrower to return the securities, collateral may be liquidated and the securities may be purchased on the open market to replace the loaned securities. The Fund could experience delays and costs in gaining access to the collateral. The Fund bears the risk of any deficiency in the amount of the collateral available for return to the borrower due to any loss on the collateral invested. Dividends received on cash collateral investments for securities lending transactions, which are net of compensation to counterparties, is included in Dividends from affiliates on the Statement of Operations. The aggregate value of securities out on loan is shown as a footnote on the Statement of Assets and Liabilities, if any.

NOTE 2—Advisory Fees and Other Fees Paid to Affiliates

The Trust has entered into a master investment advisory agreement with Invesco Advisers, Inc. (the “Adviser” or “Invesco”). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Adviser based on the annual rate of the Fund’s average daily net assets as follows:

Average Net Assets	Rate
First $250 million		0	.745%
Next $250 million		0	.73%
Next $500 million		0	.715%
Next $1.5 billion		0	.70%
Next $2.5 billion		0	.685%
Next $2.5 billion		0	.67%
Next $2.5 billion		0	.655%
Over $10 billion		0	.64%

  Under the terms of a master sub-advisory agreement approved by shareholders of the Funds between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Trimark Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Funds, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide discretionary investment management services to each Fund based on the percentage of assets allocated to such Sub-Adviser(s).

  On December 31, 2009, Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc., Invesco Private Asset Management, Inc. and Invesco Global Asset Management (N.A.), Inc. merged into Invesco Institutional (N.A.), Inc. and the consolidated adviser firm was renamed Invesco Advisers, Inc.

  The Adviser has contractually agreed to waive advisory fees and/or reimburse expenses of all shares to the extent necessary to limit total annual fund operating expenses after fee waiver (excluding certain items discussed below) of Series I shares to 1.15% and Series II shares to 1.40% of average daily net assets, through at least April 30, 2011. In determining the Adviser’s obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the total annual fund operating expenses after fee waiver to exceed the numbers reflected above: (1) interest; (2) taxes; (3) dividend expense on short sales; (4) extraordinary items or non-routine items; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. The Board of Trustees or Invesco may terminate the fee waiver arrangement at any time. The Adviser did not waive fees and/or reimburse expenses during the period under this expense limitation.

AIM V.I. Small Cap Equity Fund

  Further, the Adviser has contractually agreed, through at least June 30, 2010, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash (excluding investments of cash collateral from securities lending) in such affiliated money market funds.

  For the year ended December 31, 2009, the Adviser waived advisory fees of $4,276.

  At the request of the Trustees of the Trust, Invesco Ltd. agreed to reimburse expenses incurred by the Fund in connection with market timing matters in the AIM Funds, which may include legal, audit, shareholder reporting, communications and trustee expenses. For the year ended December 31, 2009, Invesco Ltd. did not reimburse any expenses.

  The Trust has entered into a master administrative services agreement with Invesco pursuant to which the Fund has agreed to pay Invesco a fee for costs incurred in providing accounting services and fund administrative services to the Fund and to reimburse Invesco for administrative services fees paid to insurance companies that have agreed to provide services to the participants of separate accounts. These administrative services provided by the insurance companies may include, among other things: the printing of prospectuses, financial reports and proxy statements and the delivery of the same to existing participants; the maintenance of master accounts; the facilitation of purchases and redemptions requested by the participants; and the servicing of participants’ accounts. Pursuant to such agreement, for the year ended December 31, 2009, Invesco was paid $50,000 for accounting and fund administrative services and reimbursed $418,254 for services provided by insurance companies.

  The Trust has entered into a transfer agency and service agreement with Invesco Aim Investment Services, Inc. (“IAIS”) pursuant to which the Fund has agreed to pay IAIS a fee for providing transfer agency and shareholder services to the Fund and reimburse IAIS for certain expenses incurred by IAIS in the course of providing such services. For the year ended December 31, 2009, expenses incurred under the agreement are shown in the Statement of Operations as transfer agent fees.

  The Trust has entered into a master distribution agreement with Invesco Aim Distributors, Inc. (“IADI”) to serve as the distributor for the Fund. The Trust has adopted a plan pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund’s Series II shares (the “Plan”). The Fund, pursuant to the Plan, pays IADI compensation at the annual rate of 0.25% of the Fund’s average daily net assets of Series II shares. Of the Plan payments, up to 0.25% of the average daily net assets of the Series II shares may be paid to insurance companies who furnish continuing personal shareholder services to customers who purchase and own Series II shares of the Fund. For the year ended December 31, 2009, expenses incurred under the Plan are detailed in the Statement of Operations as distribution fees.

  Certain officers and trustees of the Trust are officers and directors of Invesco, IAIS and/or IADI.

NOTE 3—Additional Valuation Information

Generally Accepted Accounting Principles (“GAAP”) defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3) generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment’s assigned level:

Level 1 —	Prices are determined using quoted prices in an active market for identical assets.
Level 2 —	Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk and others.
Level 3 —	Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information.

  The following is a summary of the tiered valuation input levels, as of December 31, 2009. The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.

	Level 1		Level 2		Level 3		Total
Equity Securities	$	198,059,601	$	—	$	—	$	198,059,601

NOTE 4—Security Transactions with Affiliated Funds

The Fund is permitted to purchase or sell securities from or to certain other AIM Funds under specified conditions outlined in procedures adopted by the Board of Trustees of the Trust. The procedures have been designed to ensure that any purchase or sale of securities by the Fund from or to another fund or portfolio that is or could be considered an affiliate by virtue of having a common investment adviser (or affiliated investment advisers), common Trustees and/or common officers complies with Rule 17a-7 of the 1940 Act. Further, as defined under the procedures, each transaction is effected at the current market price. Pursuant to these procedures, for the year ended December 31, 2009, the Fund engaged in securities sales of $302,756, which resulted in net realized gains of $34,634.

AIM V.I. Small Cap Equity Fund

NOTE 5—Trustees’ and Officers’ Fees and Benefits

“Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and “Trustees’ and Officers’ Fees and Benefits” also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various AIM Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees are eligible to participate in a retirement plan that provides for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former Trustees who also participate in a retirement plan and receive benefits under such plan. “Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund.

  During the year ended December 31, 2009, the Fund paid legal fees of $3,146 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A member of that firm is a Trustee of the Trust.

NOTE 6—Cash Balances

The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with The State Street Bank and Trust Company, the custodian bank. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (i) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (ii) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.

NOTE 7—Distributions to Shareholders and Tax Components of Net Assets

Tax Character of Distributions to Shareholders Paid During the Years Ended December 31, 2009 and 2008:

	2009		2008
Ordinary income	$	293,939	$	566,079
Long-term capital gain		—		115,436
Total distributions	$	293,939	$	681,515

Tax Components of Net Assets at Period-End:

	2009
Net unrealized appreciation — investments	$	11,137,672
Temporary book/tax differences		(24,065	)
Post-October deferrals		(556,059	)
Capital loss carryforward		(34,954,382	)
Shares of beneficial interest		217,393,534
Total net assets	$	192,996,700

  The difference between book-basis and tax-basis unrealized appreciation (depreciation) is due to differences in the timing of recognition of gains and losses on investments for tax and book purposes. The Fund’s net unrealized appreciation difference is attributable primarily to wash sales.

  The temporary book/tax differences are a result of timing differences between book and tax recognition of income and/or expenses. The Fund’s temporary book/tax differences are the result of the trustee deferral of compensation and retirement plan benefits.

  Capital loss carryforward is calculated and reported as of a specific date. Results of transactions and other activity after that date may affect the amount of capital loss carryforward actually available for the Fund to utilize. The ability to utilize capital loss carryforward in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.

  The Fund has a capital loss carryforward as of December 31, 2009 which expires as follows:

	Capital Loss
Expiration	Carryforward*
December 31, 2016	$	12,193,641
December 31, 2017		22,760,741
Total capital loss carryforward	$	34,954,382

*  Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code.

AIM V.I. Small Cap Equity Fund

NOTE 8—Investment Securities

The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the year ended December 31, 2009 was $77,495,950 and $74,987,312, respectively. Cost of investments on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed Federal income tax reporting period-end.

Unrealized Appreciation (Depreciation) of Investment Securities on a Tax Basis
Aggregate unrealized appreciation of investment securities	$	27,566,446
Aggregate unrealized (depreciation) of investment securities		(16,428,774	)
Net unrealized appreciation of investment securities	$	11,137,672
Cost of investments for tax purposes is $186,921,929.

NOTE 9—Reclassification of Permanent Differences

Primarily as a result of differing book/tax treatment of net operating losses, on December 31, 2009, undistributed net investment income (loss) was increased by $48,508 and shares of beneficial interest decreased by $48,508. This reclassification had no effect on the net assets of the Fund.

NOTE 10—Share Information

	Summary of Share Activity
	Year ended December 31,
	2009(a)						2008
	Shares			Amount			Shares			Amount
Sold:
Series I		3,683,269		$	39,156,749			7,106,974		$	99,325,405
Series II		780,951			8,298,387			581,209			7,454,266
Issued as reinvestment of dividends:
Series I		22,558			278,362			64,391			660,008
Series II		1,279			15,577			2,121			21,507
Reacquired:
Series I		(4,128,279	)		(43,905,108	)		(3,672,675	)		(46,562,183	)
Series II		(204,276	)		(2,080,514	)		(56,485	)		(637,875	)
Net increase in share activity		155,502		$	1,763,453			4,025,535		$	60,261,128

^(a) There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 82% of the outstanding shares of the Fund. The Fund and the Fund’s principal underwriter or adviser, are parties to participation agreements with these entities whereby these entities sell units of interest in separate accounts funding variable products that are invested in the Fund. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as, securities brokerage, third party record keeping and account servicing and administrative services. The Trust has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially.

AIM V.I. Small Cap Equity Fund

NOTE 11—Financial Highlights

The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.

																												Ratio of			Ratio of
																												expenses			expenses
						Net gains																						to average			to average net			Ratio of net
	Net asset		Net			(losses) on						Dividends			Distributions													net assets			assets without			investment
	value,		investment			securities (both			Total from			from net			from net						Net asset					Net assets,		with fee waivers			fee waivers			income (loss)
	beginning		income			realized and			investment			investment			realized			Total			value, end		Total			end of period		and/or expenses			and/or expenses			to average			Portfolio
	of period		(loss)(a)			unrealized)			operations			income			gains			Distributions			of period		Return(b)			(000s omitted)		absorbed			absorbed			net assets			turnover(c)
Series I
Year ended 12/31/09	$	10.62	$	(0.00	)	$	2.26		$	2.26		$	(0.02	)	$	—		$	(0.02	)	$	12.86		21.29	%	$	178,949		1.09	%(d)		1.09	%(d)		(0.01	)%(d)		46	%
Year ended 12/31/08		15.53		0.02			(4.88	)		(4.86	)		—			(0.05	)		(0.05	)		10.62		(31.31	)		152,310		1.09			1.09			0.16			55
Year ended 12/31/07		15.19		(0.01	)		0.81			0.80			(0.01	)		(0.45	)		(0.46	)		15.53		5.19			168,286		1.12			1.15			(0.07	)		45
Year ended 12/31/06		13.46		(0.01	)		2.37			2.36			—			(0.63	)		(0.63	)		15.19		17.44			93,243		1.15			1.33			(0.06	)		52
Year ended 12/31/05		12.45		(0.06	)		1.07			1.01			—			—			—			13.46		8.11			42,752		1.22			1.57			(0.44	)		70
Series II
Year ended 12/31/09		10.51		(0.03	)		2.23			2.20			(0.02	)		—			(0.02	)		12.69		20.90			14,048		1.34	(d)		1.34	(d)		(0.26	)(d)		46
Year ended 12/31/08		15.39		0.00			(4.83	)		(4.83	)		—			(0.05	)		(0.05	)		10.51		(31.40	)		5,557		1.34			1.34			(0.09	)		55
Year ended 12/31/07		15.10		(0.05	)		0.79			0.74			—			(0.45	)		(0.45	)		15.39		4.84			32		1.37			1.40			(0.32	)		45
Year ended 12/31/06		13.41		(0.04	)		2.36			2.32			—			(0.63	)		(0.63	)		15.10		17.20			854		1.40			1.58			(0.31	)		52
Year ended 12/31/05		12.43		(0.08	)		1.06			0.98			—			—			—			13.41		7.88			679		1.42			1.82			(0.64	)		70

(a)	Calculated using average shares outstanding.
(b)	Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Total returns do not reflect charges assessed in connection with a variable product, which if included would reduce total returns.
(c)	Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable. For the period ending December 31, 2007, the portfolio turnover calculation excludes the value of securities purchased of $17,709,035 and sold of $19,432,514 in the effort to realign the Fund’s portfolio holdings after the reorganization of AIM V.I. Small Cap Growth Fund into the Fund
(d)	Ratios are based on average daily net assets (000’s omitted) of $158,191 and $9,244 for Series I and Series II shares, respectively.

AIM V.I. Small Cap Equity Fund

Report of Independent Registered Public Accounting Firm

To the Board of Trustees of AIM Variable Insurance Funds

and Shareholders of AIM V.I. Small Cap Equity Fund:

In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of AIM V.I. Small Cap Equity Fund, (one of the funds constituting AIM Variable Insurance Funds, hereafter referred to as the “Fund”) at December 31, 2009, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at December 31, 2009 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.

PRICEWATERHOUSECOOPERS LLP

February 10, 2010

Houston, Texas

AIM V.I. Small Cap Equity Fund

Calculating your ongoing Fund expenses

Example

As a shareholder of the Fund, you incur ongoing costs, including management fees; distribution and/or service fees (12b-1); and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period July 1, 2009 through December 31, 2009.

  The actual and hypothetical expenses in the examples below do not represent the effect of any fees or other expenses assessed in connection with a variable product; if they did, the expenses shown would be higher while the ending account values shown would be lower.

Actual expenses

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

Hypothetical example for comparison purposes

The table below also provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return.

  The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

  Please note that the expenses shown in the table are meant to highlight your ongoing costs. Therefore, the hypothetical information is useful in comparing ongoing costs, and will not help you determine the relative total costs of owning different funds.

							HYPOTHETICAL
							(5% annual return before
			ACTUAL				expenses)
	Beginning		Ending		Expenses		Ending		Expenses		Annualized
	Account Value		Account Value		Paid During		Account Value		Paid During		Expense
Class	(07/01/09)		(12/31/09)1		Period2		(12/31/09)		Period2		Ratio
Series I	$	1,000.00	$	1,167.80	$	5.96	$	1,019.71	$	5.55		1.09	%
Series II		1,000.00		1,165.70		7.31		1,018.45		6.82		1.34

1	The actual ending account value is based on the actual total return of the Fund for the period July 1, 2009 through December 31, 2009, after actual expenses and will differ from the hypothetical ending account value which is based on the Fund’s expense ratio and a hypothetical annual return of 5% before expenses.
2	Expenses are equal to the Fund’s annualized expense ratio as indicated above multiplied by the average account value over the period, multiplied by 184/365 to reflect the most recent fiscal half year.

AIM V.I. Small Cap Equity Fund

Tax Information

Form 1099-DIV, Form 1042-S and other year-end tax information provide shareholders with actual calendar year amounts that should be included in their tax returns. Shareholders should consult their tax advisors.

  The following distribution information is being provided as required by the Internal Revenue Code or to meet a specific state’s requirement.

  The Fund designates the following amounts or, if subsequently determined to be different, the maximum amount allowable for its fiscal year ended December 31, 2009:

Federal and State Income Tax
Corporate Dividends Received Deduction*	98.52%

*  The above percentage is based on ordinary income dividends paid to shareholders during the Fund’s fiscal year.

AIM V.I. Small Cap Equity Fund

Trustees and Officers

The address of each trustee and officer of AIM Variable Insurance Funds (the “Trust”), is 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173. Each trustee oversees 105 portfolios in the AIM Funds complex. The trustees serve for the life of the Trust, subject to their earlier death, incapacitation, resignation, retirement or removal as more specifically provided in the Trust’s organizational documents. Each officer serves for a one year term or until their successors are elected and qualified. Column two below includes length of time served with predecessor entities, if any.

Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Other Directorship(s)
Position(s) Held with the Trust	or Officer	During Past 5 Years	Held by Trustee
	Since
Interested Persons
Martin L. Flanagan1 — 1960 Trustee	2007	Executive Director, Chief Executive Officer and President, Invesco Ltd. (ultimate parent of Invesco Aim and a global investment management firm); Adviser to the Board, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Trustee, The AIM Family of Funds®; Board of Governors, Investment Company Institute; and Member of Executive Board, SMU Cox School of Business	None
		Formerly: Chairman, Invesco Aim Advisors, Inc. (registered investment adviser); Director, Chairman, Chief Executive Officer and President, IVZ Inc. (holding company), INVESCO Group Services, Inc. (service provider) and Invesco North American Holdings, Inc. (holding company); Director, Chief Executive Officer and President, Invesco Holding Company Limited (parent of Invesco Aim and a global investment management firm); Director, Invesco Ltd.; Chairman and Vice Chairman, Investment Company Institute
Philip A. Taylor2 — 1954 Trustee, President and Principal Executive Officer	2006	Head of North American Retail and Senior Managing Director, Invesco Ltd.; Director, Co-Chairman, Co-President and Co- Chief Executive Officer, Invesco Advisers, inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Director, Chief Executive Officer and President, Invesco Aim Advisors, Inc. and 1371 Preferred Inc. (holding company); Director, Chairman, Chief Executive Officer and President, Invesco Aim Management Group, Inc. (financial services holding company); Director, Co-Chairman, Co-President and Co-Chief Executive Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Director and President, INVESCO Funds Group, Inc. (registered investment adviser and registered transfer agent) and AIM GP Canada Inc. (general partner for limited partnerships); Director, Invesco Aim Distributors, Inc. (registered broker dealer); Director and Chairman, Invesco Aim Investment Services, Inc. (registered transfer agent) and INVESCO Distributors, Inc. (registered broker dealer); Director, President and Chairman, INVESCO Inc. (holding company) and Invesco Canada Holdings Inc. (holding company); Chief Executive Officer, AIM Trimark Corporate Class Inc. (corporate mutual fund company) and AIM Trimark Canada Fund Inc. (corporate mutual fund company); Director and Chief Executive Officer, Invesco Trimark Ltd./Invesco Trimark Ltèe (registered investment adviser and registered transfer agent) and Invesco Trimark Dealer Inc. (registered broker dealer); Trustee, President and Principal Executive Officer, The AIM Family of Funds® (other than AIM Treasurer’s Series Trust and Short-Term Investments Trust); Trustee and Executive Vice President, The AIM Family of Funds® (AIM Treasurer’s Series Trust and Short-Term Investments Trust only); and Manager, Invesco PowerShares Capital Management LLC	None
		Formerly: Manager, Invesco PowerShares Capital Management LLC; Director, Chief Executive Officer and President, Invesco Aim Advisors, Inc.; Director, Chairman, Chief Executive Officer and President, Invesco Aim Capital Management, Inc.; President, Invesco Trimark Dealer Inc. and Invesco Trimark Ltd./Invesco Trimark Ltèe; Director and President, AIM Trimark Corporate Class Inc. and AIM Trimark Canada Fund Inc.; Senior Managing Director, Invesco Holding Company Limited; Trustee and Executive Vice President, Tax-Free Investments Trust; Director and Chairman, Fund Management Company (former registered broker dealer); President and Principal Executive Officer, The AIM Family of Funds® (AIM Treasurer’s Series Trust, Short-Term Investments Trust and Tax-Free Investments Trust only); President, AIM Trimark Global Fund Inc. and AIM Trimark Canada Fund Inc.
Independent Trustees
Bruce L. Crockett — 1944 Trustee and Chair	1993	Chairman, Crockett Technology Associates (technology consulting company)	ACE Limited (insurance company); Captaris, Inc. (unified messaging provider); and Investment Company Institute
Bob R. Baker — 1936 Trustee	2004	Retired	None
Frank S. Bayley — 1939 Trustee	2001	Retired Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios)	None
James T. Bunch — 1942 Trustee	2004	Founder, Green, Manning & Bunch Ltd., (investment banking firm)	Board of Governors, Western Golf Association/Evans
			Scholars Foundation and Executive Committee, United States Golf Association
Albert R. Dowden — 1941 Trustee	2000	Director of a number of public and private business corporations, including the Boss Group, Ltd. (private investment and management); Reich & Tang Funds (registered investment company); and Homeowners of America Holding Corporation/Homeowners of America Insurance Company (property casualty company)	Board of Nature’s Sunshine Products, Inc.
		Formerly: Director, Continental Energy Services, LLC (oil and gas pipeline service); Director, CompuDyne Corporation (provider of product and services to the public security market) and Director, Annuity and Life Re (Holdings), Ltd. (reinsurance company); Director, President and Chief Executive Officer, Volvo Group North America, Inc.; Senior Vice President, AB Volvo; Director of various public and private corporations
Jack M. Fields — 1952 Trustee	1997	Chief Executive Officer, Twenty First Century Group, Inc. (government affairs company); and Owner and Chief Executive Officer, Dos Angelos Ranch, L.P. (cattle, hunting, corporate entertainment), Discovery Global Education Fund (non-profit) and Cross Timbers Quail Research Ranch (non-profit)	Administaff
		Formerly: Chief Executive Officer, Texana Timber LP (sustainable forestry company)
Carl Frischling — 1937 Trustee	1993	Partner, law firm of Kramer Levin Naftalis and Frankel LLP	Director, Reich & Tang Funds (16 portfolios)
Prema Mathai-Davis — 1950 Trustee	1998	Retired	None
Lewis F. Pennock — 1942 Trustee	1993	Partner, law firm of Pennock & Cooper	None
Larry Soll — 1942 Trustee	2004	Retired	None
Raymond Stickel, Jr. — 1944 Trustee	2005	Retired Formerly: Director, Mainstay VP Series Funds, Inc. (25 portfolios)	None

1	Mr. Flanagan is considered an interested person of the Trust because he is an officer of the adviser to the Trust, and an officer and a director of Invesco Ltd., ultimate parent of the adviser to the Trust.
2	Mr. Taylor is considered an interested person of the Trust because he is an officer and a director of the adviser to, and a director of the principal underwriter of, the Trust.

