UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-Q
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|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
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SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 26, 1999
OR
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
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SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________ to _____________
Commission file number 0-23375
GE Financial Assurance Holdings, Inc.
(Exact name of registrant as specified in its charter)
Delaware 54-1829180
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
6604 West Broad Street, Richmond, Virginia 23230
(Address of principal executive offices) (Zip Code)
(804) 281-6000
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes |X| No
At August 9, 1999, 1,000 shares of common stock with a par value of $1.00 were
outstanding.
REGISTRANT MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTION H(1)(a) AND (b)
OF FORM 10-Q AND IS THEREFORE FILING THIS FORM 10-Q WITH THE REDUCED DISCLOSURE
FORMAT.
<PAGE>
TABLE OF CONTENTS
Page
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PART I - FINANCIAL INFORMATION.
Item 1. Financial Statements ................................. 1
Item 2. Management's Discussion and Analysis of Results of
Operations ........................................... 7
Exhibit 12. Computation of Ratio of Earnings to Fixed Charges.. 10
PART II - OTHER INFORMATION.
Item 6. Exhibits and Reports on Form 8-K ..................... 11
Signatures .................................................... 12
Index to Exhibits ............................................. 13
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
GE FINANCIAL ASSURANCE HOLDINGS, INC. AND SUBSIDIARIES
Condensed, Consolidated Statement of Current and Retained Earnings
(Unaudited)
<TABLE>
<CAPTION>
Three Months Six Months
Ended Ended
-----------------------------------------
(In millions) June 26, June 27, June 26, June 27,
1999 1998 1999 1998
------- --------- ---------- --------
<S> <C>
Revenues:
Net investment income $ 775 $ 737 $ 1,523 $ 1,456
Net realized investment gains 41 21 57 28
Premiums 842 782 1,681 1,511
Policy fees and other income 120 121 240 228
------- --------- ---------- --------
Total revenues 1,778 1,661 3,501 3,223
------- --------- ---------- --------
Benefits and expenses:
Interest credited 317 311 631 632
Benefits and other changes in policy
reserves 810 805 1,659 1,548
Commissions 187 117 346 247
General expenses 292 268 552 457
Amortization of intangibles, net 76 73 141 142
Change in deferred acquisition
costs, net (170) (112) (306) (201)
Interest expense 23 22 46 40
------- --------- ---------- --------
Total benefits and expenses 1,535 1,484 3,069 2,865
------- --------- ---------- --------
Earnings before income taxes, minority
interest and cumulative effect of
accounting change 243 177 432 358
Provision for income taxes 89 64 161 133
------- --------- ---------- --------
Earnings before minority interest and
cumulative effect of accounting
change 154 113 271 225
Minority interest 2 -- 2 --
------- --------- ---------- --------
Earnings before cumulative effect of
accounting change 152 113 269 225
Cumulative effect of accounting change,
net of tax -- -- 25 --
------- --------- ---------- --------
Net earnings 152 113 294 225
Retained earnings at beginning of period 1,376 974 1,234 862
------- --------- ---------- --------
Retained earnings at end of period $1,528 $ 1,087 $ 1,528 $ 1,087
====== ========= ========== ========
</TABLE>
See Notes to Condensed, Consolidated Financial Statements.
1
<PAGE>
Item 1. Financial Statements (Continued).
GE FINANCIAL ASSURANCE HOLDINGS, INC. AND SUBSIDIARIES
Condensed, Consolidated Statement of Financial Position
June 26, December 31,
(In millions) 1999 1998
-------------- -------------
Assets (Unaudited)
Investments:
Fixed maturities available-for-sale, at fair
value $ 35,895 $ 36,898
Mortgage loans, net of valuation allowance 3,277 2,960
Other invested assets 2,329 2,265
Short-term investments 217 164
-------------- -------------
Total investments 41,718 42,287
Cash 131 214
Deferred acquisition costs 1,821 1,318
Intangible assets 3,804 3,243
Other assets 4,946 4,096
Separate account assets 6,552 5,569
-------------- -------------
Total assets $ 58,972 $ 56,727
============== =============
Liabilities and Shareholder's Interest
Liabilities:
Future annuity and contract benefits and other
policyholder liabilities $ 41,203 $ 39,505
Accounts payable, accrued expenses and other
liabilities 2,288 2,047
Short-term borrowings 1,294 1,330
Separate account liabilities 6,552 5,569
Long-term debt 696 698
-------------- -------------
Total liabilities 52,033 49,149
-------------- -------------
Minority interest 445 123
Shareholder's interest:
Net unrealized investment gains (losses) (527) 713
Foreign currency translation adjustments 58 73
-------------- -------------
Accumulated non-owner changes in equity (469) 786
Common stock --- ---
Additional paid-in capital 5,435 5,435
Retained earnings 1,528 1,234
-------------- -------------
Total shareholder's interest 6,494 7,455
-------------- -------------
Total liabilities and shareholder's
interest $ 58,972 $ 56,727
============== =============
See Notes to Condensed, Consolidated Financial Statements.
