<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended JUNE 30, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
----- -----
Commission File Numbers 33-31940; 33-39345; 33-57052
PROTECTIVE LIFE INSURANCE COMPANY
(Exact name of registrant as specified in its charter)
TENNESSEE 63-0169720
(State of incorporation) (IRS Employer Identification Number)
2801 HIGHWAY 280 SOUTH
BIRMINGHAM, ALABAMA 35223
(Address of principal executive offices)
(205) 879-9230
(Registrant's telephone number)
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
--- ---
Number of shares of Common Stock, $1.00 par value, outstanding as of August 4,
1995: 5,000,000 shares.
THE REGISTRANT MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTION H(1)(A) AND
(B) OF FORM 10-Q AND IS THEREFORE FILING THIS FORM WITH THE REDUCED DISCLOSURE
FORMAT PURSUANT TO GENERAL INSTRUCTION H(2).
<PAGE>
PROTECTIVE LIFE INSURANCE COMPANY
INDEX
PART I. FINANCIAL INFORMATION:
Item 1. Financial Statements:
Report of Independent Accountants
Consolidated Condensed Statements of Income for the Three
Months and Six Months ended June 30, 1995 and 1994 (unaudited)
Consolidated Condensed Balance Sheets as of June 30, 1995
(unaudited) and December 31, 1994
Consolidated Condensed Statements of Cash Flows
for the Six Months ended June 30, 1995 and 1994 (unaudited)
Notes to Consolidated Condensed Financial Statements (unaudited)
Item 2. Management's Narrative Analysis of the Results of Operations
PART II. OTHER INFORMATION:
Item 6. Exhibits and Reports on Form 8-K
Signature
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Directors and Stockholder
Protective Life Insurance Company
Birmingham, Alabama
We have reviewed the accompanying consolidated condensed balance sheet of
Protective Life Insurance Company and subsidiaries as of June 30, 1995, and
the related consolidated condensed statements of income for the three-month
and six-month periods ended June 30, 1995 and 1994 and consolidated condensed
statements of cash flows for the six-month periods ended June 30, 1995 and
1994. These financial statements are the responsibility of the Company's
management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures
to financial data and making inquiries of persons responsible for financial
and accounting matters. It is substantially less in scope than an audit
conducted in accordance with generally accepted auditing standards, the
objective of which is the expression of an opinion regarding the financial
statements taken as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to the consolidated condensed financial statements referred to
above for them to be in conformity with generally accepted accounting
principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet as of December 31, 1994, and the
related consolidated statements of income, stockholder's equity, and cash
flows for the year then ended (not presented herein); and in our report dated
February 13, 1995, we expressed an unqualified opinion which contains an
explanatory paragraph regarding the changes in accounting for certain
investments in debt and equity securities in 1993 and postretirement benefits
other than pensions in 1992 on those consolidated financial statements. In
our opinion, the information set forth in the accompanying consolidated
condensed balance sheet as of December 31, 1994, is fairly stated in all
material respects in relation to the consolidated balance sheet from which it
has been derived.
COOPERS & LYBRAND L.L.P.