T-1

Trustees and Officers – (continued)

Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Other Directorship(s)
Position(s) Held with the Trust	or Officer	During Past 5 Years	Held by Trustee
	Since
Other Officers
Russell C. Burk — 1958 Senior Vice President and Senior Officer	2005	Senior Vice President and Senior Officer of The AIM Family of Funds®	N/A
John M. Zerr — 1962 Senior Vice President, Chief Legal Officer and Secretary	2006	Director, Senior Vice President, Secretary and General Counsel, Invesco Aim Management Group, Inc., Senior Vice President, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Director, Senior Vice President and Secretary, Invesco Aim Distributors, Inc.; Director, Vice President and Secretary, Invesco Aim Investment Services, Inc. and INVESCO Distributors, Inc.; Director and Vice President, INVESCO Funds Group, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The AIM Family of Funds®; and Manager, Invesco PowerShares Capital Management LLC	N/A
		Formerly: Director, Senior Vice President, General Counsel and Secretary, Invesco Aim Advisors, Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco Aim Capital Management, Inc.; Chief Operating Officer and General Counsel, Liberty Ridge Capital, Inc. (an investment adviser); Vice President and Secretary, PBHG Funds (an investment company) and PBHG Insurance Series Fund (an investment company); Chief Operating Officer, General Counsel and Secretary, Old Mutual Investment Partners (a broker-dealer); General Counsel and Secretary, Old Mutual Fund Services (an administrator) and Old Mutual Shareholder Services (a shareholder servicing center); Executive Vice President, General Counsel and Secretary, Old Mutual Capital, Inc. (an investment adviser); and Vice President and Secretary, Old Mutual Advisors Funds (an investment company)
Lisa O. Brinkley — 1959 Vice President	2004	Global Compliance Director, Invesco Ltd.; Chief Compliance Officer, Invesco Aim Distributors, Inc. and Invesco Aim Investment Services, Inc.; and Vice President, The AIM Family of Funds® Formerly: Senior Vice President, Invesco Aim Management Group, Inc.; Senior Vice President and Chief Compliance Officer, Invesco Aim Advisors, Inc. and The AIM Family of Funds®; Vice President and Chief Compliance Officer, Invesco Aim Capital Management, Inc. and Invesco Aim Distributors, Inc.; Vice President, Invesco Aim Investment Services, Inc. and Fund Management Company	N/A
Kevin M. Carome — 1956 Vice President	2003	General Counsel, Secretary and Senior Managing Director, Invesco Ltd.; Director, Invesco Holding Company Limited and INVESCO Funds Group, Inc.; Director and Executive Vice President, IVZ, Inc., Invesco Group Services, Inc., Invesco North American Holdings, Inc. and Invesco Investments (Bermuda) Ltd.; Director and Secretary, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); and Vice President, The AIM Family of Funds®	N/A
		Formerly: Senior Managing Director and Secretary, Invesco North American Holdings, Inc.; Vice President and Secretary, IVZ, Inc. and Invesco Group Services, Inc.; Senior Managing Director and Secretary, Invesco Holding Company Limited; Director, Senior Vice President, Secretary and General Counsel, Invesco Aim Management Group, Inc. and Invesco Aim Advisors, Inc.; Senior Vice President, Invesco Aim Distributors, Inc.; Director, General Counsel and Vice President, Fund Management Company; Vice President, Invesco Aim Capital Management, Inc. and Invesco Aim Investment Services, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The AIM Family of Funds®; Director and Vice President, INVESCO Distributors, Inc.; and Chief Executive Officer and President, INVESCO Funds Group, Inc.
Sheri Morris — 1964 Vice President, Treasurer and Principal Financial Officer	1999	Vice President, Treasurer and Principal Financial Officer, The AIM Family of Funds®; and Vice President, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.) Formerly: Vice President, Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.; Assistant Vice President and Assistant Treasurer, The AIM Family of Funds® and Assistant Vice President, Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A
Karen Dunn Kelley — 1960 Vice President	1993	Head of Invesco’s World Wide Fixed Income and Cash Management Group; Senior Vice President, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Executive Vice President, Invesco Aim Distributors, Inc.; Senior Vice President, Invesco Aim Management Group, Inc.; and Director, Invesco Mortgage Capital Inc.; Vice President, The AIM Family of Funds® (other than AIM Treasurer’s Series Trust and Short-Term Investments Trust); and President and Principal Executive Officer, The AIM Family of Funds® (AIM Treasurer’s Series Trust and Short-Term Investments Trust only) Formerly: Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Director of Cash Management and Senior Vice President, Invesco Aim Advisors, Inc. and Invesco Aim Capital Management, Inc.; President and Principal Executive Officer, Tax-Free Investments Trust; Director and President, Fund Management Company; Chief Cash Management Officer, Director of Cash Management, Senior Vice President, and Managing Director, Invesco Aim Capital Management, Inc.; Director of Cash Management, Senior Vice President, and Vice President, Invesco Aim Advisors, Inc. and The AIM Family of Funds® (AIM Treasurer’s Series Trust, Short-Term Investments Trust and Tax-Free Investments Trust only)	N/A
Lance A. Rejsek — 1967 Anti-Money Laundering Compliance Officer	2005	Anti-Money Laundering Compliance Officer, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Invesco Aim Distributors, Inc., Invesco Aim Investment Services, Inc., and The AIM Family of Funds®	N/A
		Formerly: Anti-Money Laundering Compliance Officer, Fund Management Company, Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.
Todd L. Spillane — 1958 Chief Compliance Officer	2006	Senior Vice President, Invesco Aim Management Group, Inc.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Chief Compliance Officer, The AIM Family of Funds®, INVESCO Private Capital Investments, Inc. (holding company), Invesco Private Capital, Inc. (registered investment adviser) and Invesco Senior Secured Management, Inc. (registered investment adviser); Vice President, Invesco Aim Distributors, Inc. and Invesco Aim Investment Services, Inc.	N/A
		Formerly: Senior Vice President and Chief Compliance Officer, Invesco Aim Advisors, Inc. and Invesco Aim Capital Management, Inc.; Chief Compliance Officer, Invesco Global Asset Management (N.A.), Inc.; Vice President, Invesco Aim Capital Management, Inc. and Fund Management Company

The Statement of Additional Information of the Trust includes additional information about the Fund’s Trustees and is available upon request, without charge, by calling 1.800.959.4246. Please refer to the Fund’s prospectus for information on the Fund’s sub-advisers.

Office of the Fund	Investment Adviser	Distributor	Auditors
11 Greenway Plaza, Suite 100	Invesco Advisers, Inc.	Invesco Aim Distributors, Inc.	PricewaterhouseCoopers LLP
Houston, TX 77046-1173	1555 Peachtree Street, N.E.	11 Greenway Plaza, Suite 100	1201 Louisiana Street, Suite 2900
	Atlanta, GA 30309	Houston, TX 77046-1173	Houston, TX 77002-5678
Counsel to the Fund	Counsel to the	Transfer Agent	Custodian
Stradley Ronon Stevens & Young, LLP	Independent Trustees	Invesco Aim Investment Services, Inc.	State Street Bank and Trust Company
2600 One Commerce Square	Kramer, Levin, Naftalis & Frankel LLP	P.O. Box 4739	225 Franklin
Philadelphia, PA 19103	1177 Avenue of the Americas	Houston, TX 77210-4739	Boston, MA 02110-2801
	New York, NY 10036-2714

T-2

AIM V.I. Technology Fund
Annual Report to Shareholders n December 31, 2009

The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter-ends. For the second and fourth quarters, the lists appear in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The Fund’s Form N-Q filings are available on the SEC website, sec.gov. Copies of the Fund’s Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers for the Fund are 811-07452 and 033-57340. The Fund’s most recent portfolio holdings, as filed on Form N-Q, have also been made available to insurance companies issuing variable annuity contracts and variable life insurance policies (“variable products”) that invest in the Fund.

A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, from our Client Services department at 800 410 4246 or on the Invesco Aim website, invescoaim.com. On the home page, scroll down and click on Proxy Policy. The information is also available on the SEC website, sec.gov.

Information regarding how the Fund voted proxies related to its portfolio securities during the 12 months ended June 30, 2009, is available at our website, invescoaim.com. Click the About Us tab at the top of the home page; click Legal Information; and then click Proxy Voting Search. The information is also available on the SEC website, sec.gov.

Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Aim Distributors, Inc. is the U.S. distributor for Invesco Ltd.’s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd.

This report must be accompanied or preceded by a currently effective Fund prospectus and variable product prospectus, which contain more complete information, including sales charges and expenses. Investors should read each carefully before investing.

Invesco Aim Distributors, Inc.

NOT FDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEE

Management’s Discussion of Fund Performance

Performance summary

The year was characterized by two dramatically different market environments. In early 2009, equity markets declined steeply as credit markets froze and risk premiums rose dramatically in response to the global recession. As central banks coordinated easing efforts and companies cut costs aggressively, access to funding improved and market valuations in both the credit and equity markets recovered from their March lows.

     The information technology (IT) sector enjoyed a banner year with significant double-digit gains — well ahead of other market sectors. As a result, AIM V.I. Technology Fund, excluding variable product issuer charges, outperformed the broad market, as measured by the S&P 500 Index, for the year ended December 31, 2009. However, the Fund underperformed its style-specific index, the Merrill Lynch 100 Technology Index, as our quality-biased investment process was out of favor and stocks with low returns on invested capital appreciated most in 2009. Specifically, stock selection in the computer and peripherals industry, as well as stock selection and an overweight position in the software industry, negatively affected Fund performance relative to its style-specific index.

     Your Fund’s long-term performance appears later in this report.

Fund vs. Indexes

Total returns, 12/31/08 to 12/31/09, excluding variable product issuer charges.

If variable product issuer charges were included, returns would be lower.

Series I Shares	57.40	%
Series II Shares	57.14
S&P 500 Index6 (Broad Market Index)	26.47
BofA Merrill Lynch 100 Technology Index6 (Style-Specific Index)*	66.86
S&P North American Technology Sector Index6 (Former Style-Specific Index)*	63.19
Lipper VUF Science & Technology Funds Category Average6 (Peer Group)	57.34
6Lipper Inc.

* During the reporting period, the Fund elected to use the BofA Merrill Lynch 100 Technology Index as its style-specific index rather than the S&P North American Technology Sector Index because it more appropriately reflects the Fund’s investment style.

How we invest

We seek to grow capital by investing in companies we believe generate sustainable, superior earnings and cash flow growth that is not fully reflected in investor expectations or equity valuations. The Fund emphasizes companies believed to have a strategic advantage over their competition and operating in industries believed to be beneficiaries of secular trends. The Fund invests in industries such as hardware, software, telecommunications equipment and services, semiconductors and service-related companies in the IT sector. We use a research oriented bottom-up investment approach focusing on company fundamentals and growth prospects.

     We place great emphasis on companies exhibiting high returns on invested capital and generating free cash flow, metrics we believe are good indicators of financial health and growth potential. Also, we seek management teams that maintain high quality balance sheets and manageable debt levels. Valuation also plays a critical role in stock selection.

     Risk management is an integral part of our portfolio construction, as our target portfolio attempts to limit volatility and downside risk. Only stocks that represent a proper risk and reward profile are chosen for inclusion in the portfolio. We seek to accomplish this goal by thoroughly understanding the key business drivers of companies in which we invest. The portfolio is constructed with the goal of holding approximately 40-60 individual stocks we believe are best suited to capitalize on secular trends prevalent in the IT sector.

     We may reduce or eliminate a stock when:

§	A stock’s price reaches its valuation target.
§	A company’s fundamentals change or deteriorate.
§	It no longer meets our investment criteria.

Market conditions and your Fund

Though the beginning of the year was marked by headlines claiming economic “Armageddon,” the U.S. economy began to show signs that the contraction was moderating. Economic data indicated that the rampant decline in business spending and consumption that occurred in 2008 and early 2009 may have eased. Given signs that the economic downturn may be moderating, equity and credit markets improved. In addition, financial markets benefited from various government programs introduced to improve bank balance sheets and reduce credit spreads.

     A variety of emergency fiscal and monetary initiatives of governments and central banks appeared to have succeeded in averting a global economic collapse. However, high unemployment levels and the long-term implications of the sovereign debt burden for Western economies continued to cause concern. Additionally,

Portfolio Composition
By sector

Information Technology	93.3	%
Consumer Discretionary	1.3
Telecommunication Services	1.1
Financials	0.7
Money Market Funds Plus Other Assets Less Liabilities	3.6

Top 10 Equity Holdings*

1. Apple Inc.		5.2	%
2. Google Inc.-Class A		4.6
3. Hewlett-Packard Co.		3.9
4. Cognizant Technology Solutions Corp.- Class A		3.9
5. Microsoft Corp.		3.9
6. Intel Corp.		3.2
7. Check Point Software Technologies Ltd.		3.2
8. Marvell Technology Group Ltd.		3.1
9. QUALCOMM Inc.		2.6
10. EMC Corp.		2.4
Total Net Assets	$119.8 million
Total Number of Holdings*		61

The Fund’s holdings are subject to change, and there is no assurance that the Fund will continue to hold any particular security.

* Excluding money market fund holdings.

AIM V.I. Technology Fund

businesses and households still had a considerable way to go in reducing their debt levels.

     Against this backdrop, telecommunication services, utilities and energy were among the weakest performing sectors of the S&P 500 Index.¹ Conversely, IT, materials and consumer discretionary were the best performing sectors.¹

     On an absolute basis, holdings in the semiconductors and semiconductor equipment and the computer and peripherals industries made the greatest positive contribution to Fund performance during the year. In addition to a legacy private equity holding, the only other industries to detract from Fund performance were the media and diversified telecommunication services industries.

     Relative to the BofA Merrill Lynch 100 Technology Index, our security selection and overweight exposure to the IT services industry had the greatest positive effect on Fund performance. Additionally, our lack of office electronics and electrical equipment holdings benefited our benchmark-relative performance. On the other hand, stock selection in the computer and peripherals industry, as well as stock selection and an overweight position in the software industry, detracted from relative performance. Our cash weighting, although minor, also hurt benchmark-relative performance during the strong equity rally.

     Among specific holdings, Apple and Cognizant Technology Solutions were the top contributors to Fund performance during the year. In fact, Apple graced the Fund’s top contributors list each quarter in 2009. Besides recently announcing price cuts and new features for existing products, Apple also unveiled a new version of its iPhone, the 3GS, complete with new applications, an improved camera and faster downloading capabilities. Perhaps most significant is the lower price for the entry-level iPhone, not to mention the ever-growing application downloads, which highlight Apple’s efforts to expand market share.

     We believed Cognizant, a leading provider of software solutions with primary clients in North America and Europe, maintained a unique competitive advantage in the realm of global IT outsourcing. Although headquartered in New Jersey, Cognizant boasts regional sales and client relationship offices worldwide with an emphasis in operations in India. The firm recently beat Wall Street expectations through top-line growth, or revenue growth, with a tight control on expenses.

     On the negative side, Harris Corp. and Nokia, communications equipment companies, detracted from the Fund’s performance during the year. Investors worried that the Obama administration would cut defense spending, which would negatively affect Harris Corp. In addition to suffering slowing sales due to macroeconomic conditions, competition from Apple took more market share from Nokia than we anticipated. We eliminated Harris Corp. from the portfolio before the close of the year.

     In past commentaries we mentioned that conditions were favorable for the IT sector. We believed those trends continued to assert themselves, which led to IT outperforming the broad market during the reporting period. This fiscal year was similar as we saw continued signs of improvement in credit markets, stabilization of demand patterns and conditions for secular growth.

     Given that markets experienced a strong recovery during the year, we would like to caution investors against making investment decisions based on short-term performance. As always, we recommend that you consult a financial adviser to discuss your individual financial program. We thank you for your continued investment in AIM V.I. Technology Fund.

1 Lipper Inc.

The views and opinions expressed in management’s discussion of Fund performance are those of Invesco Advisers, Inc. These views and opinions are subject to change at any time based on factors such as market and economic conditions. These views and opinions may not be relied upon as investment advice or recommendations, or as 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 Invesco Advisers, Inc. 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.

See important Fund and index disclosures later in this report.

Warren Tennant

Chartered Financial Analyst, portfolio manager, is lead manager of AIM V.I. Technology Fund. Mr. Tennant joined Invesco Aim in 2000 and was named a portfolio manager in 2007 before becoming lead manager of the Fund in 2008. He earned both his B.B.A. in finance and his M.B.A. from The University of Texas at Austin.

Brian Nelson

Chartered Financial Analyst, portfolio manager, is manager of AIM V.I. Technology Fund. He began his investment career in 1995 and joined Invesco Aim in 2004. Mr. Nelson earned a B.A. from the University of California-Santa Barbara and is a member of the CFA Society of San Francisco.

Assisted by the Technology Team

AIM V.I. Technology Fund

Your Fund’s Long-Term Performance

Results of a $10,000 Investment — Oldest Share Class since Inception
Fund data from 5/20/97, index data from 5/31/97

Past performance cannot guarantee comparable future results.

     This chart, which is a logarithmic chart, presents the fluctuations in the value of the Fund and its indexes. We believe that a logarithmic chart is more effective than other types of charts in illustrating changes in value during the early years shown in the chart. The vertical axis, the one that indicates the dollar value of an investment, is constructed with each segment representing a percent change in the value of the investment. In this chart, each segment represents a doubling, or 100% change, in the value of the investment. In other words, the space between $5,000 and $10,000 is the same size as the space between $10,000 and $20,000, and so on.

Average Annual Total Returns
As of 12/31/09

Series I Shares
Inception (5/20/97)	2.29	%
10 Years	–9.81
5 Years	1.21
1 Year	57.40
Series II Shares
10 Years	–10.06	%
5 Years	0.95
1 Year	57.14

Series II shares’ inception date is April 30, 2004. Returns since that date are historical. All other returns are the blended returns of the historical performance of Series II shares since their inception and the restated historical performance of Series I shares (for periods prior to inception of Series II shares) adjusted to reflect the Rule 12b-1 fees applicable to Series II shares. The inception date of Series I shares is May 20, 1997. The performance of the Fund’s Series I and Series II share classes will differ primarily due to different class expenses.

     The performance data quoted represent past performance and cannot guarantee comparable future results; current performance may be lower or higher. Please contact your variable product issuer or financial adviser for the most recent month-end variable product performance. Performance figures reflect Fund expenses, reinvested distributions and changes in net asset value. Investment return and principal value will fluctuate so that you may have a gain or loss when you sell shares.

     The net annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 1.16% and 1.41%, respectively.¹ The total annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 1.17% and 1.42%, respectively. The expense ratios presented above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

     AIM V.I. Technology Fund, a series portfolio of AIM Variable Insurance Funds, is currently offered through insurance companies issuing variable products. You cannot purchase shares of the Fund directly. Performance figures given represent the Fund and are not intended to reflect actual variable product values. They do not reflect sales charges, expenses and fees assessed in connection with a variable product. Sales charges, expenses and fees, which are determined by the variable product issuers, will vary and will lower the total return.

     The most recent month-end performance data at the Fund level, excluding variable product charges, is available on the Invesco Aim automated information line, 866 702 4402. As mentioned above, for the most recent month-end performance including variable product charges, please contact your variable product issuer or financial adviser.

1 Total annual operating expenses less any contractual fee waivers and/or expense reimbursements by the adviser in effect through at least June 30, 2010. See current prospectus for more information.