2
<PAGE>
Item 1. Financial Statements (Continued).
GE FINANCIAL ASSURANCE HOLDINGS, INC. AND SUBSIDIARIES
Condensed, Consolidated Statement of Cash Flows
(Unaudited)
Six Months Ended
----------------------------
June 26, June 27,
(In millions) 1999 1998
-------------- -------------
Cash Flows From Operating Activities
Net earnings $ 294 $ 225
Adjustments to reconcile net earnings to net
cash provided from operating activities:
Increase in future policy benefits 480 1,200
Cumulative effect of accounting change, net
of tax (25) ---
Other - net (242) (162)
-------------- -------------
Net cash provided from operating activities 507 1,263
-------------- -------------
Cash Flows From Investing Activities
Proceeds from sale and maturity of investment
securities and other invested assets 3,069 3,530
Principal collected on mortgage and policy loans 221 226
Purchases of investment securities and other
invested assets (4,430) (4,737)
Mortgage and policy loan originations (552) (359)
Purchase of GE Edison Life Insurance Company,
net of cash acquired --- (560)
Other - net (47) ---
-------------- -------------
Net cash used for investing activities (1,739) (1,900)
-------------- -------------
Cash Flows From Financing Activities
Proceeds from issuance of investment contracts 3,382 1,595
Redemption and benefit payments on investment
contracts (2,148) (2,302)
Changes in net commercial paper borrowings
(maturities of 90 days or less) (5) 570
Proceeds from minority interest holder --- 556
Proceeds from other borrowings 651 2,238
Payments on other borrowings (681) (2,139)
-------------- -------------
Net cash provided by financing activities 1,199 518
-------------- -------------
Effect of Exchange Rate Changes on Cash 3 (31)
Decrease in Cash and Equivalents (30) (150)
Cash and Equivalents at Beginning of Period 378 330
-------------- -------------
Cash and Equivalents at End of Period $ 348 $ 180
============== =============
See Notes to Condensed, Consolidated Financial Statements.
3
<PAGE>
Item 1. Financial Statements (Continued).
GE FINANCIAL ASSURANCE HOLDINGS, INC. AND SUBSIDIARIES
Notes to Condensed, Consolidated Financial Statements
(Unaudited)
1. The accompanying condensed, consolidated quarterly financial statements
represent GE Financial Assurance Holdings, Inc. and its consolidated
subsidiaries (collectively "the Company"). All significant intercompany
transactions have been eliminated. Certain prior period data have been
reclassified to conform to the current period presentation.
2. The condensed, consolidated quarterly financial statements are unaudited.
These statements include all adjustments (consisting of normal recurring
accruals) considered necessary by management to present a fair statement of
the results of operations, financial position and cash flows. The results
reported in these condensed, consolidated financial statements should not be
regarded as necessarily indicative of results that may be expected for the
entire year.
3. A summary of changes in shareholder's interest that do not result directly
from transactions with the shareholder follows:
Three Months Ended
-----------------------------
(In millions) June 26, 1999 June 27, 1998
------------- --------------
Net earnings $ 152 $ 113
Unrealized gains (losses) on investment
securities - net (913) 174
Foreign currency translation adjustments (10) (62)
------------ --------------
Total $ (771) $ 225
============= ==============
Six Months Ended
-----------------------------
(In millions) June 26, 1999 June 27, 1998
------------- --------------
Net earnings $ 294 $ 225
Unrealized gains (losses) on investment
securities - net (1,240) 165
Foreign currency translation adjustments (15) (62)
------------- --------------
Total $ (961) $ 328
============= ==============
4. The Company conducts its operations through two business segments: (1)
Wealth Accumulation and Transfer, comprised of products intended to increase
the policyholder's wealth, transfer wealth to beneficiaries or provide a
means for replacing the income of the insured in the event of premature
death, and (2) Wealth and Lifestyle Protection, comprised of products
intended to protect accumulated wealth and income from the financial drain
of unforeseen events.
4
<PAGE>
The following is a summary of operating segment activity for the three and
six month periods ended June 26, 1999 and June 27, 1998:
Three Months Ended
----------------------------
(In millions) June 26, 1999 June 27, 1998
-------------- -------------
Revenues
Wealth Accumulation & Transfer ......... $ 1,219 $ 1,146
Wealth & Lifestyle Protection .......... 559 515
-------------- -------------
Total revenues ..................... $ 1,778 $ 1,661
============== =============
Earnings before income taxes, minority
interest and cumulative effect of
accounting change
Wealth Accumulation & Transfer ......... $ 207 $ 146
Wealth & Lifestyle Protection .......... 36 31
-------------- -------------
Total earnings before income taxes,
minority interest and cumulative
effect of accounting change ..... $ 243 $ 177
============== =============
Six Months Ended
----------------------------
(In millions) June 26, 1999 June 27, 1998
-------------- -------------
Revenues
Wealth Accumulation & Transfer ......... $ 2,431 $ 2,218
Wealth & Lifestyle Protection .......... 1,070 1,005
-------------- -------------
Total revenues ..................... $ 3,501 $ 3,223
============== =============
Earnings before income taxes, minority
interest and cumulative effect of
accounting change
Wealth Accumulation & Transfer ......... $ 361 $ 298
Wealth & Lifestyle Protection .......... 71 60
-------------- -------------
Total earnings before income taxes,
minority interest and cumulative
effect of accounting change ..... $ 432 $ 358
============== =============
5. In 1997, the American Institute of Certified Public Accountants issued
Statement of Position ("SOP") 97-3, Accounting by Insurance and Other
Enterprises for Insurance-Related Assessments. This SOP provided guidance on
accounting by insurance and other enterprises for guaranty-fund and certain
other insurance-related assessments. The SOP requires enterprises to
recognize (1) a liability for assessments when (a) an assessment has been
asserted or information available prior to issuance of the financial
statements indicates it is probable that an assessment will be asserted, (b)
the underlying cause of the asserted or probable assessment has occurred on
or before the date of the financial statements, and (c) the amount of the
loss can be reasonably estimated and (2) an asset for an amount when it is
probable that a paid or accrued assessment will result in an amount that is
recoverable from premium tax offsets or policy surcharges from in-force
policies.
Effective January 1, 1999, the Company adopted SOP 97-3 and has reported the
effect of this adoption as a cumulative effect of a change in accounting
principle amounting to $25 million (net of tax of $14 million).
5
<PAGE>
6. In June 1998, The Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 133, Accounting for
Derivative Instruments and Hedging Activities ("the Statement"). The
Statement requires that, upon adoption, all derivative instruments (including
certain derivative instruments embedded in other contracts) be recognized in
the balance sheet at fair value, and that changes in such fair values be
recognized in earnings unless specific hedging criteria are met. Changes in
the values of derivatives that meet these hedging criteria will ultimately
offset related earnings effects of the hedged items; effects of certain
changes in fair value are recorded in equity pending recognition in earnings.
In June 1999, the FASB delayed the required effective date of the new
standard to January 1, 2001. The impact of adoption will be determined by
several factors, including the specific hedging instruments in place and
their relationships to hedged items, as well as market conditions. Management
had not estimated the effects of adoption, as it believes that such
determination will not be meaningful until closer to the adoption date.
7. On July 30, 1999, Montgomery Ward Holding Corp. emerged from bankruptcy under
a plan of reorganization that was approved on July 15, 1999. As part of the
reorganization, the Company's parent, General Electric Capital Corporation
("GECC"), acquired The Signature Group ("Signature"), which was not in
bankruptcy. GECC subsequently contributed Signature to the Company.