AIM V.I. Technology Fund

AIM V.I. Technology Fund’s investment objective is capital growth.

§	Unless otherwise stated, information presented in this report is as of December 31, 2009, and is based on total net assets.
§	Unless otherwise noted, all data provided by Invesco.

Principal risks of investing in the Fund

Prices of equity securities change in response to many factors, including the historical and prospective earnings of the issuer, the value of its assets, general economic conditions, interest rates, investor perceptions and market liquidity.

     Foreign securities have additional risks, including exchange rate changes, political and economic upheaval, relative lack of information, relatively low market liquidity, and the potential lack of strict financial and accounting controls and standards.

     Since a large percentage of the Fund’s assets may be invested in securities of a limited number of companies, each investment has a greater effect on the Fund’s overall performance, and any change in the value of those securities could significantly affect the value of your investment in the Fund.

     There is no guarantee that the investment techniques and risk analysis used by the Fund’s portfolio managers will produce the desired results.

     The prices of securities held by the Fund may decline in response to market risks.

     The Fund’s investments are concentrated in a comparatively narrow segment of the economy. Consequently, the Fund may tend to be more volatile than other mutual funds, and the value of the Fund’s investments may tend to rise and fall more rapidly.

     Many of the products and services offered in technology-related industries are subject to rapid obsolescence, which may lower the value of securities of companies in this sector.

     The prices of initial public offering (IPO) securities may go up and down more than prices of equity securities of companies with longer trading histories. In addition, companies offering securities in IPOs may have less experienced management or limited operating histories. There can be no assurance that the fund will have favorable IPO investment opportunities.

About indexes used in this report

The S&P 500^® Index is an unmanaged index considered representative of the U.S. stock market.

     The BofA Merrill Lynch 100 Technology Index is a price-only equal-dollar weighted index of 100 stocks designed to measure the performance of a cross section of large, actively traded technology stocks and American Depositary Receipts.

     The S&P North American Technology Sector Index is a capitalization-weighted index considered representative of the technology industry.

     The Lipper VUF Science & Technology Funds Category Average represents an average of all of the variable insurance underlying funds in the Lipper Science & Technology Funds category.

     The Fund is not managed to track the performance of any particular index, including the indexes defined here, and consequently, the performance of the Fund may deviate significantly from the performance of the indexes.

     A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group reflects fund expenses; performance of a market index does not.

Other information

The Chartered Financial Analyst^® (CFA^®) designation is globally recognized and attests to a charterholder’s success in a rigorous and comprehensive study program in the field of investment management and research analysis.

     The returns shown in management’s discussion of Fund performance are based on net asset values calculated for shareholder transactions. Generally accepted accounting principles require adjustments to be made to the net assets of the Fund at period end for financial reporting purposes, and as such, the net asset values for shareholder transactions and the returns based on those net asset values may differ from the net asset values and returns reported in the Financial Highlights. Additionally, the returns and net asset values shown throughout this report are at the Fund level only and do not include variable product issuer charges. If such charges were included, the total returns would be lower.

     Industry classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s.

AIM V.I. Technology Fund

Schedule of Investments^(a)

December 31, 2009

	Shares		Value
Common Stocks & Other Equity Interests–96.34%
Application Software–4.50%
Adobe Systems Inc.(b)		15,385	$	565,860
Autodesk, Inc.(b)		45,231		1,149,320
NICE Systems Ltd.–ADR (Israel)(b)		64,391		1,998,697
Shanda Games Ltd.–ADR (Cayman Islands)(b)(c)		57,865		589,644
Solera Holdings Inc.		30,140		1,085,342
				5,388,863
Communications Equipment–9.46%
Brocade Communications Systems, Inc.(b)		115,028		877,664
Cisco Systems, Inc.(b)		120,173		2,876,942
Nokia Corp.–ADR (Finland)		67,704		869,996
Plantronics, Inc.		42,456		1,103,007
Polycom, Inc.(b)		34,024		849,579
QUALCOMM Inc.		66,610		3,081,379
Research In Motion Ltd. (Canada)(b)		24,734		1,670,534
				11,329,101
Computer Hardware–11.25%
Apple Inc.(b)		29,587		6,238,715
Dell Inc.(b)		69,158		993,109
Hewlett-Packard Co.		90,153		4,643,781
International Business Machines Corp.		12,238		1,601,954
				13,477,559
Computer Storage & Peripherals–6.79%
EMC Corp.(b)		166,134		2,902,361
NetApp, Inc.(b)		24,768		851,772
QLogic Corp.(b)		71,875		1,356,281
Seagate Technology		79,906		1,453,490
Western Digital Corp.(b)		35,484		1,566,619
				8,130,523
Data Processing & Outsourced Services–5.33%
Alliance Data Systems Corp.(b)(c)		44,834		2,895,828
MasterCard, Inc.–Class A		5,444		1,393,555
VeriFone Holdings, Inc.(b)		62,067		1,016,658
Western Union Co. (The)		57,260		1,079,351
				6,385,392
Electronic Components–2.34%
Corning Inc.		84,311		1,628,045
Dolby Laboratories Inc.–Class A(b)		24,519		1,170,292
				2,798,337
Electronic Equipment & Instruments–0.68%
Cogent Inc.(b)		78,572		816,363
Electronic Manufacturing Services–3.97%
Flextronics International Ltd. (Singapore)(b)		318,373		2,327,306
Tyco Electronics Ltd. (Switzerland)		99,063		2,431,997
				4,759,303
Home Entertainment Software–0.46%
Nintendo Co., Ltd. (Japan)		2,300		545,428
Internet Retail–1.29%
Amazon.com, Inc.(b)		11,495		1,546,307
Internet Software & Services–7.11%
DivX, Inc.(b)		88,235		497,645
eBay Inc.(b)		45,500		1,071,070
Google Inc.–Class A(b)		8,927		5,534,562
VeriSign, Inc.(b)		23,788		576,621
Yahoo! Inc.(b)		49,973		838,547
				8,518,445
IT Consulting & Other Services–4.92%
Amdocs Ltd.(b)		44,071		1,257,346
Cognizant Technology Solutions Corp.–Class A(b)		102,322		4,635,186
				5,892,532
Other Diversified Financial Services–0.68%
BlueStream Ventures L.P. (Acquired 08/03/00-06/13/08; Cost $3,149,655)(d)(e)		—		808,731
Semiconductor Equipment–4.90%
Applied Materials, Inc.		136,270		1,899,604
ASML Holding N.V.–New York Shares (Netherlands)		66,591		2,270,087
Cymer, Inc.(b)		44,443		1,705,722
				5,875,413
Semiconductors–17.82%
Avago Technologies Ltd. (Singapore)(b)		99,281		1,815,850
Intel Corp.		188,998		3,855,559
Intersil Corp.–Class A		137,116		2,103,359
Marvell Technology Group Ltd.(b)		177,316		3,679,307
Microsemi Corp.(b)		126,482		2,245,056
ON Semiconductor Corp.(b)		226,582		1,996,187
Semtech Corp.(b)		73,731		1,254,164
Taiwan Semiconductor Manufacturing Co. Ltd.–ADR (Taiwan)		152,568		1,745,378

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

AIM V.I. Technology Fund

	Shares		Value
Semiconductors–(continued)
Texas Instruments Inc.		39,027	$	1,017,044
Xilinx, Inc.		65,169		1,633,135
				21,345,039
Systems Software–12.27%
Ariba Inc.(b)		138,846		1,738,352
Check Point Software Technologies Ltd. (Israel)(b)		112,268		3,803,640
Microsoft Corp.		148,828		4,537,766
Oracle Corp.		90,417		2,218,833
SonicWALL, Inc.(b)		156,125		1,188,111
Symantec Corp.(b)		67,878		1,214,337
				14,701,039
Technology Distributors–1.50%
Anixter International Inc.(b)		38,267		1,802,376
Wireless Telecommunication Services–1.07%
American Tower Corp.–Class A(b)		29,796		1,287,485
Total Common Stocks & Other Equity Interests (Cost $98,224,910)				115,408,236
Money Market Funds–3.45%
Liquid Assets Portfolio–Institutional Class(f)		2,064,600		2,064,600
Premier Portfolio–Institutional Class(f)		2,064,600		2,064,600
Total Money Market Funds (Cost $4,129,200)				4,129,200
TOTAL INVESTMENTS (excluding investments purchased with cash collateral from securities on loan)–99.79% (Cost $102,354,110)				119,537,436
Investments Purchased with Cash Collateral from Securities on Loan
Money Market Funds–2.25%
Liquid Assets Portfolio–Institutional Class (Cost $2,691,742)(f)(g)		2,691,742		2,691,742
TOTAL INVESTMENTS–102.04% (Cost $105,045,852)				122,229,178
OTHER ASSETS LESS LIABILITIES–(2.04)%				(2,444,142	)
NET ASSETS–100.00%			$	119,785,036

Investment Abbreviations:

ADR – American Depositary Receipt

Notes to Schedule of Investments:

(a)	Industry and/or sector classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s.
(b)	Non-income producing security.
(c)	All or a portion of this security was out on loan at December 31, 2009.
(d)	The Fund has a remaining commitment of $101,250 to purchase additional interests in BlueStream Ventures L.P., which is subject to the terms of the limited partnership agreement.
(e)	Security purchased or received in a transaction exempt from registration under the Securities Act of 1933, as amended. The security may be resold pursuant to an exemption from registration under the 1933 Act, typically to qualified institutional buyers. The value of this security at December 31, 2009 represented 0.68% of the Fund’s Net Assets.
(f)	The money market fund and the Fund are affiliated by having the same investment adviser.
(g)	The security has been segregated to satisfy the commitment to return the cash collateral received in securities lending transactions upon the borrower’s return of the securities loaned. See Note 1J.

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

AIM V.I. Technology Fund

Statement of Assets and Liabilities

December 31, 2009

Assets:
Investments, at value (Cost $98,224,910)*	$	115,408,236
Investments in affiliated money market funds, at value and cost		6,820,942
Total investments, at value (Cost $105,045,852)		122,229,178
Cash		197,923
Foreign currencies, at value (Cost $11,521)		11,282
Receivables for:
Investments sold		122,314
Fund shares sold		106,767
Dividends		42,589
Investment for trustee deferred compensation and retirement plans		26,876
Total assets		122,736,929
Liabilities:
Payables for:
Fund shares reacquired		116,875
Collateral upon return of securities loaned		2,691,742
Accrued fees to affiliates		72,143
Accrued other operating expenses		29,603
Trustee deferred compensation and retirement plans		41,530
Total liabilities		2,951,893
Net assets applicable to shares outstanding	$	119,785,036
Net assets consist of:
Shares of beneficial interest	$	148,683,154
Undistributed net investment income		1,797,307
Undistributed net realized gain (loss)		(47,878,511	)
Unrealized appreciation		17,183,086
	$	119,785,036
Net Assets:
Series I	$	119,368,524
Series II	$	416,512
Shares outstanding, $0.001 par value per share, unlimited number of shares authorized:
Series I		9,049,012
Series II		32,090
Series I:
Net asset value per share	$	13.19
Series II:
Net asset value per share	$	12.98

*  At December 31, 2009, securities with an aggregate value of $2,614,064 were on loan to brokers.

Statement of Operations

For the year ended December 31, 2009

Investment income:
Dividends (net of foreign withholding taxes of $19,361)	$	718,413
Dividends from affiliated money market funds (includes securities lending income of $101,399)		120,189
Total investment income		838,602
Expenses:
Advisory fees		686,790
Administrative services fees		275,564
Custodian fees		8,306
Distribution fees — Series II		486
Transfer agent fees		30,347
Trustees’ and officers’ fees and benefits		22,783
Other		65,585
Total expenses		1,089,861
Less: Fees waived		(5,103	)
Net expenses		1,084,758
Net investment income (loss)		(246,156	)
Realized and unrealized gain (loss) from:
Net realized gain (loss) from:
Investment securities		(7,586,580	)
Foreign currencies		(164,183	)
Futures contracts		41,488
		(7,709,275	)
Change in net unrealized appreciation of:
Investment securities		49,727,675
Foreign currencies		90,866
		49,818,541
Net realized and unrealized gain		42,109,266
Net increase in net assets resulting from operations	$	41,863,110

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

AIM V.I. Technology Fund

Statement of Changes in Net Assets

For the years ended December 31, 2009 and 2008

	2009			2008
Operations:
Net investment income (loss)	$	(246,156	)	$	60,765
Net realized gain (loss)		(7,709,275	)		(5,883,278	)
Change in net unrealized appreciation (depreciation)		49,818,541			(57,731,412	)
Net increase (decrease) in net assets resulting from operations		41,863,110			(63,553,925	)
Share transactions-net:
Series I		6,048,496			(23,694,566	)
Series II		212,164			41,258
Net increase (decrease) in net assets resulting from share transactions		6,260,660			(23,653,308	)
Net increase (decrease) in net assets		48,123,770			(87,207,233	)
Net assets:
Beginning of year		71,661,266			158,868,499
End of year (includes undistributed net investment income of $1,797,307 and $16,648, respectively)	$	119,785,036		$	71,661,266

Notes to Financial Statements

December 31, 2009

NOTE 1—Significant Accounting Policies

AIM V.I. Technology Fund (the “Fund”) is a series portfolio of AIM Variable Insurance Funds (the “Trust”). The Trust is a Delaware statutory trust registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end series management investment company consisting of twenty-one separate portfolios, (each constituting a “Fund”). The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Matters affecting each Fund or class will be voted on exclusively by the shareholders of such Fund or class. Current Securities and Exchange Commission (“SEC”) guidance, however, requires participating insurance companies offering separate accounts to vote shares proportionally in accordance with the instructions of the contract owners whose investments are funded by shares of each Fund or class.

  The Fund’s investment objective is capital growth.

  The Fund currently offers two classes of shares, Series I and Series II, both of which are offered to insurance company separate accounts funding variable annuity contracts and variable life insurance policies (“variable products”).

  The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements.

A.	Security Valuations — Securities, including restricted securities, are valued according to the following policy.
	A security listed or traded on an exchange (except convertible bonds) is valued at its last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales or official closing price on a particular day, the security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based on prices furnished by independent pricing services or market makers. When such securities are valued by an independent pricing service they may be considered fair valued. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean between the last bid and ask prices from the exchange on which they are principally traded. Options not listed on an exchange are valued by an independent source at the mean between the last bid and ask prices. For purposes of determining net asset value per share, futures and option contracts generally are valued 15 minutes after the close of the customary trading session of the New York Stock Exchange (“NYSE”).
	Investments in open-end and closed-end registered investment companies that do not trade on an exchange are valued at the end of day net asset value per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded.
	Debt obligations (including convertible bonds) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution-size trading in similar groups of securities, developments related to specific securities, dividend rate, yield, quality, type of issue, coupon rate, maturity, individual trading characteristics and other market data. Short-term obligations, including commercial paper, having 60 days or less to maturity are recorded at amortized cost which approximates value. Debt securities are subject to interest rate and credit risks. In addition, all debt securities involve some risk of default with respect to interest and/or principal payments.
	Foreign securities (including foreign exchange contracts) are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the NYSE. If market quotations are available and reliable for foreign exchange traded equity securities, the securities will be valued at the market

AIM V.I. Technology Fund

	quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that are significant and make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economical upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
	Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities and Corporate Loans. The mean between the last bid and asked prices may be used to value debt obligations other than Corporate Loans.
	Securities for which market quotations are not readily available or are unreliable are valued at fair value as determined in good faith by or under the supervision of the Trust’s officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a security’s fair value.
	Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
B.	Securities Transactions and Investment Income — Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income is recorded on the accrual basis from settlement date. Dividend income is recorded on the ex-dividend date. Bond premiums and discounts are amortized and/or accreted for financial reporting purposes.
	The Fund may periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain/loss for investments no longer held and as unrealized gain/loss for investments still held.
	Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the realized and unrealized net gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the Fund’s net asset value and, accordingly, they reduce the Fund’s total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in the Statement of Operations and Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the adviser.
	The Fund allocates income and realized and unrealized capital gains and losses to a class based on the relative net assets of each class.
C.	Country Determination — For the purposes of making investment selection decisions and presentation in the Schedule of Investments, the investment adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuer’s securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted.
D.	Distributions — Distributions from income and net realized capital gain, if any, are generally paid to separate accounts of participating insurance companies annually and recorded on ex-dividend date.
E.	Federal Income Taxes — The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code necessary to qualify as a regulated investment company and to distribute substantially all of the Fund’s taxable earnings to shareholders. As such, the Fund will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements.
	The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.
F.	Expenses — Fees provided for under the Rule 12b-1 plan of a particular class of the Fund and which are directly attributable to that class are charged to the operations of such class. All other expenses are allocated among the classes based on relative net assets.
G.	Accounting Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print, which is generally 45 days from the period-end date.
H.	Indemnifications — Under the Trust’s organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into

AIM V.I. Technology Fund

	contracts, including the Fund’s servicing agreements, that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote.
I.	Other Risks — The Fund’s investments are concentrated in a comparatively narrow segment of the economy. Consequently, the Fund may tend to be more volatile than other mutual funds, and the value of the Fund’s investments may tend to rise and fall more rapidly.
	Many of the products and services offered in technology-related industries are subject to rapid obsolescence, which may lower the value of the securities of the companies in this sector.
J.	Securities Lending — The Fund may lend portfolio securities having a market value up to one-third of the Fund’s total assets. Such loans are secured by collateral equal to no less than the market value of the loaned securities determined daily by the securities lending provider. Such collateral will be cash or debt securities issued or guaranteed by the U.S. Government or any of its sponsored agencies. Cash collateral received in connection with these loans is invested in short-term money market instruments or affiliated money market funds and is shown as such on the Schedule of Investments. It is the Fund’s policy to obtain additional collateral from or return excess collateral to the borrower by the end of the next business day, following the valuation date of the securities loaned. Therefore, the value of the collateral held may be temporarily less than the value of the securities on loan. Lending securities entails a risk of loss to the Fund if and to the extent that the market value of the securities loaned were to increase and the borrower did not increase the collateral accordingly, and the borrower fails to return the securities. Upon the failure of the borrower to return the securities, collateral may be liquidated and the securities may be purchased on the open market to replace the loaned securities. The Fund could experience delays and costs in gaining access to the collateral. The Fund bears the risk of any deficiency in the amount of the collateral available for return to the borrower due to any loss on the collateral invested. Dividends received on cash collateral investments for securities lending transactions, which are net of compensation to counterparties, is included in Dividends from affiliates on the Statement of Operations. The aggregate value of securities out on loan is shown as a footnote on the Statement of Assets and Liabilities, if any.
K.	Foreign Currency Translations — Foreign currency is valued at the close of the NYSE based on quotations posted by banks and major currency dealers. Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at date of valuation. Purchases and sales of portfolio securities (net of foreign taxes withheld on disposition) and income items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. The Fund does not separately account for the portion of the results of operations resulting from changes in foreign exchange rates on investments and the fluctuations arising from changes in market prices of securities held. The combined results of changes in foreign exchange rates and the fluctuation of market prices on investments (net of estimated foreign tax withholding) are included with the net realized and unrealized gain or loss from investments in the Statement of Operations. Reported net realized foreign currency gains or losses arise from (i) sales of foreign currencies, (ii) currency gains or losses realized between the trade and settlement dates on securities transactions, and (iii) the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign currency gains and losses arise from changes in the fair values of assets and liabilities, other than investments in securities at fiscal period end, resulting from changes in exchange rates.
	The Fund may invest in foreign securities which may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable.
L.	Foreign Currency Contracts — The Fund may enter into foreign currency contracts to manage or minimize currency or exchange rate risk. The Fund may also enter into foreign currency contracts for the purchase or sale of a security denominated in a foreign currency in order to “lock in” the U.S. dollar price of that security. A foreign currency contract is an obligation to purchase or sell a specific currency for an agreed-upon price at a future date. The use of foreign currency contracts does not eliminate fluctuations in the price of the underlying securities the Fund owns or intends to acquire but establishes a rate of exchange in advance. Fluctuations in the value of these contracts are measured by the difference in the contract date and reporting date exchange rates and are recorded as unrealized appreciation (depreciation) until the contracts are closed. When the contracts are closed, realized gains (losses) are recorded. Realized and unrealized gains (losses) on the contracts are included in the Statement of Operations. The primary risks associated with foreign currency contracts include failure of the counterparty to meet the terms of the contract and the value of the foreign currency changing unfavorably. These risks may be in excess of the amounts reflected in the Statement of Assets and Liabilities.
M.	Futures Contracts — The Fund may enter into futures contracts to manage exposure to interest rate, equity and market price movements and/or currency risks. A futures contract is an agreement between two parties to purchase or sell a specified underlying security, currency or commodity (or delivery of a cash settlement price, in the case of an index future) for a fixed price at a future date. The Fund currently invests only in exchange-traded futures and they are standardized as to maturity date and underlying financial instrument. Initial margin deposits required upon entering into futures contracts are satisfied by the segregation of specific securities or cash as collateral at the futures commission merchant (broker). During the period the futures contracts are open, changes in the value of the contracts are recognized as unrealized gains or losses by recalculating the value of the contracts on a daily basis. Subsequent or variation margin payments are received or made depending upon whether unrealized gains or losses are incurred. These amounts are reflected as receivables or payables on the Statement of Assets and Liabilities. When the contracts are closed or expire, the Fund recognizes a realized gain or loss equal to the difference between the proceeds from, or cost of, the closing transaction and the Fund’s basis in the contract. The net realized gain (loss) and the change in unrealized gain (loss) on futures contracts held during the period is included on the Statement of Operations. The primary risks associated with futures contracts are market risk and the absence of a liquid secondary market. If the Fund were unable to liquidate a futures contract and/or enter into an offsetting closing transaction, the Fund would continue to be subject to market risk with respect to the value of the contracts and continue to be required to maintain the margin deposits on the futures contracts. Futures contracts have minimal counterparty risk since the exchange’s clearinghouse, as counterparty to all exchange traded futures, guarantees the futures against default. Risks may exceed amounts recognized in the Statement of Assets and Liabilities.