6
<PAGE>
Item 2. Management's Discussion and Analysis of Results of Operations.
Overview
Net earnings before minority interest and cumulative effect of accounting change
for the first six months of 1999 were $271 million, a $46 million, or 20.4%,
increase over the first six months of 1998. This increase was driven largely by
increased investment income and premiums earned due to growth in sales of
certain existing products, partially offset by increased benefits and other
changes in policy reserves.
Operating Results
Net investment income increased $67 million, or 4.6%, to $1,523 million for the
first six months of 1999 from $1,456 million for the first six months of 1998.
The increase was primarily attributable to higher levels of average invested
assets ($41.9 billion in first six months of 1999 vs. $38.8 billion in first six
months of 1998) resulting from growth in core invested assets and investments
relating to the Company's GE Edison Life Insurance Company ("GE Edison")
operations commencing in April 1998, partially offset by a decrease in weighted
average yields to 7.4% for the first six months of 1999 from 7.7% for the first
six months of 1998.
Net realized investment gains increased $29 million, or 103.6%, to $57 million
for the first six months of 1999 from $28 million for the first six months of
1998. This increase was primarily related to the Company's asset/liability risk
management policies and associated ongoing review of its investment portfolio
positions.
Premiums increased $170 million, or 11.3%, to $1,681 million for the first six
months of 1999 from $1,511 million for the first six months of 1998. The
increase is a result of the operations of GE Edison, which commenced in April
1998, and growth in the Company's life and accident and health businesses.
Policy fees and other income increased $12 million, or 5.3%, to $240 million in
the first six months of 1999 from $228 million in the first six months of 1998.
Policy fees and other income is principally comprised of surrender fees,
insurance charges made against universal life contracts, other specified
transaction fees assessed against policyholder account values and commission
income. The increase in the first six months of 1999 was primarily due to an
increase in transaction fee income resulting from an increase in policyholder
account values.
Interest credited decreased $1 million, or 0.2%, to $631 million in the first
six months of 1999 from $632 million in the first six months of 1998. This
decrease was driven by (1) the reduction of the Company's crediting rates due to
changes in market conditions and (2) customer redemption of certain products and
the corresponding reduction in the applicable underlying reserves, being
partially offset by the increase in issuance of guaranteed investment contracts
and single premium deferred annuities. The Company monitors market conditions
closely and resets interest-crediting rates as allowed by the terms of the
underlying contracts.
Benefits and other changes in policy reserves includes both activity related to
future policy benefits on long-duration life and health insurance products as
well as claim costs incurred during the year under these contracts and property
and casualty policies. These amounts increased $111 million, or 7.2%, to $1,659
million in the first six months of 1999 from $1,548 million in the first six
months of 1998. This increase was a result of the operations of GE Edison and
increased benefit payments and other changes in policy reserves due to growth in
the Company's life and accident and health businesses.
Commission expenses increased $99 million, or 40.1%, to $346 million in the
first six months of 1999 from $247 million in the first six months of 1998
primarily due to GE Edison's operations and higher production levels on certain
of the Company's existing products.
General expenses were $552 million for the first six months of 1999, an increase
of $95 million, or 20.8%, over the first six months of 1998 expense of $457
million. The increase was primarily a result of expenses related to the
Company's GE Edison operations and increases in sales and advertising expenses
in support of the Company's core growth initiatives.
7
<PAGE>
Item 2. Management's Discussion and Analysis of Results of Operations
(Continued).
Amortization of intangibles, net decreased $1 million, or 0.7%, to $141 million
for the first six months of 1999 from $142 million for the first six months of
1998. The Company's intangible assets primarily consist of two components which
both result from acquisition activities - the present value of future profits
("PVFP"), representing the estimated future gross profit in acquired insurance
and annuity contracts, and goodwill, representing the excess of purchase price
over the fair value of identified net assets of the acquired entities. An
increase in amortization of goodwill of $5 million, resulting from GE Edison was
offset by a reduction in the amortization of PVFP and other intangibles of $6
million.