AIM V.I. Technology Fund

NOTE 2—Advisory Fees and Other Fees Paid to Affiliates

The Trust has entered into a master investment advisory agreement with Invesco Advisers, Inc. (the “Adviser” or “Invesco”). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Adviser based on the annual rate of the Fund’s average daily net assets as follows:

Average Net Assets	Rate
First $250 million		0	.75%
Next $250 million		0	.74%
Next $500 million		0	.73%
Next $1.5 billion		0	.72%
Next $2.5 billion		0	.71%
Next $2.5 billion		0	.70%
Next $2.5 billion		0	.69%
Over $10 billion		0	.68%

  Under the terms of a master sub-advisory agreement approved by shareholders of the Funds between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Trimark Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Funds, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide discretionary investment management services to each Fund based on the percentage of assets allocated to such Sub-Adviser(s).

  On December 31, 2009, Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc., Invesco Private Asset Management, Inc. and Invesco Global Asset Management (N.A.), Inc. merged into Invesco Institutional (N.A.), Inc. and the consolidated adviser firm was renamed Invesco Advisers, Inc.

  The Adviser has contractually agreed to waive advisory fees and/or reimburse expenses of all shares to the extent necessary to limit total annual fund operating expenses after fee waiver (excluding certain items discussed below) of Series I shares to 1.30% and Series II shares to 1.45% of average daily net assets, through at least April 30, 2011. In determining the Adviser’s obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the total annual fund operating expenses after fee waiver to exceed the numbers reflected above: (1) interest; (2) taxes; (3) dividend expense on short sales; (4) extraordinary items or non-routine items; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. The Board of Trustees or Invesco may terminate the fee waiver arrangement at any time. The Adviser did not waive fees and/or reimburse expenses during the period under this expense limitation.

  Further, the Adviser has contractually agreed, through at least June 30, 2010, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash (excluding investments of cash collateral from securities lending) in such affiliated money market funds.

  For the year ended December 31, 2009, the Adviser waived advisory fees of $5,103.

  At the request of the Trustees of the Trust, Invesco Ltd. agreed to reimburse expenses incurred by the Fund in connection with market timing matters in the AIM Funds, which may include legal, audit, shareholder reporting, communications and trustee expenses. For the year ended December 31, 2009, Invesco Ltd. did not reimburse any expenses.

  The Trust has entered into a master administrative services agreement with Invesco pursuant to which the Fund has agreed to pay Invesco a fee for costs incurred in providing accounting services and fund administrative services to the Fund and to reimburse Invesco for administrative services fees paid to insurance companies that have agreed to provide services to the participants of separate accounts. These administrative services provided by the insurance companies may include, among other things: the printing of prospectuses, financial reports and proxy statements and the delivery of the same to existing participants; the maintenance of master accounts; the facilitation of purchases and redemptions requested by the participants; and the servicing of participants’ accounts. Pursuant to such agreement, for the year ended December 31, 2009, Invesco was paid $50,000 for accounting and fund administrative services and reimbursed $225,564 for services provided by insurance companies.

  The Trust has entered into a transfer agency and service agreement with Invesco Aim Investment Services, Inc. (“IAIS”) pursuant to which the Fund has agreed to pay IAIS a fee for providing transfer agency and shareholder services to the Fund and reimburse IAIS for certain expenses incurred by IAIS in the course of providing such services. For the year ended December 31, 2009, expenses incurred under the agreement are shown in the Statement of Operations as transfer agent fees.

  The Trust has entered into a master distribution agreement with Invesco Aim Distributors, Inc. (“IADI”) to serve as the distributor for the Fund. The Trust has adopted a plan pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund’s Series II shares (the “Plan”). The Fund, pursuant to the Plan, pays IADI compensation at the annual rate of 0.25% of the Fund’s average daily net assets of Series II shares. Of the Plan payments, up to 0.25% of the average daily net assets of the Series II shares may be paid to insurance companies who furnish continuing personal shareholder services to customers who purchase and own Series II shares of the Fund. For the year ended December 31, 2009, expenses incurred under the Plan are detailed in the Statement of Operations as distribution fees.

  Certain officers and trustees of the Trust are officers and directors of Invesco, IAIS and/or IADI.

AIM V.I. Technology Fund

NOTE 3—Additional Valuation Information

Generally Accepted Accounting Principles (“GAAP”) defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3) generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment’s assigned level:

Level 1 —	Prices are determined using quoted prices in an active market for identical assets.
Level 2 —	Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk and others.
Level 3 —	Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information.

  The following is a summary of the tiered valuation input levels, as of December 31, 2009. The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.

	Level 1		Level 2		Level 3		Total
Equity Securities	$	120,875,019	$	545,428	$	808,731	$	122,229,178

NOTE 4—Derivative Investments

Effective with the beginning of the Fund’s fiscal year, the Fund has implemented new required disclosures about derivative instruments and hedging activities in accordance with GAAP. GAAP has intended to improve financial reporting about derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity’s financial position and financial performance. The enhanced disclosure has no impact on the results of operations reported in the financial statements.

Effect of Derivative Instruments for the year ended December 31, 2009

The table below summarizes the gains on derivative instruments, detailed by primary risk exposure, recognized in earnings during the period:

	Location of Gain on
	Statement of Operations
	Futures*
Realized Gain
Index risk	$	41,488

*  The average value of futures contracts outstanding during the period was $109,838.

NOTE 5—Security Transactions with Affiliated Funds

The Fund is permitted to purchase or sell securities from or to certain other AIM Funds under specified conditions outlined in procedures adopted by the Board of Trustees of the Trust. The procedures have been designed to ensure that any purchase or sale of securities by the Fund from or to another fund or portfolio that is or could be considered an affiliate by virtue of having a common investment adviser (or affiliated investment advisers), common Trustees and/or common officers complies with Rule 17a-7 of the 1940 Act. Further, as defined under the procedures, each transaction is effected at the current market price. Pursuant to these procedures, for the year ended December 31, 2009, the Fund engaged in securities purchases of $84,663.

NOTE 6—Trustees’ and Officers’ Fees and Benefits

“Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and “Trustees’ and Officers’ Fees and Benefits” also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various AIM Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees are eligible to participate in a retirement plan that provides for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former Trustees who also participate in a retirement plan and receive benefits under such plan. “Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund.

  During the year ended December 31, 2009, the Fund paid legal fees of $2,959 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A member of that firm is a Trustee of the Trust.

AIM V.I. Technology Fund

NOTE 7—Cash Balances

The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with The State Street Bank and Trust Company, the custodian bank. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (i) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (ii) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.

NOTE 8—Distributions to Shareholders and Tax Components of Net Assets

There were no ordinary income or long-term capital gain distributions paid during the years ended December 31, 2009 and 2008.

Tax Components of Net Assets at Period-End:

	2009
Net unrealized appreciation — investments	$	18,984,807
Net unrealized appreciation (depreciation) — other investments		(240	)
Temporary book/tax differences		(41,398	)
Post-October deferrals		(313,874	)
Capital loss carryforward		(47,527,413	)
Shares of beneficial interest		148,683,154
Total net assets	$	119,785,036

  The difference between book-basis and tax-basis unrealized appreciation (depreciation) is due to differences in the timing of recognition of gains and losses on investments for tax and book purposes. The Fund’s net unrealized appreciation difference is attributable primarily to wash sales and partnership interests.

  The temporary book/tax differences are a result of timing differences between book and tax recognition of income and/or expenses. The Fund’s temporary book/tax differences are the result of the trustee deferral of compensation and retirement plan benefits.

  Capital loss carryforward is calculated and reported as of a specific date. Results of transactions and other activity after that date may affect the amount of capital loss carryforward actually available for the Fund to utilize. The ability to utilize capital loss carryforward in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions. Under these limitation rules, the Fund is limited to utilizing $47,527,413 of capital loss carryforward in the fiscal year ending December 31, 2010

  The Fund has a capital loss carryforward as of December 31, 2009 which expires as follows:

	Capital Loss
Expiration	Carryforward*
December 31, 2010	$	33,793,498
December 31, 2016		2,325,578
December 31, 2017		11,408,337
Total capital loss carryforward	$	47,527,413

*  Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code.

NOTE 9—Investment Securities

The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the year ended December 31, 2009 was $40,473,059 and $36,106,398, respectively. Cost of investments on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed Federal income tax reporting period-end.

Unrealized Appreciation (Depreciation) of Investment Securities on a Tax Basis
Aggregate unrealized appreciation of investment securities	$	25,915,141
Aggregate unrealized (depreciation) of investment securities		(6,930,334	)
Net unrealized appreciation of investment securities	$	18,984,807
Cost of investments for tax purposes is $103,244,371.

NOTE 10—Reclassification of Permanent Differences

Primarily as a result of differing book/tax treatment of expired capital loss carryforward and net operating losses, on December 31, 2009, undistributed net investment income was increased by $2,026,815, undistributed net realized gain (loss) was increased by $152,202,397 and shares of beneficial interest decreased by $154,229,212. This reclassification had no effect on the net assets of the Fund.

AIM V.I. Technology Fund

NOTE 11—Share Information

	Summary of Share Activity
	Year ended December 31,
	2009(a)						2008
	Shares			Amount			Shares			Amount
Sold:
Series I		2,735,605		$	28,624,111			1,720,789		$	21,453,022
Series II		21,914			249,444			8,278			74,875
Reacquired:
Series I		(2,226,031	)		(22,575,615	)		(3,692,517	)		(45,147,588	)
Series II		(3,726	)		(37,280	)		(3,056	)		(33,617	)
Net increase (decrease) in share activity		527,762		$	6,260,660			(1,966,506	)	$	(23,653,308	)

^(a) There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 63% of the outstanding shares of the Fund. The Fund and the Fund’s principal underwriter or adviser, are parties to participation agreements with these entities whereby these entities sell units of interest in separate accounts funding variable products that are invested in the Fund. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as, securities brokerage, third party record keeping and account servicing and administrative services. The Trust has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially.

NOTE 12—Financial Highlights

The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.

																			Ratio of			Ratio of
																			expenses			expenses
						Net gains													to average			to average net			Ratio of net
	Net asset		Net			(losses) on													net assets			assets without			investment
	value,		investment			securities (both			Total from			Net asset					Net assets,		with fee waivers			fee waivers			income (loss)
	beginning		income			realized and			investment			value, end		Total			end of period		and/or expenses			and/or expenses			to average			Portfolio
	of period		(loss)			unrealized)			operations			of period		Return(a)			(000s omitted)		absorbed			absorbed			net assets			turnover(b)
Series I
Year ended 12/31/09	$	8.38	$	(0.03	)(c)	$	4.84		$	4.81		$	13.19		57.40	%	$	119,369		1.18	%(d)		1.19	%(d)		(0.27	)%(d)		42	%
Year ended 12/31/08		15.10		0.01	(c)		(6.73	)		(6.72	)		8.38		(44.50	)		71,546		1.15			1.16			0.05			81
Year ended 12/31/07		14.02		(0.06	)		1.14			1.08			15.10		7.70			158,739		1.10			1.10			(0.38	)		59
Year ended 12/31/06		12.69		(0.08	)		1.41			1.33			14.02		10.48			173,321		1.12			1.12			(0.54	)		116
Year ended 12/31/05		12.42		(0.07	)		0.34			0.27			12.69		2.17			190,700		1.12			1.12			(0.60	)		114
Series II
Year ended 12/31/09		8.26		(0.06	)(c)		4.78			4.72			12.98		57.14			417		1.43	(d)		1.44	(d)		(0.52	)(d)		42
Year ended 12/31/08		14.95		(0.02	)(c)		(6.67	)		(6.69	)		8.26		(44.75	)		115		1.40			1.41			(0.20	)		81
Year ended 12/31/07		13.91		(0.10	)		1.14			1.04			14.95		7.48			130		1.35			1.35			(0.63	)		59
Year ended 12/31/06		12.62		(0.12	)		1.41			1.29			13.91		10.22			134		1.37			1.37			(0.79	)		116
Year ended 12/31/05		12.39		(0.11	)		0.34			0.23			12.62		1.86			142		1.37			1.37			(0.85	)		114

(a)	Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Total returns do not reflect charges assessed in connection with a variable product, which if included would reduce total returns.
(b)	Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable.
(c)	Calculated using average shares outstanding.
(d)	Ratios are based on average daily net assets (000’s omitted) of $91,378 and $194 for Series I and Series II shares, respectively.

AIM V.I. Technology Fund

Report of Independent Registered Public Accounting Firm

To the Board of Trustees of AIM Variable Insurance Funds

and Shareholders of AIM V.I. Technology Fund:

In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of AIM V.I. Technology Fund (one of the funds constituting AIM Variable Insurance Funds, hereafter referred to as the “Fund”) at December 31, 2009, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for the each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at December 31, 2009 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.

PRICEWATERHOUSECOOPERS LLP

February 10, 2010

Houston, Texas

AIM V.I. Technology Fund

Calculating your ongoing Fund expenses

Example

As a shareholder of the Fund, you incur ongoing costs, including management fees; distribution and/or service fees (12b-1); and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period July 1, 2009 through December 31, 2009.

  The actual and hypothetical expenses in the examples below do not represent the effect of any fees or other expenses assessed in connection with a variable product; if they did, the expenses shown would be higher while the ending account values shown would be lower.

Actual expenses

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

Hypothetical example for comparison purposes

The table below also provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return.

  The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

  Please note that the expenses shown in the table are meant to highlight your ongoing costs. Therefore, the hypothetical information is useful in comparing ongoing costs, and will not help you determine the relative total costs of owning different funds.

							HYPOTHETICAL
							(5% annual return before
			ACTUAL				expenses)
	Beginning		Ending		Expenses		Ending		Expenses		Annualized
	Account Value		Account Value		Paid During		Account Value		Paid During		Expense
Class	(07/01/09)		(12/31/09)1		Period2		(12/31/09)		Period2		Ratio
Series I	$	1,000.00	$	1,290.60	$	6.58	$	1,019.46	$	5.80		1.14	%
Series II		1,000.00		1,289.00		8.19		1,018.05		7.22		1.42

1	The actual ending account value is based on the actual total return of the Fund for the period July 1, 2009 through December 31, 2009, after actual expenses and will differ from the hypothetical ending account value which is based on the Fund’s expense ratio and a hypothetical annual return of 5% before expenses.
2	Expenses are equal to the Fund’s annualized expense ratio as indicated above multiplied by the average account value over the period, multiplied by 184/365 to reflect the most recent fiscal half year.

AIM V.I. Technology Fund

Trustees and Officers

The address of each trustee and officer of AIM Variable Insurance Funds (the “Trust”), is 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173. Each trustee oversees 105 portfolios in the AIM Funds complex. The trustees serve for the life of the Trust, subject to their earlier death, incapacitation, resignation, retirement or removal as more specifically provided in the Trust’s organizational documents. Each officer serves for a one year term or until their successors are elected and qualified. Column two below includes length of time served with predecessor entities, if any.

	Trustee and/
Name, Year of Birth and	or Officer	Principal Occupation(s)	Other Directorship(s)
Position(s) Held with the Trust	Since	During Past 5 Years	Held by Trustee
Interested Persons
Martin L. Flanagan1 — 1960 Trustee	2007	Executive Director, Chief Executive Officer and President, Invesco Ltd. (ultimate parent of Invesco Aim and a global investment management firm); Adviser to the Board, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Trustee, The AIM Family of Funds®; Board of Governors, Investment Company Institute; and Member of Executive Board, SMU Cox School of Business	None
		Formerly: Chairman, Invesco Aim Advisors, Inc. (registered investment adviser); Director, Chairman, Chief Executive Officer and President, IVZ Inc. (holding company), INVESCO Group Services, Inc. (service provider) and Invesco North American Holdings, Inc. (holding company); Director, Chief Executive Officer and President, Invesco Holding Company Limited (parent of Invesco Aim and a global investment management firm); Director, Invesco Ltd.; Chairman and Vice Chairman, Investment Company Institute
Philip A. Taylor2 — 1954 Trustee, President and Principal Executive Officer	2006	Head of North American Retail and Senior Managing Director, Invesco Ltd.; Director, Co-Chairman, Co-President and Co- Chief Executive Officer, Invesco Advisers, inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Director, Chief Executive Officer and President, Invesco Aim Advisors, Inc. and 1371 Preferred Inc. (holding company); Director, Chairman, Chief Executive Officer and President, Invesco Aim Management Group, Inc. (financial services holding company); Director, Co-Chairman, Co-President and Co-Chief Executive Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Director and President, INVESCO Funds Group, Inc. (registered investment adviser and registered transfer agent) and AIM GP Canada Inc. (general partner for limited partnerships); Director, Invesco Aim Distributors, Inc. (registered broker dealer); Director and Chairman, Invesco Aim Investment Services, Inc. (registered transfer agent) and INVESCO Distributors, Inc. (registered broker dealer); Director, President and Chairman, INVESCO Inc. (holding company) and Invesco Canada Holdings Inc. (holding company); Chief Executive Officer, AIM Trimark Corporate Class Inc. (corporate mutual fund company) and AIM Trimark Canada Fund Inc. (corporate mutual fund company); Director and Chief Executive Officer, Invesco Trimark Ltd./Invesco Trimark Ltèe (registered investment adviser and registered transfer agent) and Invesco Trimark Dealer Inc. (registered broker dealer); Trustee, President and Principal Executive Officer, The AIM Family of Funds® (other than AIM Treasurer’s Series Trust and Short-Term Investments Trust); Trustee and Executive Vice President, The AIM Family of Funds® (AIM Treasurer’s Series Trust and Short-Term Investments Trust only); and Manager, Invesco PowerShares Capital Management LLC Formerly: Manager, Invesco PowerShares Capital Management LLC; Director, Chief Executive Officer and President, Invesco Aim Advisors, Inc.; Director, Chairman, Chief Executive Officer and President, Invesco Aim Capital Management, Inc.; President, Invesco Trimark Dealer Inc. and Invesco Trimark Ltd./Invesco Trimark Ltèe; Director and President, AIM Trimark Corporate Class Inc. and AIM Trimark Canada Fund Inc.; Senior Managing Director, Invesco Holding Company Limited; Trustee and Executive Vice President, Tax-Free Investments Trust; Director and Chairman, Fund Management Company (former registered broker dealer); President and Principal Executive Officer, The AIM Family of Funds® (AIM Treasurer’s Series Trust, Short-Term Investments Trust and Tax-Free Investments Trust only); President, AIM Trimark Global Fund Inc. and AIM Trimark Canada Fund Inc.	None
Independent Trustees
Bruce L. Crockett — 1944 Trustee and Chair	1993	Chairman, Crockett Technology Associates (technology consulting company)	ACE Limited (insurance company); Captaris, Inc. (unified messaging provider); and Investment Company Institute
Bob R. Baker — 1936 Trustee	2004	Retired	None
Frank S. Bayley — 1939 Trustee	2001	Retired Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios)	None
James T. Bunch — 1942 Trustee	2004	Founder, Green, Manning & Bunch Ltd., (investment banking firm)	Board of Governors, Western Golf Association/Evans Scholars Foundation and Executive Committee, United States Golf Association
Albert R. Dowden — 1941 Trustee	2000	Director of a number of public and private business corporations, including the Boss Group, Ltd. (private investment and management); Reich & Tang Funds (registered investment company); and Homeowners of America Holding Corporation/Homeowners of America Insurance Company (property casualty company)	Board of Nature’s Sunshine Products, Inc.
		Formerly: Director, Continental Energy Services, LLC (oil and gas pipeline service); Director, CompuDyne Corporation (provider of product and services to the public security market) and Director, Annuity and Life Re (Holdings), Ltd. (reinsurance company); Director, President and Chief Executive Officer, Volvo Group North America, Inc.; Senior Vice President, AB Volvo; Director of various public and private corporations
Jack M. Fields — 1952 Trustee	1997	Chief Executive Officer, Twenty First Century Group, Inc. (government affairs company); and Owner and Chief Executive Officer, Dos Angelos Ranch, L.P. (cattle, hunting, corporate entertainment), Discovery Global Education Fund (non-profit) and Cross Timbers Quail Research Ranch (non-profit)	Administaff
		Formerly: Chief Executive Officer, Texana Timber LP (sustainable forestry company)
Carl Frischling — 1937 Trustee	1993	Partner, law firm of Kramer Levin Naftalis and Frankel LLP	Director, Reich & Tang Funds (16 portfolios)
Prema Mathai-Davis — 1950 Trustee	1998	Retired	None
Lewis F. Pennock — 1942 Trustee	1993	Partner, law firm of Pennock & Cooper	None
Larry Soll — 1942 Trustee	2004	Retired	None
Raymond Stickel, Jr. — 1944 Trustee	2005	Retired Formerly: Director, Mainstay VP Series Funds, Inc. (25 portfolios)	None

1	Mr. Flanagan is considered an interested person of the Trust because he is an officer of the adviser to the Trust, and an officer and a director of Invesco Ltd., ultimate parent of the adviser to the Trust.
2	Mr. Taylor is considered an interested person of the Trust because he is an officer and a director of the adviser to, and a director of the principal underwriter of, the Trust.

T-1

Trustees and Officers – (continued)

	Trustee and/
Name, Year of Birth and	or Officer	Principal Occupation(s)	Other Directorship(s)
Position(s) Held with the Trust	Since	During Past 5 Years	Held by Trustee
Other Officers
Russell C. Burk — 1958 Senior Vice President and Senior Officer	2005	Senior Vice President and Senior Officer of The AIM Family of Funds®	N/A
John M. Zerr — 1962 Senior Vice President, Chief Legal Officer and Secretary	2006	Director, Senior Vice President, Secretary and General Counsel, Invesco Aim Management Group, Inc., Senior Vice President, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Director, Senior Vice President and Secretary, Invesco Aim Distributors, Inc.; Director, Vice President and Secretary, Invesco Aim Investment Services, Inc. and INVESCO Distributors, Inc.; Director and Vice President, INVESCO Funds Group, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The AIM Family of Funds®; and Manager, Invesco PowerShares Capital Management LLC	N/A
		Formerly: Director, Senior Vice President, General Counsel and Secretary, Invesco Aim Advisors, Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco Aim Capital Management, Inc.; Chief Operating Officer and General Counsel, Liberty Ridge Capital, Inc. (an investment adviser); Vice President and Secretary, PBHG Funds (an investment company) and PBHG Insurance Series Fund (an investment company); Chief Operating Officer, General Counsel and Secretary, Old Mutual Investment Partners (a broker-dealer); General Counsel and Secretary, Old Mutual Fund Services (an administrator) and Old Mutual Shareholder Services (a shareholder servicing center); Executive Vice President, General Counsel and Secretary, Old Mutual Capital, Inc. (an investment adviser); and Vice President and Secretary, Old Mutual Advisors Funds (an investment company)
Lisa O. Brinkley — 1959 Vice President	2004	Global Compliance Director, Invesco Ltd.; Chief Compliance Officer, Invesco Aim Distributors, Inc. and Invesco Aim Investment Services, Inc.; and Vice President, The AIM Family of Funds®	N/A
		Formerly: Senior Vice President, Invesco Aim Management Group, Inc.; Senior Vice President and Chief Compliance Officer, Invesco Aim Advisors, Inc. and The AIM Family of Funds®; Vice President and Chief Compliance Officer, Invesco Aim Capital Management, Inc. and Invesco Aim Distributors, Inc.; Vice President, Invesco Aim Investment Services, Inc. and Fund Management Company
Kevin M. Carome — 1956 Vice President	2003	General Counsel, Secretary and Senior Managing Director, Invesco Ltd.; Director, Invesco Holding Company Limited and INVESCO Funds Group, Inc.; Director and Executive Vice President, IVZ, Inc., Invesco Group Services, Inc., Invesco North American Holdings, Inc. and Invesco Investments (Bermuda) Ltd.; Director and Secretary, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); and Vice President, The AIM Family of Funds® Formerly: Senior Managing Director and Secretary, Invesco North American Holdings, Inc.; Vice President and Secretary, IVZ, Inc. and Invesco Group Services, Inc.; Senior Managing Director and Secretary, Invesco Holding Company Limited; Director, Senior Vice President, Secretary and General Counsel, Invesco Aim Management Group, Inc. and Invesco Aim Advisors, Inc.; Senior Vice President, Invesco Aim Distributors, Inc.; Director, General Counsel and Vice President, Fund Management Company; Vice President, Invesco Aim Capital Management, Inc. and Invesco Aim Investment Services, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The AIM Family of Funds®; Director and Vice President, INVESCO Distributors, Inc.; and Chief Executive Officer and President, INVESCO Funds Group, Inc.	N/A
Sheri Morris — 1964 Vice President, Treasurer and Principal Financial Officer	1999	Vice President, Treasurer and Principal Financial Officer, The AIM Family of Funds®; and Vice President, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.) Formerly: Vice President, Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.; Assistant Vice President and Assistant Treasurer, The AIM Family of Funds® and Assistant Vice President, Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A
Karen Dunn Kelley — 1960 Vice President	1993	Head of Invesco’s World Wide Fixed Income and Cash Management Group; Senior Vice President, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Executive Vice President, Invesco Aim Distributors, Inc.; Senior Vice President, Invesco Aim Management Group, Inc.; and Director, Invesco Mortgage Capital Inc.; Vice President, The AIM Family of Funds® (other than AIM Treasurer’s Series Trust and Short-Term Investments Trust); and President and Principal Executive Officer, The AIM Family of Funds® (AIM Treasurer’s Series Trust and Short-Term Investments Trust only)	N/A
		Formerly: Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Director of Cash Management and Senior Vice President, Invesco Aim Advisors, Inc. and Invesco Aim Capital Management, Inc.; President and Principal Executive Officer, Tax-Free Investments Trust; Director and President, Fund Management Company; Chief Cash Management Officer, Director of Cash Management, Senior Vice President, and Managing Director, Invesco Aim Capital Management, Inc.; Director of Cash Management, Senior Vice President, and Vice President, Invesco Aim Advisors, Inc. and The AIM Family of Funds® (AIM Treasurer’s Series Trust, Short-Term Investments Trust and Tax-Free Investments Trust only)
Lance A. Rejsek — 1967 Anti-Money Laundering Compliance Officer	2005	Anti-Money Laundering Compliance Officer, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Invesco Aim Distributors, Inc., Invesco Aim Investment Services, Inc., and The AIM Family of Funds®	N/A
		Formerly: Anti-Money Laundering Compliance Officer, Fund Management Company, Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.
Todd L. Spillane — 1958 Chief Compliance Officer	2006	Senior Vice President, Invesco Aim Management Group, Inc.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Chief Compliance Officer, The AIM Family of Funds®, INVESCO Private Capital Investments, Inc. (holding company), Invesco Private Capital, Inc. (registered investment adviser) and Invesco Senior Secured Management, Inc. (registered investment adviser); Vice President, Invesco Aim Distributors, Inc. and Invesco Aim Investment Services, Inc.	N/A
		Formerly: Senior Vice President and Chief Compliance Officer, Invesco Aim Advisors, Inc. and Invesco Aim Capital Management, Inc.; Chief Compliance Officer, Invesco Global Asset Management (N.A.), Inc.; Vice President, Invesco Aim Capital Management, Inc. and Fund Management Company

The Statement of Additional Information of the Trust includes additional information about the Fund’s Trustees and is available upon request, without charge, by calling 1.800.959.4246. Please refer to the Fund’s prospectus for information on the Fund’s sub-advisers.

Office of the Fund	Investment Adviser	Distributor	Auditors
11 Greenway Plaza, Suite 100	Invesco Advisers, Inc.	Invesco Aim Distributors, Inc.	PricewaterhouseCoopers LLP
Houston, TX 77046-1173	1555 Peachtree Street, N.E.	11 Greenway Plaza, Suite 100	1201 Louisiana Street, Suite 2900
	Atlanta, GA 30309	Houston, TX 77046-1173	Houston, TX 77002-5678
Counsel to the Fund	Counsel to the	Transfer Agent	Custodian
Stradley Ronon Stevens & Young, LLP	Independent Trustees	Invesco Aim Investment Services, Inc.	State Street Bank and Trust Company
2600 One Commerce Square	Kramer, Levin, Naftalis & Frankel LLP	P.O. Box 4739	225 Franklin
Philadelphia, PA 19103	1177 Avenue of the Americas	Houston, TX 77210-4739	Boston, MA 02110-2801
	New York, NY 10036-2714
T-2

AIM V.I. Utilities Fund
Annual Report to Shareholders § December 31, 2009

The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter-ends. For the second and fourth quarters, the lists appear in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The Fund’s Form N-Q filings are available on the SEC website, sec.gov. Copies of the Fund’s Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers for the Fund are 811-07452 and 033-57340. The Fund’s most recent portfolio holdings, as filed on Form N-Q, have also been made available to insurance companies issuing variable annuity contracts and variable life insurance policies (“variable products”) that invest in the Fund.

A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, from our Client Services department at 800 410 4246 or on the Invesco Aim website, invescoaim.com. On the home page, scroll down and click on Proxy Policy. The information is also available on the SEC website, sec.gov.

Information regarding how the Fund voted proxies related to its portfolio securities during the 12 months ended June 30, 2009, is available at our website, invescoaim.com. Click the About Us tab at the top of the home page; click Legal Information; and then click Proxy Voting Search. The information is also available on the SEC website, sec.gov.

Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Aim Distributors, Inc. is the U.S. distributor for Invesco Ltd.’s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd.

This report must be accompanied or preceded by a currently effective Fund prospectus and variable product prospectus, which contain more complete information, including sales charges and expenses. Investors should read each carefully before investing.

Invesco Aim Distributors, Inc.

NOT FDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEE

Management’s Discussion of Fund Performance

Performance summary

Due to their generally defensive nature, utilities stocks held up well in the early months of 2009 as the financial crisis roiled equity markets. However, that trend reversed abruptly following the markets’ March low. As a result, the utilities sector lagged the broad market as measured by the S&P 500 Index for the remainder of the year.

     Similarly, AIM V.I. Utilities Fund had positive returns for the 12 months ended December 31, 2009 — but it lagged the S&P 500 Index. Performance drivers were largely stock-specific, with the electric, gas and multi-utilities industries having the largest positive effect on the Fund’s results. The diversified telecommunication services industry detracted from the Fund’s returns.

     Your Fund’s long-term performance appears later in this report.

Fund vs. Indexes

Total returns, 12/31/08 to 12/31/09, excluding variable product issuer charges.

If variable product issuer charges were included, returns would be lower.

Series I Shares	14.93	%
Series II Shares	14.61
S&P 500 Index6 (Broad Market Index)	26.47
Lipper VUF Utility Funds Category Average6 (Peer Group)	22.30

⁶ Lipper Inc.

How we invest

The Fund’s prior management team invested primarily in natural gas, electricity and telecommunication services companies based on empirical research of individual companies. Using fundamental analysis to focus on positive cash flows and predictable earnings, managers sought to identify strong balance sheets, competent management and sustainable dividends and distributions. Managers also looked for attractively valued companies that could potentially benefit from industry trends, such as increased demand for certain products and deregulation of state markets.

     On January 23, 2009, we assumed responsibility for managing AIM V.I. Utilities Fund. We are committed to providing strategic exposure to a traditionally defensive and income-oriented asset class, and we manage the Fund using a total return approach — emphasizing capital appreciation, current income and capital preservation.

     In selecting investments, we focus on dividend-paying companies within the electric utility, natural gas, water and telecommunications industries. We emphasize companies with solid balance sheets and operational cash flows that support sustained or increasing dividends. Fundamental research and financial statement analysis are the backbone of our bottom-up investment process. Using a variety of valuation techniques, we estimate the potential return over a two-year investment period. We construct the portfolio to provide what we consider to be the best combination of price appreciation potential, dividend income and risk profile. The Fund typically maintains full sector exposure, and we manage risk by maintaining an average of 30-50 positions, low turnover and a rigorous sell discipline.

Market conditions and your Fund

The year covered by this report was characterized by two dramatically different market environments. In early 2009, equity markets declined sharply as credit markets froze and risk premiums rose dramatically in response to the global recession. As central banks coordinated easing efforts and companies cut costs aggressively, access to liquidity improved and market valuations in both the credit and equity markets recovered from the March 2009 lows.

     Major equity indexes generated positive returns for the year.¹ Economically sensitive sectors such as information technology (IT), consumer discretionary and materials had the highest returns, while the traditionally defensive telecommunication services and utilities sectors had the lowest returns overall.¹ Many utilities companies were negatively affected by reduced industrial and residential demand as a result of the weak economy.

     The largest contributor to Fund performance was CMS Energy in the multi-utilities industry. The company’s Michigan-based subsidiary, Consumers Energy, benefited from recent energy reforms that produced a more favorable rate structure for the state’s regulated utility companies.

     Oil and gas producer Williams Companies also had a positive effect on the Fund’s results. Largely exploration and production-driven, the company was affected considerably by natural gas prices, which depressed corporate earnings for much of the year. However, within Williams’ pipeline business, higher volumes and lucrative hedges offset some of this impact. In the fourth quarter of 2009, the company raised its estimate for full-year 2009 earnings, and reiterated its projections for higher gas prices in 2010.

Portfolio Composition
By sector

Utilities	86.0	%
Telecommunication Services	5.1
Energy	3.6
Money Market Funds Plus Other Assets Less Liabilities	5.3

Top 10 Equity Holdings*

1. Entergy Corp.		4.7	%
2. CMS Energy Corp.		4.4
3. PG&E Corp.		4.4
4. FirstEnergy Corp.		4.3
5. Dominion Resources, Inc.		4.1
6. PPL Corp.		4.0
7. Edison International		4.0
8. Xcel Energy, Inc.		3.7
9. American Electric Power Co., Inc.		3.6
10. ONEOK, Inc.		3.6
Total Net Assets	$	72.4 million
Total Number of Holdings*		31

The Fund’s holdings are subject to change, and there is no assurance that the Fund will continue to hold any particular security.

* Excluding money market fund holdings.

AIM V.I. Utilities Fund

     Gas utility ONEOK raised its dividend during the year and was a top contributor to Fund returns. Despite weakness in a number of its business units due to lower commodity prices, new pipeline capacity increased gathering and processing volumes and provided a consistent source of cash flows. The company’s multi-year expansion plan includes further increases in pipeline capacity, which we believe may provide additional earnings.

     Alaska Communications Systems, a provider of wireless, broadband, long-distance and local phone service in Alaska, was the largest detractor from Fund performance. Concerns about the company’s future subscriber growth and profitability in the face of the weakening Alaskan economy and increased competition were exacerbated by the company’s weakening balance sheet. Declining cash flow and weakening credit trends caused us to question the company’s ability to meet required capital expenditure needs; as a result, we sold our position in the stock.

     Another detractor from Fund performance was Ameren, a public utility company. Early in 2009, the company reduced its 2009 earnings guidance, and in an effort to enhance financial strength and flexibility, the company announced a dividend reduction of approximately 39%. We eliminated our position during the year.

     Exelon, one of the largest nuclear power generators in the U.S., also detracted from Fund performance. A failed takeover attempt of NRG Energy and the strategic direction of the company weighed on shares for much of the year. Sensitivity to falling natural gas prices also contributed to weakness.

     During the year, we made a number of modest changes to the Fund’s positioning, which included reducing exposure to the telecommunications industry and emphasizing regulated over non-regulated utilities, given the relatively attractive valuations of regulated utilities. At the end of the year, the Fund’s largest industry allocations were in the electric, natural gas and multi-utilities industries.

     At the close of 2009, there were a number of competing issues for the utilities sector. On the positive side, lower commodity prices benefited regulated utilities as they were better able to manage their input costs. Additionally, the country’s outdated electric system will require ongoing infrastructure improvements that may provide opportunities for increased efficiency. However, utilities were not completely immune to the economic cycle.

     For the first time in many years, both residential and industrial customers reduced their electric consumption during 2009. This demand destruction, combined with tighter credit markets, caused utility companies to reassess their capital expenditure plans. While maintenance and environmental improvements were still expected, discretionary spending plans were constrained.

     We would like to thank you for your continued investment in AIM V.I. Utilities Fund. We are committed to providing investors strategic exposure to a traditionally defensive and income-oriented asset class through our total return approach.

1 Lipper Inc.

The views and opinions expressed in management’s discussion of Fund performance are those of Invesco Advisers, Inc. These views and opinions are subject to change at any time based on factors such as market and economic conditions. These views and opinions may not be relied upon as investment advice or recommendations, or as 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 Invesco Advisers, Inc. 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.

See important Fund and index disclosures later in this report.

Meggan Walsh

Chartered Financial Analyst, senior portfolio manager, is lead manager of AIM V.I. Utilities Fund. She has worked in the investment industry since 1987 and joined Invesco Aim in 1991. Ms. Walsh earned a B.S. in finance from the University of Maryland and an M.B.A. from Loyola University Maryland.

Davis Paddock

Chartered Financial Analyst, portfolio manager, is co-manager of AIM V.I. Utilities Fund. He joined Invesco Aim in 2001. Mr. Paddock earned his B.A. and M.B.A. from The University of Texas at Austin.

Assisted by the Utilities Team

AIM V.I. Utilities Fund

Your Fund’s Long-Term Performance

Results of a $10,000 Investment — Oldest Share Class since Inception
Fund data from 12/30/94, index data from 12/31/94

1   Lipper Inc.

Past performance cannot guarantee comparable future results.

     This chart, which is a logarithmic chart, presents the fluctuations in the value of the Fund and its indexes. We believe that a logarithmic chart is more effective than other types of charts in illustrating changes in value during the early years shown in the chart. The vertical axis, the one that indicates the dollar value of an investment, is constructed with each segment representing a percent change in the value of the investment. In this chart, each segment represents a doubling, or 100% change, in the value of the investment. In other words, the space between $5,000 and $10,000 is the same size as the space between $10,000 and $20,000, and so on.

Average Annual Total Returns
As of 12/31/09

Series I Shares
Inception (12/30/94)	6.49	%
10 Years	1.24
5 Years	6.57
1 Year	14.93
Series II Shares
10 Years	0.99	%
5 Years	6.32
1 Year	14.61

Series II shares’ inception date is April 30, 2004. Returns since that date are historical. All other returns are the blended returns of the historical performance of Series II shares since their inception and the restated historical performance of Series I shares (for periods prior to inception of Series II shares) adjusted to reflect the Rule 12b-1 fees applicable to Series II shares. The inception date of Series I shares is December 30, 1994. The performance of the Fund’s Series I and Series II share classes will differ primarily due to different class expenses.

     The performance data quoted represent past performance and cannot guarantee comparable future results; current performance may be lower or higher. Please contact your variable product issuer or financial adviser for the most recent month-end variable product performance. Performance figures reflect Fund expenses, reinvested distributions and changes in net asset value. Investment return and principal value will fluctuate so that you may have a gain or loss when you sell shares.

     The net annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 0.93% and 1.18%, respectively.^1,2 The total annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 0.96% and 1.21%, respectively. The expense ratios presented above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

     AIM V.I. Utilities Fund, a series portfolio of AIM Variable Insurance Funds, is currently offered through insurance companies issuing variable products. You cannot purchase shares of the Fund directly. Performance figures given represent the Fund and are not intended to reflect actual variable product values. They do not reflect sales charges, expenses and fees assessed in connection with a variable product. Sales charges, expenses and fees, which are determined by the variable product issuers, will vary and will lower the total return.

     The most recent month-end performance data at the Fund level, excluding variable product charges, is available on the Invesco Aim automated information line, 866 702 4402. As mentioned above, for the most recent month-end performance including variable product charges, please contact your variable product issuer or financial adviser.

1	Total annual operating expenses less any contractual fee waivers and/or expense reimbursements by the adviser in effect through at least April 30, 2011. See current prospectus for more information.
2	Total annual operating expenses less any contractual fee waivers and/or expense reimbursements by the adviser in effect through at least June 30, 2010. See current prospectus for more information.

AIM V.I. Utilities Fund

AIM V.I. Utilities Fund’s investment objectives are capital growth and income.

n Unless otherwise stated, information presented in this report is as of December 31, 2009, and is based on total net assets.

n Unless otherwise noted, all data provided by Invesco.