Change in deferred acquisition costs, net increased $105 million, or 52.2%, to
$306 million for the first six months of 1999 from $201 million for the first
six months of 1998. The increase in change in deferred acquisition costs, net
was related to an increase in deferral of capitalization costs due to GE
Edison's operations, which commenced in April 1998, and increased product sales
noted above, partially offset by amortization of previously capitalized
acquisition costs.
Interest expense increased $6 million, or 15.0%, to $46 million for the first
six months of 1999 from $40 million for the first six months of 1998. This
increase was related to interest costs incurred on borrowings in connection with
the commencement of GE Edison operations in April 1998.
Financial Condition
Total assets increased $2,245 million, or 4.0%, at June 26, 1999 from December
31, 1998. This increase was mainly driven by (1) assets invested in separate
accounts increased by $983 million, or 17.7%, primarily due to continued sales
of variable annuity products and gains in the underlying investment funds, (2)
goodwill increased $310 million, or 17.2%, primarily as a result of contingent
consideration relating to the agreement to purchase the infrastructure and
capitalization of the GE Edison operations (see minority interests below), (3)
deferred taxes increased $682 million due to the current year change in net
unrealized losses on the Company's investment portfolio, (4) present value of
future profits and deferred acquisition costs increased $246 million, or 17.3%,
and $503 million, or 38.2%, respectively, due to the effects of the current year
change in net unrealized losses and deferral of acquisition costs, partially
offset by net amortization for the year and (5) other assets increased $278
million as a result of increased balances due from brokers relating to
investment transactions. These increases were partially offset by a decrease in
total investments of $569 million, or 1.3%, at June 26, 1999 from December 31,
1998. This decrease was primarily driven by net unrealized losses within the
Company's investment portfolio of $2,443 million, partially offset by investment
operating cash flows amounting to $1,739 million.
Total liabilities increased $2,884 million, or 5.9%, at June 26, 1999 from
December 31, 1998. Future annuity and contract benefits and other policyholder
liabilities increased $1,698 million, or 4.3%, at June 26, 1999 from December
31, 1998. This increase resulted primarily from the growth in existing insurance
and investment products. Separate account liabilities increased $983 million, or
17.7%, due to continued sales of variable annuity products and gains in the
underlying investment funds. Borrowings (including short-term and long-term
debt) decreased $38 million, or 1.9%, primarily as a result of normal line of
credit activity during the first quarter. Accounts payable, accrued expenses and
other liabilities increased $241 million, or 11.8%, due primarily to timing of
net payments and receipts related to investment portfolio and normal business
activity.
Minority interest increased $322 million, or 261.8%, at June 26, 1999 from
December 31, 1998 as a result of the issuance of preferred stock in one the
Company's subsidiaries as contingent consideration in accordance with the
agreement to purchase the infrastructure and capitalization of the GE Edison
operations.
Net unrealized investment gains (losses) decreased $1,240 million at June 26,
1999 from December 31, 1998 as a result of a decline in the fair value of the
Company's available-for-sale portfolio due to a general increase in prevailing
interest rates, partially offset by applicable adjustments to deferred taxes,
present value of future profits and deferred acquisition costs as noted above.
8
<PAGE>
Year 2000
As discussed in the Company's Annual Report on Form 10-K for the year ended
December 31, 1998, the Company is applying a Six Sigma quality approach to
identify and mitigate Year 2000 issues in their information systems, products
and services, facilities and suppliers, as well as to assess the extent to which
Year 2000 issues will affect its customers. The Company has a Year 2000 leader
who oversees a multi-functional project team responsible for remediation and
contingency planning, applying a Six Sigma quality approach in four phases: (1)
define/measure - identify and inventory possible sources of Year 2000 issues;
(2) analyze - determine the nature and extent of Year 2000 issues and develop
project plans to address those issues; (3) improve execute project plans and
perform a majority of the testing; and (4) control - complete testing, continue
monitoring readiness and complete necessary contingency plans. As of the end of
June 1999, virtually all significant information systems, products and services,
facilities and suppliers were in the control phase. As a final step in the
control phase, the Company is developing, testing and implementing contingency
plans to ameliorate any potential internal or external disruption of critical
business processes. The specific actions identified in such contingency plans
differ depending on circumstances, but most often include manual work-arounds,
deployment of backup or secondary technologies, rearranging work schedules, and
substitution of suppliers, as appropriate. While the Company does not expect
significant disruptions of critical business processes caused by internal Year
2000 issues, the likelihood of externally-caused disruptions and the ability of
the contingency plans to ameliorate the effects of any such externally-caused
disruptions is not determinable. The total estimate of Year 2000 expenditures is
in line with previous projections. The activities related to Year 2000 efforts
necessarily involve estimates and projections of activities and resources that
will be required in the future. These estimates and projections could change as
work progresses.