Principal risks of investing in the Fund

Prices of equity securities change in response to many factors, including the historical and prospective earnings of the issuer, the value of its assets, general economic conditions, interest rates, investor perceptions and market liquidity.

     Foreign securities have additional risks, including exchange rate changes, political and economic upheaval, relative lack of information, relatively low market liquidity, and the potential lack of strict financial and accounting controls and standards.

     Since a large percentage of the Fund’s assets may be invested in securities of a limited number of companies, each investment has a greater effect on the Fund’s overall performance, and any change in the value of those securities could significantly affect the value of your investment in the Fund.

     There is no guarantee that the investment techniques and risk analysis used by the Fund’s portfolio managers will produce the desired results.

     The prices of securities held by the Fund may decline in response to market risks.

     The Fund’s investments are concentrated in a comparatively narrow segment of the economy. Consequently, the Fund may tend to be more volatile than other mutual funds, and the value of the Fund’s investments may tend to rise and fall more rapidly.

     Government regulation, difficulty in obtaining adequate financing and investment return, environmental issues, fuel prices for generation of electricity, natural gas availability, power marketing and trading risks, and risks associated with nuclear power facilities may adversely affect the market value of the Fund’s holdings.

     Although the Fund’s return during certain periods was positively impacted by its investments in initial public offerings (IPOs), there can be no assurance that the Fund will have favorable IPO investment opportunities in the future.

About indexes used in this report

The S&P 500^® Index is an unmanaged index considered representative of the U.S. stock market.

     The Lipper VUF Utility Funds Category Average represents an average of all of the variable insurance underlying funds in the Lipper Utility Funds category.

     The S&P 500 Utilities Index is an unmanaged index considered representative of the utilities market. On May 1, 2010, the Fund will adopt the S&P 500 Utilities Index as its style-specific index because we believe it more closely reflects the performance of the type of securities in which the Fund invests.

     The Fund is not managed to track the performance of any particular index, including the indexes defined here, and consequently, the performance of the Fund may deviate significantly from the performance of the indexes.

     A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group reflects fund expenses; performance of a market index does not.

Other information

The Chartered Financial Analyst^® (CFA^®) designation is globally recognized and attests to a charterholder’s success in a rigorous and comprehensive study program in the field of investment management and research analysis.

     The returns shown in management’s discussion of Fund performance are based on net asset values calculated for shareholder transactions. Generally accepted accounting principles require adjustments to be made to the net assets of the Fund at period end for financial reporting purposes, and as such, the net asset values for shareholder transactions and the returns based on those net asset values may differ from the net asset values and returns reported in the Financial Highlights. Additionally, the returns and net asset values shown throughout this report are at the Fund level only and do not include variable product issuer charges. If such charges were included, the total returns would be lower.

     Industry classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s.

AIM V.I. Utilities Fund

Schedule of Investments^(a)

December 31, 2009

	Shares		Value
Common Stocks–94.65%
Electric Utilities–44.03%
American Electric Power Co., Inc.		75,518	$	2,627,271
Duke Energy Corp.		126,045		2,169,235
E.ON AG (Germany)		54,422		2,268,893
Edison International		82,310		2,862,742
Entergy Corp.		41,255		3,376,309
Exelon Corp.		48,299		2,360,372
FirstEnergy Corp.		66,755		3,100,770
FPL Group, Inc.		32,955		1,740,683
Northeast Utilities		51,749		1,334,607
Pepco Holdings, Inc.		145,565		2,452,770
Portland General Electric Co.		110,188		2,248,937
PPL Corp.		89,810		2,901,761
Southern Co.		72,731		2,423,397
				31,867,747
Gas Utilities–10.96%
AGL Resources Inc.		62,907		2,294,218
EQT Corp.		25,461		1,118,247
ONEOK, Inc.		58,078		2,588,537
Questar Corp.		28,969		1,204,241
UGI Corp.		29,949		724,466
				7,929,709
Independent Power Producers & Energy Traders–2.91%
NRG Energy, Inc.(b)		89,264		2,107,523
Integrated Telecommunication Services–5.10%
AT&T Inc.		61,369		1,720,173
Verizon Communications Inc.		59,436		1,969,115
				3,689,288
Multi-Utilities–28.08%
CMS Energy Corp.		203,799		3,191,492
Dominion Resources, Inc.		77,162		3,003,145
National Grid PLC (United Kingdom)		219,056		2,395,522
PG&E Corp.		71,277		3,182,518
Public Service Enterprise Group Inc.		65,172		2,166,969
Sempra Energy		43,756		2,449,461
Wisconsin Energy Corp.		25,384		1,264,885
Xcel Energy, Inc.		125,730		2,667,991
				20,321,983
Oil & Gas Storage & Transportation–3.57%
El Paso Corp.		83,283		818,672
Williams Cos., Inc. (The)		83,881		1,768,211
				2,586,883
Total Common Stocks (Cost $58,534,199)				68,503,133
Money Market Funds–5.14%
Liquid Assets Portfolio–Institutional Class(c)		1,859,705		1,859,705
Premier Portfolio–Institutional Class(c)		1,859,705		1,859,705
Total Money Market Funds (Cost $3,719,410)				3,719,410
TOTAL INVESTMENTS–99.79% (Cost $62,253,609)				72,222,543
OTHER ASSETS LESS LIABILITIES–0.21%				150,513
NET ASSETS–100.00%			$	72,373,056

Notes to Schedule of Investments:

(a)	Industry and/or sector classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s.
(b)	Non-income producing security.
(c)	The money market fund and the Fund are affiliated by having the same investment adviser.

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

AIM V.I. Utilities Fund

Statement of Assets and Liabilities

December 31, 2009

Assets:
Investments, at value (Cost $58,534,199)	$	68,503,133
Investments in affiliated money market funds, at value and cost		3,719,410
Total investments, at value (Cost $62,253,609)		72,222,543
Receivables for:
Fund shares sold		24,072
Dividends		272,611
Investment for trustee deferred compensation and retirement plans		33,862
Total assets		72,553,088
Liabilities:
Payables for:
Fund shares reacquired		44,903
Amount due custodian		14,758
Accrued fees to affiliates		44,079
Accrued other operating expenses		30,401
Trustee deferred compensation and retirement plans		45,891
Total liabilities		180,032
Net assets applicable to shares outstanding	$	72,373,056
Net assets consist of:
Shares of beneficial interest	$	64,041,081
Undistributed net investment income		2,314,631
Undistributed net realized gain (loss)		(3,957,446	)
Unrealized appreciation		9,974,790
	$	72,373,056
Net Assets:
Series I	$	70,671,028
Series II	$	1,702,028
Shares outstanding, $0.001 par value per share, unlimited number of shares authorized:
Series I		4,871,631
Series II		117,988
Series I:
Net asset value per share	$	14.51
Series II:
Net asset value per share	$	14.43

Statement of Operations

For the year ended December 31, 2009

Investment income:
Dividends (net of foreign withholding taxes of $17,771)	$	3,015,008
Dividends from affiliated money market funds		7,676
Total investment income		3,022,684
Expenses:
Advisory fees		423,507
Administrative services fees		208,871
Custodian fees		8,163
Distribution fees — Series II		3,931
Transfer agent fees		19,390
Trustees’ and officers’ fees and benefits		22,345
Professional services fees		40,280
Other		10,215
Total expenses		736,702
Less: Fees waived		(79,410	)
Net expenses		657,292
Net investment income		2,365,392
Realized and unrealized gain (loss) from:
Net realized gain (loss) from:
Investment securities		(3,578,691	)
Foreign currencies		12,432
		(3,566,259	)
Change in net unrealized appreciation of:
Investment securities		9,981,917
Foreign currencies		921
		9,982,838
Net realized and unrealized gain		6,416,579
Net increase in net assets resulting from operations	$	8,781,971

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

AIM V.I. Utilities Fund

Statement of Changes in Net Assets

For the years ended December 31, 2009 and 2008

	2009			2008
Operations:
Net investment income	$	2,365,392		$	3,211,845
Net realized gain (loss)		(3,566,259	)		1,506,366
Change in net unrealized appreciation (depreciation)		9,982,838			(52,819,002	)
Net increase (decrease) in net assets resulting from operations		8,781,971			(48,100,791	)
Distributions to shareholders from net investment income:
Series I		(3,146,581	)		(2,992,914	)
Series II		(69,727	)		(56,469	)
Total distributions from net investment income		(3,216,308	)		(3,049,383	)
Distributions to shareholders from net realized gains:
Series I		(793,124	)		(10,996,910	)
Series II		(19,073	)		(235,824	)
Total distributions from net realized gains		(812,197	)		(11,232,734	)
Share transactions-net:
Series I		(14,677,265	)		(13,874,354	)
Series II		(124,013	)		(362,485	)
Net increase (decrease) in net assets resulting from share transactions		(14,801,278	)		(14,236,839	)
Net increase (decrease) in net assets		(10,047,812	)		(76,619,747	)
Net assets:
Beginning of year		82,420,868			159,040,615
End of year (includes undistributed net investment income of $2,314,631 and $3,155,248, respectively)	$	72,373,056		$	82,420,868

Notes to Financial Statements

December 31, 2009

NOTE 1—Significant Accounting Policies

AIM V.I. Utilities Fund (the “Fund”) is a series portfolio of AIM Variable Insurance Funds (the “Trust”). The Trust is a Delaware statutory trust registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end series management investment company consisting of twenty-one separate portfolios, (each constituting a “Fund”). The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Matters affecting each Fund or class will be voted on exclusively by the shareholders of such Fund or class. Current Securities and Exchange Commission (“SEC”) guidance, however, requires participating insurance companies offering separate accounts to vote shares proportionally in accordance with the instructions of the contract owners whose investments are funded by shares of each Fund or class.

  The Fund’s investment objectives are capital growth and income.

  The Fund currently offers two classes of shares, Series I and Series II, both of which are offered to insurance company separate accounts funding variable annuity contracts and variable life insurance policies (“variable products”).

  The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements.

A.

Security Valuations — Securities, including restricted securities, are valued according to the following policy.

A security listed or traded on an exchange (except convertible bonds) is valued at its last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales or official closing price on a particular day, the security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based on prices furnished by independent pricing services or market makers. When such securities are valued by an independent pricing service they may be considered fair valued. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean between the last bid and ask prices from the exchange on which they are principally traded. Options not listed on an exchange are valued by an independent source at the mean between the last bid and ask prices. For purposes of determining net asset value per share, futures and option contracts generally are valued 15 minutes after the close of the customary trading session of the New York Stock Exchange (“NYSE”).

AIM V.I. Utilities Fund

	Investments in open-end and closed-end registered investment companies that do not trade on an exchange are valued at the end of day net asset value per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded.
	Debt obligations (including convertible bonds) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution-size trading in similar groups of securities, developments related to specific securities, dividend rate, yield, quality, type of issue, coupon rate, maturity, individual trading characteristics and other market data. Short-term obligations, including commercial paper, having 60 days or less to maturity are recorded at amortized cost which approximates value. Debt securities are subject to interest rate and credit risks. In addition, all debt securities involve some risk of default with respect to interest and/or principal payments.
	Foreign securities (including foreign exchange contracts) are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the NYSE. If market quotations are available and reliable for foreign exchange traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that are significant and make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economical upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
	Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities and Corporate Loans. The mean between the last bid and asked prices may be used to value debt obligations other than Corporate Loans.
	Securities for which market quotations are not readily available or are unreliable are valued at fair value as determined in good faith by or under the supervision of the Trust’s officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a security’s fair value.
	Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
B.	Securities Transactions and Investment Income — Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income is recorded on the accrual basis from settlement date. Dividend income is recorded on the ex-dividend date.
	The Fund may periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain/loss for investments no longer held and as unrealized gain/loss for investments still held.
	Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the realized and unrealized net gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the Fund’s net asset value and, accordingly, they reduce the Fund’s total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in the Statement of Operations and Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the adviser.
	The Fund allocates income and realized and unrealized capital gains and losses to a class based on the relative net assets of each class.
C.	Country Determination — For the purposes of making investment selection decisions and presentation in the Schedule of Investments, the investment adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuer’s securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted.
D.	Distributions — Distributions from income and net realized capital gain, if any, are generally paid to separate accounts of participating insurance companies annually and recorded on ex-dividend date.
E.	Federal Income Taxes — The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code necessary to qualify as a regulated investment company and to distribute substantially all of the Fund’s taxable earnings to shareholders. As such, the Fund will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements.

AIM V.I. Utilities Fund

	The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.
F.	Expenses — Fees provided for under the Rule 12b-1 plan of a particular class of the Fund and which are directly attributable to that class are charged to the operations of such class. All other expenses are allocated among the classes based on relative net assets.
G.	Accounting Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print, which is generally 45 days from the period-end date.
H.	Indemnifications — Under the Trust’s organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Fund’s servicing agreements, that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote.
I.	Other Risks — The Fund’s investments are concentrated in a comparatively narrow segment of the economy. Consequently, the Fund may tend to be more volatile than other mutual funds, and the value of the Fund’s investments may tend to rise and fall more rapidly.
	The Fund may invest a large percentage of assets in securities of a limited number of companies, such that each investment may have a greater effect on the Fund’s overall performance, and any change in the value of those securities could significantly affect the value of your investment in the Fund.
	Government regulation, difficulties in obtaining adequate financing and investment return, environmental issues, prices of fuel for generation of electricity, availability of natural gas, risks associated with power marketing and trading, and risks associated with nuclear power facilities may adversely affect the market value of the Fund’s holdings.
J.	Foreign Currency Translations — Foreign currency is valued at the close of the NYSE based on quotations posted by banks and major currency dealers. Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at date of valuation. Purchases and sales of portfolio securities (net of foreign taxes withheld on disposition) and income items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. The Fund does not separately account for the portion of the results of operations resulting from changes in foreign exchange rates on investments and the fluctuations arising from changes in market prices of securities held. The combined results of changes in foreign exchange rates and the fluctuation of market prices on investments (net of estimated foreign tax withholding) are included with the net realized and unrealized gain or loss from investments in the Statement of Operations. Reported net realized foreign currency gains or losses arise from (i) sales of foreign currencies, (ii) currency gains or losses realized between the trade and settlement dates on securities transactions, and (iii) the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign currency gains and losses arise from changes in the fair values of assets and liabilities, other than investments in securities at fiscal period end, resulting from changes in exchange rates.
	The Fund may invest in foreign securities which may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable.
K.	Foreign Currency Contracts — The Fund may enter into foreign currency contracts to manage or minimize currency or exchange rate risk. The Fund may also enter into foreign currency contracts for the purchase or sale of a security denominated in a foreign currency in order to “lock in” the U.S. dollar price of that security. A foreign currency contract is an obligation to purchase or sell a specific currency for an agreed-upon price at a future date. The use of foreign currency contracts does not eliminate fluctuations in the price of the underlying securities the Fund owns or intends to acquire but establishes a rate of exchange in advance. Fluctuations in the value of these contracts are measured by the difference in the contract date and reporting date exchange rates and are recorded as unrealized appreciation (depreciation) until the contracts are closed. When the contracts are closed, realized gains (losses) are recorded. Realized and unrealized gains (losses) on the contracts are included in the Statement of Operations. The primary risks associated with foreign currency contracts include failure of the counterparty to meet the terms of the contract and the value of the foreign currency changing unfavorably. These risks may be in excess of the amounts reflected in the Statement of Assets and Liabilities.

NOTE 2—Advisory Fees and Other Fees Paid to Affiliates

The Trust has entered into a master investment advisory agreement with Invesco Advisers, Inc. (the “Adviser” or “Invesco”). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Adviser based on the annual rate of 0.60% of the Fund’s average daily net assets.

  Under the terms of a master sub-advisory agreement approved by shareholders of the Funds between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Trimark Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Funds, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide discretionary investment management services to each Fund based on the percentage of assets allocated to such Sub-Adviser(s).

  On December 31, 2009, Invesco Aim Advisers, Inc., Invesco Aim Capital Management, Inc., Invesco Private Asset Management, Inc. and Invesco Global Asset Management (N.A.), Inc. merged into Invesco Institutional (N.A.), Inc. and the consolidated adviser firm was renamed Invesco Advisers, Inc.

  The Adviser has contractually agreed to waive advisory fees and/or reimburse expenses of all shares to the extent necessary to limit total annual fund operating expenses after fee waiver (excluding certain items discussed below) of Series I shares to 0.93% and Series II shares to 1.18% of average daily net assets, through at least April 30, 2011. In determining the Adviser’s obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the total annual fund operating expenses after fee waiver to exceed the numbers reflected above: (1) interest; (2) taxes;

AIM V.I. Utilities Fund

(3) dividend expense on short sales; (4) extraordinary items or non-routine items; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. The Board of Trustees or Invesco may terminate the fee waiver arrangement at any time.

  Further, the Adviser has contractually agreed, through at least June 30, 2010, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash in such affiliated money market funds.

  For the year ended December 31, 2009, the Adviser waived advisory fees of $79,410.

  At the request of the Trustees of the Trust, Invesco Ltd. agreed to reimburse expenses incurred by the Fund in connection with market timing matters in the AIM Funds, which may include legal, audit, shareholder reporting, communications and trustee expenses. For the year ended December 31, 2009, Invesco Ltd. did not reimburse any expenses.

  The Trust has entered into a master administrative services agreement with Invesco pursuant to which the Fund has agreed to pay Invesco a fee for costs incurred in providing accounting services and fund administrative services to the Fund and to reimburse Invesco for administrative services fees paid to insurance companies that have agreed to provide services to the participants of separate accounts. These administrative services provided by the insurance companies may include, among other things: the printing of prospectuses, financial reports and proxy statements and the delivery of the same to existing participants; the maintenance of master accounts; the facilitation of purchases and redemptions requested by the participants; and the servicing of participants’ accounts. Pursuant to such agreement, for the year ended December 31, 2009, Invesco was paid $50,000 for accounting and fund administrative services and reimbursed $158,871 for services provided by insurance companies.

  The Trust has entered into a transfer agency and service agreement with Invesco Aim Investment Services, Inc. (“IAIS”) pursuant to which the Fund has agreed to pay IAIS a fee for providing transfer agency and shareholder services to the Fund and reimburse IAIS for certain expenses incurred by IAIS in the course of providing such services. For the year ended December 31, 2009, expenses incurred under the agreement are shown in the Statement of Operations as transfer agent fees.

  The Trust has entered into a master distribution agreement with Invesco Aim Distributors, Inc. (“IADI”) to serve as the distributor for the Fund. The Trust has adopted a plan pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund’s Series II shares (the “Plan”). The Fund, pursuant to the Plan, pays IADI compensation at the annual rate of 0.25% of the Fund’s average daily net assets of Series II shares. Of the Plan payments, up to 0.25% of the average daily net assets of the Series II shares may be paid to insurance companies who furnish continuing personal shareholder services to customers who purchase and own Series II shares of the Fund. For the year ended December 31, 2009, expenses incurred under the Plan are detailed in the Statement of Operations as distribution fees.

  Certain officers and trustees of the Trust are officers and directors of Invesco, IAIS and/or IADI.

NOTE 3—Additional Valuation Information

Generally Accepted Accounting Principles (“GAAP”) defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3) generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment’s assigned level:

Level 1 —	Prices are determined using quoted prices in an active market for identical assets.
Level 2 —	Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk and others.
Level 3 —	Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information.

  The following is a summary of the tiered valuation input levels, as of December 31, 2009. The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.

	Level 1		Level 2		Level 3		Total
Equity Securities	$	67,558,128	$	4,664,415	$	—	$	72,222,543

NOTE 4—Trustees’ and Officers’ Fees and Benefits

“Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and “Trustees’ and Officers’ Fees and Benefits” also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various AIM Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees are eligible to participate in a retirement plan that provides for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former Trustees who also participate in a retirement plan

AIM V.I. Utilities Fund

and receive benefits under such plan. “Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund.

  During the year ended December 31, 2009, the Fund paid legal fees of $2,943 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A member of that firm is a Trustee of the Trust.

NOTE 5—Cash Balances

The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with The State Street Bank and Trust Company, the custodian bank. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (i) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (ii) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.

NOTE 6—Distributions to Shareholders and Tax Components of Net Assets

Tax Character of Distributions to Shareholders Paid During the Years Ended December 31, 2009 and 2008:

	2009		2008
Ordinary income	$	3,218,442	$	3,099,788
Long-term capital gain		810,063		11,182,329
Total distributions	$	4,028,505	$	14,282,117

Tax Components of Net Assets at Period-End:

	2009
Undistributed ordinary income	$	2,362,820
Net unrealized appreciation — investments		9,656,738
Net unrealized appreciation — other investments		5,856
Temporary book/tax differences		(48,189	)
Capital loss carryforward		(3,645,250	)
Shares of beneficial interest		64,041,081
Total net assets	$	72,373,056

  The difference between book-basis and tax-basis unrealized appreciation (depreciation) is due to differences in the timing of recognition of gains and losses on investments for tax and book purposes. The Fund’s net unrealized appreciation difference is attributable primarily to wash sales.

  The temporary book/tax differences are a result of timing differences between book and tax recognition of income and/or expenses. The Fund’s temporary book/tax differences are the result of the trustee deferral of compensation and retirement plan benefits.

  Capital loss carryforward is calculated and reported as of a specific date. Results of transactions and other activity after that date may affect the amount of capital loss carryforward actually available for the Fund to utilize. The ability to utilize capital loss carryforward in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.

  The Fund has a capital loss carryforward as of December 31, 2009 which expires as follows:

	Capital Loss
Expiration	Carryforward*
December 31, 2017	$	3,645,250

*  Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code.

NOTE 7—Investment Securities

The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the year ended December 31, 2009 was $9,260,915 and $28,070,307, respectively. Cost of investments on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed Federal income tax reporting period-end.

Unrealized Appreciation (Depreciation) of Investment Securities on a Tax Basis
Aggregate unrealized appreciation of investment securities	$	12,786,794
Aggregate unrealized (depreciation) of investment securities		(3,130,056	)
Net unrealized appreciation of investment securities	$	9,656,738
Cost of investments for tax purposes is $62,565,805.

AIM V.I. Utilities Fund

NOTE 8—Reclassification of Permanent Differences

Primarily as a result of differing book/tax treatment of expired capital loss carryforward and net operating losses, on December 31, 2009, undistributed net investment income was increased by $10,299, undistributed net realized gain (loss) was increased by $909,343 and shares of beneficial interest decreased by $919,642. This reclassification had no effect on the net assets of the Fund.

NOTE 9—Share Information

	Summary of Share Activity
	Year ended December 31,
	2009(a)						2008
	Shares			Amount			Shares			Amount
Sold:
Series I		609,839		$	8,004,977			1,346,697		$	28,997,020
Series II		12,671			166,300			26,485			551,996
Issued as reinvestment of dividends:
Series I		276,664			3,939,705			1,077,799			13,989,824
Series II		6,267			88,800			22,659			292,293
Reacquired:
Series I		(2,046,142	)		(26,621,947	)		(2,890,405	)		(56,861,198	)
Series II		(30,065	)		(379,113	)		(58,398	)		(1,206,774	)
Net increase (decrease) in share activity		(1,170,766	)	$	(14,801,278	)		(475,163	)	$	(14,236,839	)

^(a) There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 58% of the outstanding shares of the Fund. The Fund and the Fund’s principal underwriter or adviser, are parties to participation agreements with these entities whereby these entities sell units of interest in separate accounts funding variable products that are invested in the Fund. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as, securities brokerage, third party record keeping and account servicing and administrative services. The Trust has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially.

AIM V.I. Utilities Fund

NOTE 10—Financial Highlights

The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.

																											Ratio of			Ratio of
																											expenses			expenses
					Net gains																						to average			to average net			Ratio of net
	Net asset				(losses) on						Dividends			Distributions													net assets			assets without			investment
	value,		Net		securities (both			Total from			from net			from net						Net asset					Net assets,		with fee waivers			fee waivers			income
	beginning		investment		realized and			investment			investment			realized			Total			value, end		Total			end of period		and/or expenses			and/or expenses			to average			Portfolio
	of period		income(a)		unrealized)			operations			income			gains			Distributions			of period		Return(b)			(000s omitted)		absorbed			absorbed			net assets			turnover(c)
Series I
Year ended 12/31/09	$	13.38	$	0.45	$	1.53		$	1.98		$	(0.68	)	$	(0.17	)	$	(0.85	)	$	14.51		14.93	%	$	70,671		0.93	%(d)		1.04	%(d)		3.35	%(d)		14	%
Year ended 12/31/08		23.97		0.52		(8.36	)		(7.84	)		(0.59	)		(2.16	)		(2.75	)		13.38		(32.35	)		80,704		0.93			0.96			2.53			15
Year ended 12/31/07		21.23		0.47		3.94			4.41			(0.47	)		(1.20	)		(1.67	)		23.97		20.64			155,748		0.93			0.94			1.97			30
Year ended 12/31/06		17.83		0.47		4.06			4.53			(0.70	)		(0.43	)		(1.13	)		21.23		25.46			139,080		0.93			0.96			2.40			38
Year ended 12/31/05		15.61		0.42		2.21			2.63			(0.41	)		—			(0.41	)		17.83		16.83			114,104		0.93			0.96			2.49			49
Series II
Year ended 12/31/09		13.30		0.41		1.52			1.93			(0.63	)		(0.17	)		(0.80	)		14.43		14.61			1,702		1.18	(d)		1.29	(d)		3.10	(d)		14
Year ended 12/31/08		23.80		0.46		(8.28	)		(7.82	)		(0.52	)		(2.16	)		(2.68	)		13.30		(32.51	)		1,717		1.18			1.21			2.28			15
Year ended 12/31/07		21.12		0.41		3.91			4.32			(0.44	)		(1.20	)		(1.64	)		23.80		20.32			3,293		1.18			1.19			1.72			30
Year ended 12/31/06		17.76		0.42		4.06			4.48			(0.69	)		(0.43	)		(1.12	)		21.12		25.25			2,462		1.18			1.21			2.15			38
Year ended 12/31/05		15.57		0.38		2.20			2.58			(0.39	)		—			(0.39	)		17.76		16.55			801		1.18			1.21			2.24			49

(a)	Calculated using average shares outstanding.
(b)	Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Total returns do not reflect charges assessed in connection with a variable product, which if included would reduce total returns.
(c)	Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable.
(d)	Ratios are based on average daily net assets (000’s omitted) of $69,012 and $1,572 for Series I and Series II shares, respectively.

AIM V.I. Utilities Fund

Report of Independent Registered Public Accounting Firm

To the Board of Trustees of AIM Variable Insurance Funds

and Shareholders of AIM V. I. Utilities Fund:

In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of AIM V.I. Utilities Fund, (one of the funds constituting AIM Variable Insurance Funds, hereafter referred to as the “Fund”) at December 31, 2009, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at December 31, 2009 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.

PRICEWATERHOUSECOOPERS LLP

February 10, 2010

Houston, Texas

AIM V.I. Utilities Fund

Calculating your ongoing Fund expenses

Example

As a shareholder of the Fund, you incur ongoing costs, including management fees; distribution and/or service fees (12b-1); and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period July 1, 2009 through December 31, 2009.

  The actual and hypothetical expenses in the examples below do not represent the effect of any fees or other expenses assessed in connection with a variable product; if they did, the expenses shown would be higher while the ending account values shown would be lower.

Actual expenses

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

Hypothetical example for comparison purposes

The table below also provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return.

  The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

  Please note that the expenses shown in the table are meant to highlight your ongoing costs. Therefore, the hypothetical information is useful in comparing ongoing costs, and will not help you determine the relative total costs of owning different funds.

							HYPOTHETICAL
							(5% annual return before
			ACTUAL				expenses)
	Beginning		Ending		Expenses		Ending		Expenses		Annualized
	Account Value		Account Value		Paid During		Account Value		Paid During		Expense
Class	(07/01/09)		(12/31/09)1		Period2		(12/31/09)		Period2		Ratio
Series I	$	1,000.00	$	1,146.70	$	5.03	$	1,020.52	$	4.74		0.93	%
Series II		1,000.00		1,145.20		6.38		1,019.26		6.01		1.18

1	The actual ending account value is based on the actual total return of the Fund for the period July 1, 2009 through December 31, 2009, after actual expenses and will differ from the hypothetical ending account value which is based on the Fund’s expense ratio and a hypothetical annual return of 5% before expenses.
2	Expenses are equal to the Fund’s annualized expense ratio as indicated above multiplied by the average account value over the period, multiplied by 184/365 to reflect the most recent fiscal half year.

AIM V.I. Utilities Fund

Tax Information

Form 1099-DIV, Form 1042-S and other year-end tax information provide shareholders with actual calendar year amounts that should be included in their tax returns. Shareholders should consult their tax advisers.

  The following distribution information is being provided as required by the Internal Revenue Code or to meet a specific state’s requirement.

  The Fund designates the following amounts or, if subsequently determined to be different, the maximum amount allowable for its fiscal year ended December 31, 2009:

Federal and State Income Tax
Long-Term Capital Gain Dividends	$	810,063
Corporate Dividends Received Deduction*		100.00%

*  The above percentage is based on ordinary income dividends paid to shareholders during the Fund’s fiscal year.

AIM V.I. Utilities Fund

Trustees and Officers

The address of each trustee and officer of AIM Variable Insurance Funds (the “Trust”), is 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173. Each trustee oversees 105 portfolios in the AIM Funds complex. The trustees serve for the life of the Trust, subject to their earlier death, incapacitation, resignation, retirement or removal as more specifically provided in the Trust’s organizational documents. Each officer serves for a one year term or until their successors are elected and qualified. Column two below includes length of time served with predecessor entities, if any.

	Trustee and/
Name, Year of Birth and	or Officer	Principal Occupation(s)	Other Directorship(s)
Position(s) Held with the Trust	Since	During Past 5 Years	Held by Trustee
Interested Persons
Martin L. Flanagan1 — 1960 Trustee	2007	Executive Director, Chief Executive Officer and President, Invesco Ltd. (ultimate parent of Invesco Aim and a global investment management firm); Adviser to the Board, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Trustee, The AIM Family of Funds®; Board of Governors, Investment Company Institute; and Member of Executive Board, SMU Cox School of Business	None
		Formerly: Chairman, Invesco Aim Advisors, Inc. (registered investment adviser); Director, Chairman, Chief Executive Officer and President, IVZ Inc. (holding company), INVESCO Group Services, Inc. (service provider) and Invesco North American Holdings, Inc. (holding company); Director, Chief Executive Officer and President, Invesco Holding Company Limited (parent of Invesco Aim and a global investment management firm); Director, Invesco Ltd.; Chairman and Vice Chairman, Investment Company Institute
Philip A. Taylor2 — 1954 Trustee, President and Principal Executive Officer	2006	Head of North American Retail and Senior Managing Director, Invesco Ltd.; Director, Co-Chairman, Co-President and Co- Chief Executive Officer, Invesco Advisers, inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Director, Chief Executive Officer and President, Invesco Aim Advisors, Inc. and 1371 Preferred Inc. (holding company); Director, Chairman, Chief Executive Officer and President, Invesco Aim Management Group, Inc. (financial services holding company); Director, Co-Chairman, Co-President and Co-Chief Executive Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Director and President, INVESCO Funds Group, Inc. (registered investment adviser and registered transfer agent) and AIM GP Canada Inc. (general partner for limited partnerships); Director, Invesco Aim Distributors, Inc. (registered broker dealer); Director and Chairman, Invesco Aim Investment Services, Inc. (registered transfer agent) and INVESCO Distributors, Inc. (registered broker dealer); Director, President and Chairman, INVESCO Inc. (holding company) and Invesco Canada Holdings Inc. (holding company); Chief Executive Officer, AIM Trimark Corporate Class Inc. (corporate mutual fund company) and AIM Trimark Canada Fund Inc. (corporate mutual fund company); Director and Chief Executive Officer, Invesco Trimark Ltd./Invesco Trimark Ltèe (registered investment adviser and registered transfer agent) and Invesco Trimark Dealer Inc. (registered broker dealer); Trustee, President and Principal Executive Officer, The AIM Family of Funds® (other than AIM Treasurer’s Series Trust and Short-Term Investments Trust); Trustee and Executive Vice President, The AIM Family of Funds® (AIM Treasurer’s Series Trust and Short-Term Investments Trust only); and Manager, Invesco PowerShares Capital Management LLC	None
		Formerly: Manager, Invesco PowerShares Capital Management LLC; Director, Chief Executive Officer and President, Invesco Aim Advisors, Inc.; Director, Chairman, Chief Executive Officer and President, Invesco Aim Capital Management, Inc.; President, Invesco Trimark Dealer Inc. and Invesco Trimark Ltd./Invesco Trimark Ltèe; Director and President, AIM Trimark Corporate Class Inc. and AIM Trimark Canada Fund Inc.; Senior Managing Director, Invesco Holding Company Limited; Trustee and Executive Vice President, Tax-Free Investments Trust; Director and Chairman, Fund Management Company (former registered broker dealer); President and Principal Executive Officer, The AIM Family of Funds® (AIM Treasurer’s Series Trust, Short-Term Investments Trust and Tax-Free Investments Trust only); President, AIM Trimark Global Fund Inc. and AIM Trimark Canada Fund Inc.
Independent Trustees
Bruce L. Crockett — 1944 Trustee and Chair	1993	Chairman, Crockett Technology Associates (technology consulting company)	ACE Limited (insurance company); Captaris, Inc. (unified messaging provider); and Investment Company Institute
Bob R. Baker — 1936 Trustee	2004	Retired	None
Frank S. Bayley — 1939 Trustee	2001	Retired Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios)	None
James T. Bunch — 1942 Trustee	2004	Founder, Green, Manning & Bunch Ltd., (investment banking firm)	Board of Governors, Western Golf Association/Evans Scholars Foundation and Executive Committee, United States Golf Association
Albert R. Dowden — 1941 Trustee	2000	Director of a number of public and private business corporations, including the Boss Group, Ltd. (private investment and management); Reich & Tang Funds (registered investment company); and Homeowners of America Holding Corporation/Homeowners of America Insurance Company (property casualty company)	Board of Nature’s Sunshine Products, Inc.
		Formerly: Director, Continental Energy Services, LLC (oil and gas pipeline service); Director, CompuDyne Corporation (provider of product and services to the public security market) and Director, Annuity and Life Re (Holdings), Ltd. (reinsurance company); Director, President and Chief Executive Officer, Volvo Group North America, Inc.; Senior Vice President, AB Volvo; Director of various public and private corporations
Jack M. Fields — 1952 Trustee	1997	Chief Executive Officer, Twenty First Century Group, Inc. (government affairs company); and Owner and Chief Executive Officer, Dos Angelos Ranch, L.P. (cattle, hunting, corporate entertainment), Discovery Global Education Fund (non-profit) and Cross Timbers Quail Research Ranch (non-profit)	Administaff
		Formerly: Chief Executive Officer, Texana Timber LP (sustainable forestry company)
Carl Frischling — 1937 Trustee	1993	Partner, law firm of Kramer Levin Naftalis and Frankel LLP	Director, Reich & Tang Funds (16 portfolios)
Prema Mathai-Davis — 1950 Trustee	1998	Retired	None
Lewis F. Pennock — 1942 Trustee	1993	Partner, law firm of Pennock & Cooper	None
Larry Soll — 1942 Trustee	2004	Retired	None
Raymond Stickel, Jr. — 1944 Trustee	2005	Retired Formerly: Director, Mainstay VP Series Funds, Inc. (25 portfolios)	None

1	Mr. Flanagan is considered an interested person of the Trust because he is an officer of the adviser to the Trust, and an officer and a director of Invesco Ltd., ultimate parent of the adviser to the Trust.
2	Mr. Taylor is considered an interested person of the Trust because he is an officer and a director of the adviser to, and a director of the principal underwriter of, the Trust.

T-1

Trustees and Officers — (continued)

	Trustee and/
Name, Year of Birth and	or Officer	Principal Occupation(s)	Other Directorship(s)
Position(s) Held with the Trust	Since	During Past 5 Years	Held by Trustee
Other Officers
Russell C. Burk — 1958 Senior Vice President and Senior Officer	2005	Senior Vice President and Senior Officer of The AIM Family of Funds®	N/A
John M. Zerr — 1962 Senior Vice President, Chief Legal Officer and Secretary	2006	Director, Senior Vice President, Secretary and General Counsel, Invesco Aim Management Group, Inc., Senior Vice President, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Director, Senior Vice President and Secretary, Invesco Aim Distributors, Inc.; Director, Vice President and Secretary, Invesco Aim Investment Services, Inc. and INVESCO Distributors, Inc.; Director and Vice President, INVESCO Funds Group, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The AIM Family of Funds®; and Manager, Invesco PowerShares Capital Management LLC	N/A
		Formerly: Director, Senior Vice President, General Counsel and Secretary, Invesco Aim Advisors, Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco Aim Capital Management, Inc.; Chief Operating Officer and General Counsel, Liberty Ridge Capital, Inc. (an investment adviser); Vice President and Secretary, PBHG Funds (an investment company) and PBHG Insurance Series Fund (an investment company); Chief Operating Officer, General Counsel and Secretary, Old Mutual Investment Partners (a broker-dealer); General Counsel and Secretary, Old Mutual Fund Services (an administrator) and Old Mutual Shareholder Services (a shareholder servicing center); Executive Vice President, General Counsel and Secretary, Old Mutual Capital, Inc. (an investment adviser); and Vice President and Secretary, Old Mutual Advisors Funds (an investment company)
Lisa O. Brinkley — 1959 Vice President	2004	Global Compliance Director, Invesco Ltd.; Chief Compliance Officer, Invesco Aim Distributors, Inc. and Invesco Aim Investment Services, Inc.; and Vice President, The AIM Family of Funds®	N/A
		Formerly: Senior Vice President, Invesco Aim Management Group, Inc.; Senior Vice President and Chief Compliance Officer, Invesco Aim Advisors, Inc. and The AIM Family of Funds®; Vice President and Chief Compliance Officer, Invesco Aim Capital Management, Inc. and Invesco Aim Distributors, Inc.; Vice President, Invesco Aim Investment Services, Inc. and Fund Management Company
Kevin M. Carome — 1956 Vice President	2003	General Counsel, Secretary and Senior Managing Director, Invesco Ltd.; Director, Invesco Holding Company Limited and INVESCO Funds Group, Inc.; Director and Executive Vice President, IVZ, Inc., Invesco Group Services, Inc., Invesco North American Holdings, Inc. and Invesco Investments (Bermuda) Ltd.; Director and Secretary, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); and Vice President, The AIM Family of Funds®	N/A
		Formerly: Senior Managing Director and Secretary, Invesco North American Holdings, Inc.; Vice President and Secretary, IVZ, Inc. and Invesco Group Services, Inc.; Senior Managing Director and Secretary, Invesco Holding Company Limited; Director, Senior Vice President, Secretary and General Counsel, Invesco Aim Management Group, Inc. and Invesco Aim Advisors, Inc.; Senior Vice President, Invesco Aim Distributors, Inc.; Director, General Counsel and Vice President, Fund Management Company; Vice President, Invesco Aim Capital Management, Inc. and Invesco Aim Investment Services, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The AIM Family of Funds®; Director and Vice President, INVESCO Distributors, Inc.; and Chief Executive Officer and President, INVESCO Funds Group, Inc.
Sheri Morris — 1964 Vice President, Treasurer and Principal Financial Officer	1999	Vice President, Treasurer and Principal Financial Officer, The AIM Family of Funds®; and Vice President, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.) Formerly: Vice President, Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.; Assistant Vice President and Assistant Treasurer, The AIM Family of Funds® and Assistant Vice President, Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A
Karen Dunn Kelley — 1960 Vice President	1993	Head of Invesco’s World Wide Fixed Income and Cash Management Group; Senior Vice President, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Executive Vice President, Invesco Aim Distributors, Inc.; Senior Vice President, Invesco Aim Management Group, Inc.; and Director, Invesco Mortgage Capital Inc.; Vice President, The AIM Family of Funds® (other than AIM Treasurer’s Series Trust and Short-Term Investments Trust); and President and Principal Executive Officer, The AIM Family of Funds® (AIM Treasurer’s Series Trust and Short-Term Investments Trust only)	N/A
		Formerly: Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Director of Cash Management and Senior Vice President, Invesco Aim Advisors, Inc. and Invesco Aim Capital Management, Inc.; President and Principal Executive Officer, Tax-Free Investments Trust; Director and President, Fund Management Company; Chief Cash Management Officer, Director of Cash Management, Senior Vice President, and Managing Director, Invesco Aim Capital Management, Inc.; Director of Cash Management, Senior Vice President, and Vice President, Invesco Aim Advisors, Inc. and The AIM Family of Funds® (AIM Treasurer’s Series Trust, Short-Term Investments Trust and Tax-Free Investments Trust only)
Lance A. Rejsek — 1967 Anti-Money Laundering Compliance Officer	2005	Anti-Money Laundering Compliance Officer, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Invesco Aim Distributors, Inc., Invesco Aim Investment Services, Inc., and The AIM Family of Funds®	N/A
		Formerly: Anti-Money Laundering Compliance Officer, Fund Management Company, Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.
Todd L. Spillane — 1958 Chief Compliance Officer	2006	Senior Vice President, Invesco Aim Management Group, Inc.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Chief Compliance Officer, The AIM Family of Funds®, INVESCO Private Capital Investments, Inc. (holding company), Invesco Private Capital, Inc. (registered investment adviser) and Invesco Senior Secured Management, Inc. (registered investment adviser); Vice President, Invesco Aim Distributors, Inc. and Invesco Aim Investment Services, Inc.	N/A
		Formerly: Senior Vice President and Chief Compliance Officer, Invesco Aim Advisors, Inc. and Invesco Aim Capital Management, Inc.; Chief Compliance Officer, Invesco Global Asset Management (N.A.), Inc.; Vice President, Invesco Aim Capital Management, Inc. and Fund Management Company

The Statement of Additional Information of the Trust includes additional information about the Fund’s Trustees and is available upon request, without charge, by calling 1.800.959.4246. Please refer to the Fund’s prospectus for information on the Fund’s sub-advisers.