9
<PAGE>
PART II--OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
a. Exhibits.
Exhibit 12. Computation of ratio of earnings to fixed charges.
Exhibit 27. Financial Data Schedule (filed electronically only).
b. Reports on Form 8-K.
None.
11
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
GE FINANCIAL ASSURANCE HOLDINGS, INC.
(Registrant)
Date: August 9, 1999 By: /s/ Thomas W. Casey
-----------------------------------------
Thomas W. Casey,
Senior Vice President and
Chief Financial Officer
(Principal Financial Officer)
Date: August 9, 1999 By: /s/ Richard G. Fucci
-----------------------------------------
Richard G. Fucci,
Vice President and Controller
(Principal Accounting Officer)
12
<PAGE>
GE FINANCIAL ASSURANCE HOLDINGS, INC. AND SUBSIDIARIES
Index to Exhibits
Exhibit No. Page
- ----------------- -------------
12 Computation of ratio of earnings to fixed
charges 10
27 Financial Data Schedule (filed electronically
only)
13
EXHIBIT 12
GE FINANCIAL ASSURANCE HOLDINGS, INC. AND SUBSIDIARIES
Computation of Ratio of Earnings to Fixed Charges
Six Months Ended June 26, 1999
(Unaudited)
Ratio of
Earnings to
(Dollar amounts in millions) Fixed Charges
---------------
Earnings before minority interest and cumulative effect
of accounting change $ 271
Provision for income taxes 161
---------------
Earnings before income taxes, minority interest
and cumulative effect of accounting change 432
---------------
Fixed charges:
Interest 46
One-third of rentals 8
---------------
Total fixed charges 54
---------------
Less interest capitalized, net of amortization ---
---------------
Earnings before income taxes and cumulative effect of
accounting change, plus fixed charges $ 486
===============
Ratio of earnings to fixed charges 9.0
===============
For purposes of computing the ratios, fixed charges consist of interest on all
indebtedness and one-third of rentals, which management believes is a reasonable
approximation of the interest factor of such rentals.
10
<TABLE> <S> <C>
<ARTICLE> 7
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JUN-26-1999
<DEBT-HELD-FOR-SALE> 35,895
<DEBT-CARRYING-VALUE> 0
<DEBT-MARKET-VALUE> 0
<EQUITIES> 341
<MORTGAGE> 3,277
<REAL-ESTATE> 0
<TOTAL-INVEST> 41,718
<CASH> 131
<RECOVER-REINSURE> 1,518
<DEFERRED-ACQUISITION> 1,821
<TOTAL-ASSETS> 58,972
<POLICY-LOSSES> 37,929
<UNEARNED-PREMIUMS> 890
<POLICY-OTHER> 1,789
<POLICY-HOLDER-FUNDS> 595
<NOTES-PAYABLE> 696
0
0
<COMMON> 0
<OTHER-SE> 6,494
<TOTAL-LIABILITY-AND-EQUITY> 58,972
1,681
<INVESTMENT-INCOME> 1,523
<INVESTMENT-GAINS> 57
<OTHER-INCOME> 240
<BENEFITS> 2,290
<UNDERWRITING-AMORTIZATION> 127
<UNDERWRITING-OTHER> 652
<INCOME-PRETAX> 432
<INCOME-TAX> 161
<INCOME-CONTINUING> 271
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 25
<NET-INCOME> 294
<EPS-BASIC> 0
<EPS-DILUTED> 0
<RESERVE-OPEN> 0
<PROVISION-CURRENT> 0
<PROVISION-PRIOR> 0
<PAYMENTS-CURRENT> 0
<PAYMENTS-PRIOR> 0
<RESERVE-CLOSE> 0
<CUMULATIVE-DEFICIENCY> 0
</TABLE>