Office of the Fund 11 Greenway Plaza, Suite 100 Houston, TX 77046-1173	Investment Adviser Invesco Advisers, Inc. 1555 Peachtree Street, N.E. Atlanta, GA 30309	Distributor Invesco Aim Distributors, Inc. 11 Greenway Plaza, Suite 100 Houston, TX 77046-1173	Auditors PricewaterhouseCoopers LLP 1201 Louisiana Street, Suite 2900 Houston, TX 77002-5678
Counsel to the Fund Stradley Ronon Stevens & Young, LLP 2600 One Commerce Square Philadelphia, PA 19103	Counsel to the Independent Trustees Kramer, Levin, Naftalis & Frankel LLP 1177 Avenue of the Americas New York, NY 10036-2714	Transfer Agent Invesco Aim Investment Services, Inc. P.O. Box 4739 Houston, TX 77210-4739	Custodian State Street Bank and Trust Company 225 Franklin Boston, MA 02110-2801

T-2

ITEM 2. CODE OF ETHICS.

As of the end of the period covered by this report, the Registrant had adopted a code of ethics (the “Code”) that applies to the Registrant’s principal executive officer (“PEO”) and principal financial officer (“PFO”). There were no amendments to the Code during the period covered by the report. The Registrant did not grant any waivers, including implicit waivers, from any provisions of the Code to the PEO or PFO during the period covered by this report.

ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.

The Board of Trustees has determined that the Registrant has at least one audit committee financial expert serving on its Audit Committee. The Audit Committee financial expert is Raymond Stickel, Jr. Mr. Stickel is “independent” within the meaning of that term as used in Form N-CSR.

ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

Fees Billed by Principal Accountant Related to the Registrant

     PWC billed the Registrant aggregate fees for services rendered to the Registrant for the last two fiscal years as follows:

			Percentage of Fees					Percentage of Fees
			Billed Applicable to					Billed Applicable to
			Non-Audit Services					Non-Audit Services
	Fees Billed for		Provided for fiscal					Provided for fiscal
	Services Rendered to		year end 2009			Fees Billed for		year end 2008
	the Registrant for		Pursuant to Waiver of			Services Rendered to		Pursuant to Waiver of
	fiscal		Pre-Approval			the Registrant for		Pre-Approval
	year end 2009		Requirement(1)			fiscal year end 2008		Requirement(1)
Audit Fees	$	556,364		N/A		$	569,248		N/A
Audit-Related Fees(2)	$	0		0	%	$	5,500		0	%
Tax Fees(3)	$	75,879		0	%	$	85,297		0	%
All Other Fees	$	0		0	%	$	0		0	%
Total Fees	$	632,243		0	%	$	660,045		0	%

PWC billed the Registrant aggregate non-audit fees of $75,879 for the fiscal year ended 2009, and $90,797 for the fiscal year ended 2008, for non-audit services rendered to the Registrant.

(1)	With respect to the provision of non-audit services, the pre-approval requirement is waived pursuant to a de minimis exception if (i) such services were not recognized as non-audit services by the Registrant at the time of engagement, (ii) the aggregate amount of all such services provided is no more than 5% of the aggregate audit and non-audit fees paid by the Registrant during a fiscal year; and (iii) such services are promptly brought to the attention of the Registrant’s Audit Committee and approved by the Registrant’s Audit Committee prior to the completion of the audit.
(2)	Audit-Related Fees for the fiscal year ended December 31, 2008 includes fees billed for completing agreed-upon procedures related to reorganization transactions.
(3)	Tax Fees for the fiscal year end December 31, 2009 includes fees billed for reviewing tax returns and consultation services. Tax fees for fiscal year end December 31, 2008 includes fees billed for reviewing tax returns and consultation services.

Fees Billed by Principal Accountant Related to Invesco and Invesco Affiliates

     PWC billed Invesco Advisers, Inc. (“Invesco”), the Registrant’s adviser, and any entity controlling, controlled by or under common control with Invesco that provides ongoing services to the Registrant (“Invesco Affiliates”) aggregate fees for pre-approved non-audit services rendered to Invesco and Invesco Affiliates as follows:

	Fees Billed for Non-					Fees Billed for Non-
	Audit Services					Audit Services
	Rendered to Invesco		Percentage of Fees			Rendered to Invesco		Percentage of Fees
	and Invesco Affiliates		Billed Applicable to			and Invesco Affiliates		Billed Applicable to
	for fiscal year end		Non-Audit Services			for fiscal year end		Non-Audit Services
	2009 That Were		Provided for fiscal year			2008 That Were		Provided for fiscal year
	Required		end 2009 Pursuant to			Required		end 2008 Pursuant to
	to be Pre-Approved		Waiver of Pre-			to be Pre-Approved		Waiver of Pre-
	by the Registrant’s		Approval			by the Registrant’s		Approval
	Audit Committee		Requirement(1)			Audit Committee		Requirement(1)
Audit-Related Fees	$	0		0	%	$	0		0	%
Tax Fees	$	0		0	%	$	0		0	%
All Other Fees	$	0		0	%	$	0		0	%
Total Fees(2)	$	0		0	%	$	0		0	%

(1)	With respect to the provision of non-audit services, the pre-approval requirement is waived pursuant to a de minimis exception if (i) such services were not recognized as non-audit services by the Registrant at the time of engagement, (ii) the aggregate amount of all such services provided is no more than 5% of the aggregate audit and non-audit fees paid by the Registrant, Invesco and Invesco Affiliates during a fiscal year; and (iii) such services are promptly brought to the attention of the Registrant’s Audit Committee and approved by the Registrant’s Audit Committee prior to the completion of the audit.
(2)	Including the fees for services not required to be pre-approved by the registrant’s audit committee, PWC billed Invesco and Invesco Affiliates aggregate non-audit fees of $0 for the fiscal year ended 2009, and $0 for the fiscal year ended 2008, for non-audit services rendered to Invesco and Invesco Affiliates.
	The Audit Committee also has considered whether the provision of non-audit services that were rendered to Invesco and Invesco Affiliates that were not required to be pre-approved pursuant to SEC regulations, if any, is compatible with maintaining the principal accountant’s independence.

PRE-APPROVAL OF AUDIT AND NON-AUDIT SERVICES
POLICIES AND PROCEDURES
As adopted by the Audit Committees of
the AIM Funds (the “Funds”)
Last Amended September 18, 2006

Statement of Principles

Under the Sarbanes-Oxley Act of 2002 and rules adopted by the Securities and Exchange Commission (“SEC”) (“Rules”), the Audit Committees of the Funds’ (the “Audit Committee”) Board of Trustees (the “Board”) are responsible for the appointment, compensation and oversight of the work of independent accountants (an “Auditor”). As part of this responsibility and to assure that the Auditor’s independence is not impaired, the Audit Committees pre-approve the audit and non-audit services provided to the Funds by each Auditor, as well as all non-audit services provided by the Auditor to the Funds’ investment adviser and to affiliates of the adviser that provide ongoing services to the Funds (“Service Affiliates”) if the services directly impact the Funds’ operations or financial reporting. The SEC Rules also specify the types of services that an Auditor may not provide to its audit client. The following policies and procedures comply with the requirements for pre-approval and provide a mechanism by which management of the Funds may request and secure pre-approval of audit and non-audit services in an orderly manner with minimal disruption to normal business operations.

Proposed services either may be pre-approved without consideration of specific case-by-case services by the Audit Committees (“general pre-approval”) or require the specific pre-approval of the Audit Committees (“specific pre-approval”). As set forth in these policies and procedures, unless a type of service has received general pre-approval, it will require specific pre-approval by the Audit Committees. Additionally, any fees exceeding 110% of estimated pre-approved fee levels provided at the time the service was pre-approved will also require specific approval by the Audit Committees before payment is made. The Audit Committees will also consider the impact of additional fees on the Auditor’s independence when determining whether to approve any additional fees for previously pre-approved services.

The Audit Committees will annually review and generally pre-approve the services that may be provided by each Auditor without obtaining specific pre-approval from the Audit Committee. The term of any general pre-approval runs from the date of such pre-approval through September 30^th of the following year, unless the Audit Committees consider a different period and state otherwise. The Audit Committees will add to or subtract from the list of general pre-approved services from time to time, based on subsequent determinations.

The purpose of these policies and procedures is to set forth the guidelines to assist the Audit Committees in fulfilling their responsibilities.

Delegation

The Audit Committees may from time to time delegate pre-approval authority to one or more of its members who are Independent Trustees. All decisions to pre-approve a service by a delegated member shall be reported to the Audit Committee at its next quarterly meeting.

Audit Services

The annual audit services engagement terms will be subject to specific pre-approval of the Audit Committees. Audit services include the annual financial statement audit and other procedures such as tax provision work that is required to be performed by the independent auditor to be able to form an opinion on the Funds’ financial statements. The Audit Committee will obtain, review and consider sufficient information concerning the proposed Auditor to make a reasonable evaluation of the Auditor’s qualifications and independence.

In addition to the annual Audit services engagement, the Audit Committees may grant either general or specific pre-approval of other audit services, which are those services that only the independent auditor reasonably can provide. Other Audit services may include services such as issuing consents for the

inclusion of audited financial statements with SEC registration statements, periodic reports and other documents filed with the SEC or other documents issued in connection with securities offerings.

Non-Audit Services

The Audit Committees may provide either general or specific pre-approval of any non-audit services to the Funds and its Service Affiliates if the Audit Committees believe that the provision of the service will not impair the independence of the Auditor, is consistent with the SEC’s Rules on auditor independence, and otherwise conforms to the Audit Committee’s general principles and policies as set forth herein.

Audit-Related Services

“Audit-related services” are assurance and related services that are reasonably related to the performance of the audit or review of the Fund’s financial statements or that are traditionally performed by the independent auditor. Audit-related services include, among others, accounting consultations related to accounting, financial reporting or disclosure matters not classified as “Audit services”; assistance with understanding and implementing new accounting and financial reporting guidance from rulemaking authorities; and agreed-upon procedures related to mergers, compliance with ratings agency requirements and interfund lending activities.

Tax Services

“Tax services” include, but are not limited to, the review and signing of the Funds’ federal tax returns, the review of required distributions by the Funds and consultations regarding tax matters such as the tax treatment of new investments or the impact of new regulations. The Audit Committee will scrutinize carefully the retention of the Auditor in connection with a transaction initially recommended by the Auditor, the major business purpose of which may be tax avoidance or the tax treatment of which may not be supported in the Internal Revenue Code and related regulations. The Audit Committee will consult with the Funds’ Treasurer (or his or her designee) and may consult with outside counsel or advisors as necessary to ensure the consistency of Tax services rendered by the Auditor with the foregoing policy.

No Auditor shall represent any Fund or any Service Affiliate before a tax court, district court or federal court of claims.

Under rules adopted by the Public Company Accounting Oversight Board and approved by the SEC, in connection with seeking Audit Committee pre-approval of permissible Tax services, the Auditor shall:

1. Describe in writing to the Audit Committees, which writing may be in the form of the proposed engagement letter:

a.	The scope of the service, the fee structure for the engagement, and any side letter or amendment to the engagement letter, or any other agreement between the Auditor and the Fund, relating to the service; and
b.	Any compensation arrangement or other agreement, such as a referral agreement, a referral fee or fee-sharing arrangement, between the Auditor and any person (other than the Fund) with respect to the promoting, marketing, or recommending of a transaction covered by the service;

2. Discuss with the Audit Committees the potential effects of the services on the independence of the Auditor; and

3. Document the substance of its discussion with the Audit Committees.

All Other Auditor Services

The Audit Committees may pre-approve non-audit services classified as “All other services” that are not categorically prohibited by the SEC, as listed in Exhibit 1 to this policy.

Pre-Approval Fee Levels or Established Amounts

Pre-approval of estimated fees or established amounts for services to be provided by the Auditor under general or specific pre-approval policies will be set periodically by the Audit Committees. Any proposed fees exceeding 110% of the maximum estimated pre-approved fees or established amounts for pre-approved audit and non-audit services will be reported to the Audit Committees at the quarterly Audit Committees meeting and will require specific approval by the Audit Committees before payment is made. The Audit Committee will always factor in the overall relationship of fees for audit and non-audit services in determining whether to pre-approve any such services and in determining whether to approve any additional fees exceeding 110% of the maximum pre-approved fees or established amounts for previously pre-approved services.

Procedures

On an annual basis, A I M Advisors, Inc. (“AIM”) will submit to the Audit Committees for general pre-approval, a list of non-audit services that the Funds or Service Affiliates of the Funds may request from the Auditor. The list will describe the non-audit services in reasonable detail and will include an estimated range of fees and such other information as the Audit Committee may request.

Each request for services to be provided by the Auditor under the general pre-approval of the Audit Committees will be submitted to the Funds’ Treasurer (or his or her designee) and must include a detailed description of the services to be rendered. The Treasurer or his or her designee will ensure that such services are included within the list of services that have received the general pre-approval of the Audit Committees. The Audit Committees will be informed at the next quarterly scheduled Audit Committees meeting of any such services for which the Auditor rendered an invoice and whether such services and fees had been pre-approved and if so, by what means.

Each request to provide services that require specific approval by the Audit Committees shall be submitted to the Audit Committees jointly by the Fund’s Treasurer or his or her designee and the Auditor, and must include a joint statement that, in their view, such request is consistent with the policies and procedures and the SEC Rules.

Each request to provide tax services under either the general or specific pre-approval of the Audit Committees will describe in writing: (i) the scope of the service, the fee structure for the engagement, and any side letter or amendment to the engagement letter, or any other agreement between the Auditor and the audit client, relating to the service; and (ii) any compensation arrangement or other agreement between the Auditor and any person (other than the audit client) with respect to the promoting, marketing, or recommending of a transaction covered by the service. The Auditor will discuss with the Audit Committees the potential effects of the services on the Auditor’s independence and will document the substance of the discussion.

Non-audit services pursuant to the de minimis exception provided by the SEC Rules will be promptly brought to the attention of the Audit Committees for approval, including documentation that each of the conditions for this exception, as set forth in the SEC Rules, has been satisfied.

On at least an annual basis, the Auditor will prepare a summary of all the services provided to any entity in the investment company complex as defined in section 2-01(f)(14) of Regulation S-X in sufficient detail as to the nature of the engagement and the fees associated with those services.

The Audit Committees have designated the Funds’ Treasurer to monitor the performance of all services provided by the Auditor and to ensure such services are in compliance with these policies and procedures. The Funds’ Treasurer will report to the Audit Committee on a periodic basis as to the results of such monitoring. Both the Funds’ Treasurer and management of AIM will immediately report to the chairman of the Audit Committee any breach of these policies and procedures that comes to the attention of the Funds’ Treasurer or senior management of AIM.

Exhibit 1 to Pre-Approval of Audit and Non-Audit Services Policies and Procedures

Conditionally Prohibited Non-Audit Services (not prohibited if the Fund can reasonably conclude that the results of the service would not be subject to audit procedures in connection with the audit of the Fund’s financial statements)

• Bookkeeping or other services related to the accounting records or financial statements of the audit client

• Financial information systems design and implementation

• Appraisal or valuation services, fairness opinions, or contribution-in-kind reports

• Actuarial services

• Internal audit outsourcing services

Categorically Prohibited Non-Audit Services

• Management functions

• Human resources

• Broker-dealer, investment adviser, or investment banking services

• Legal services

• Expert services unrelated to the audit

• Any service or product provided for a contingent fee or a commission

• Services related to marketing, planning, or opining in favor of the tax treatment of confidential transactions or aggressive tax position transactions, a significant purpose of which is tax avoidance

• Tax services for persons in financial reporting oversight roles at the Fund

• Any other service that the Public Company Oversight Board determines by regulation is impermissible.

PwC advised the Funds’ Audit Committee that PwC had identified following matter for consideration under the SEC’s auditor independence rules.

PwC became aware that certain aspects of investment advisory services provided by a PwC network member Firm’s Wealth Advisory Practice to its clients (generally high net worth individuals not associated with Invesco) were inconsistent with the SEC’s auditor independence requirements of the SEC. The technical violations occurred as a result of professionals of the Wealth Advisory Practice making a single recommendation of an audit client’s product to its clients rather than also identifying one or more suitable alternatives for the Wealth Advisory Practice’s client to consider. The Wealth Advisory Practice also received commissions from the fund manager. With respect to Invesco and its affiliates, there were 33 cases of single product recommendation and 20 cases of commissions received totaling approximately £7,000. These violations occurred over a two year period and ended in November 2007.

It should be noted that at no time did The Wealth Advisory Practice recommend products on behalf Invesco and its affiliates. Additionally, members of the audit engagement team were not aware of these violations or services; the advice provided was based on an understanding of the investment objectives of the clients of the Wealth Advisory Practice and not to promote the Company and its affiliates, and the volume and nature of the violations were insignificant. Although PwC received commissions, PwC derived no economic benefit from the commission as any commissions received were deducted from the time based fees charged to the investor client and created no incentive for PwC to recommend the investment.

PwC advised the Audit Committee that it believes its independence had not been adversely affected as it related to the audits of the Funds by this matter. In reaching this conclusion, PwC noted that during the time of its audits, the engagement team was not aware of the services provided and noted the insignificance of the services provided. Based on the foregoing, PwC did not believe this matter affected PwC’s ability to act objectively and impartially and to issue a report on financial statements as the Funds’ independent auditor, and, believes that a reasonable investor with knowledge of all the facts would agree with this conclusion.

Based upon PwC’s review, discussion and representations above, the audit committee, in its business judgment, concurred with PwC’s conclusions in relation to its independence.

ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.

     Not applicable.

ITEM 6. SCHEDULE OF INVESTMENTS.

Investments in securities of unaffiliated issuers is included as part of the reports to stockholders filed under Item 1 of this Form.

ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.

     Not applicable.

ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT COMPANIES.

     Not applicable.

ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS.

     Not applicable.

ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

     None

ITEM 11. CONTROLS AND PROCEDURES.

(a)

As of December 15, 2009, an evaluation was performed under the supervision and with the participation of the officers of the Registrant, including the PEO and PFO, to assess the effectiveness of the Registrant’s disclosure controls and procedures, as that term is defined in Rule 30a-3(c) under the Investment Company Act of 1940 (the “Act”), as amended. Based on that evaluation, the Registrant’s officers, including the PEO and PFO, concluded that, as of December 15, 2009, the Registrant’s disclosure controls and procedures were reasonably designed to ensure: (1) that information required to be disclosed by the Registrant on Form N-CSR is recorded, processed, summarized and reported within the time periods specified by the rules and forms of the Securities and Exchange Commission; and (2) that material information relating to the Registrant is made known to the PEO and PFO as appropriate to allow timely decisions regarding required disclosure.

(b)

There have been no changes in the Registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Act) that occurred during the second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the Registrant’s internal control over financial reporting.

ITEM 12. EXHIBITS.

12(a) (1)	Code of Ethics.
12(a) (2)	Certifications of principal executive officer and principal financial officer as required by Rule 30a-2(a) under the Investment Company Act of 1940.
12(a) (3)	Not applicable.
12(b)	Certifications of principal executive officer and principal financial officer as required by Rule 30a-2(b) under the Investment Company Act of 1940.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Registrant: AIM Variable Insurance Funds
By:	/s/ PHILIP A. TAYLOR
	Philip A. Taylor
	Principal Executive Officer

Date: February 26, 2010

Pursuant to the requirements of the Securities and 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/ PHILIP A. TAYLOR
	Philip A. Taylor
	Principal Executive Officer

Date: February 26, 2010

By:	/s/ Sheri Morris
	Sheri Morris
	Principal Financial Officer

Date: February 26, 2010

EXHIBIT INDEX

12(a)(1)	Code of Ethics.
12(a)(2)	Certifications of principal executive officer and principal financial officer as required by Rule 30a-2(a) under the Investment Company Act of 1940.
12(a)(3)	Not applicable.
12(b)	Certifications of principal executive officer and principal financial officer as required by Rule 30a-2(b) under the Investment Company Act of 1940.