Birmingham, Alabama
July 25, 1995
<PAGE>
<TABLE>
PROTECTIVE LIFE INSURANCE COMPANY
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(Dollars in thousands)
(Unaudited)
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30 JUNE 30
1995 1994 1995 1994
<S> <C> <C> <C> <C>
REVENUES
Premiums and policy fees (net of reinsurance ceded:
three months: 1995 - $80,312; 1994 - $36,622 $ 93,685 $ 98,049 $184,247 $187,486
six months: 1995 - $142,444; 1994 - $70,748)
Net investment income 113,564 95,870 223,855 194,695
Realized investment gains (losses) (555) (564) 2,106 1,733
Other income 2,839 1,476 4,193 2,228
-------- --------- -------- --------
209,533 194,831 414,401 386,142
-------- --------- -------- --------
BENEFITS AND EXPENSES
Benefits and settlement expenses (net of reinsurance ceded:
three months: 1995 - $62,213; 1994 - $25,313 124,987 126,452 248,928 242,328
six months: 1995 - $105,122; 1994 - $49,424)
Amortization of deferred policy acquisition costs 25,225 19,670 45,550 39,709
Other operating expenses (net of reinsurance ceded:
three months: 1995 - $24,204; 1994 - $3,318 31,562 30,326 63,257 56,598
six months: 1995 - $35,473; 1994 - $6,048)
-------- --------- -------- --------
181,774 176,448 357,735 338,635
-------- --------- -------- --------
INCOME BEFORE INCOME TAX 27,759 18,383 56,666 47,507
Income tax expense 9,161 5,912 18,700 15,232
-------- --------- -------- --------
NET INCOME $ 18,598 $ 12,471 $ 37,966 $ 32,275
======== ========= ======== ========
SEE NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
</TABLE>
<PAGE>
<TABLE>
PROTECTIVE LIFE INSURANCE COMPANY
CONSOLIDATED CONDENSED BALANCE SHEETS
(DOLLARS IN THOUSANDS)
<CAPTION>
JUNE 30 DECEMBER 31
1995 1994
(Unaudited)
<S> <C> <C>
ASSETS
Investments:
Fixed maturities $3,831,256 $3,493,646
Equity securities 46,934 45,005
Mortgage loans on real estate 1,621,978 1,488,495
Investment in real estate, net 21,142 20,170
Policy loans 147,242 147,608
Other long-term investments 48,670 50,751
Short-term investments 135,195 54,683
---------- ---------
Total investments 5,852,417 5,300,358
Accrued investment income 61,280 55,630
Accounts and premiums receivable, net 18,355 28,928
Reinsurance receivables 161,378 122,175
Deferred policy acquisition costs 409,573 434,200
Property and equipment, net 35,090 33,185
Receivables from related parties 2,747 281
Other assets 12,984 11,802
Assets held in separate accounts 213,018 124,145
---------- ----------
TOTAL ASSETS $6,766,842 $6,110,704
========== ==========
LIABILITIES
Policy liabilities and accruals $1,940,786 $1,797,774
Guaranteed investment contract deposits 2,435,414 2,281,673
Annuity deposits 1,299,517 1,251,318
Other policyholders' funds 144,690 144,461
Other liabilities 74,275 94,181
Accrued income taxes (1,675) (4,699)
Deferred income taxes 43,810 (14,667)
Indebtedness to related parties 39,443 39,443
Liabilities related to separate accounts 213,018 124,145
---------- ----------
TOTAL LIABILITIES 6,189,278 5,713,629
---------- ----------
COMMITMENTS AND CONTINGENT LIABILITIES - NOTE B
REDEEMABLE PREFERRED STOCK, $1 par value,
at redemption value; Shares authorized and issued: 2,000 2,000 2,000
---------- ----------
STOCKHOLDER'S EQUITY
Common Stock, $1 par value
Shares authorized and issued: 5,000,000 5,000 5,000
Additional paid-in capital 144,494 126,494
Net unrealized gains (losses) on investments
(Net of income tax: 1995 - $8,712; 1994 - $(57,902)) 16,870 (107,532)
Retained earnings 414,965 377,049
Note receivable from PLC
Employee Stock Ownership Plan (5,765) (5,936)
----------- -----------
TOTAL STOCKHOLDER'S EQUITY 575,564 395,075
----------- -----------
$6,766,842 $6,110,704
=========== ===========
SEE NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
</TABLE>
<PAGE>
<TABLE>
PROTECTIVE LIFE INSURANCE COMPANY
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(Unaudited)
<CAPTION>
SIX MONTHS ENDED
JUNE 30
1995 1994
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 37,966 $ 32,275
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization of deferred policy acquisition costs 45,551 39,709
Capitalization of deferred policy acquisition costs (39,292) (54,164)
Depreciation expense 2,125 2,677
Deferred income taxes (8,508) (2,619)
Accrued income taxes 3,024 (7,623)
Interest credited to universal life and investment products 140,650 119,559
Policy fees assessed on universal life and investment products (48,472) (38,727)
Change in accrued investment income and other receivables (36,209) (2,328)
Change in policy liabilities and other policyholders'
funds of traditional life and health products 72,806 48,391
Change in other liabilities (38,532) 4,610
Other (net) (927) 1,574
-------- ---------
Net cash provided by operating activities 130,182 143,334
-------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Maturities and principal reductions of investments
Investments available for sale 110,715 264,967
Other 36,281 118,561
Sale of investments
Investments available for sale 715,811 176,941
Other 3,062 2,249
Cost of investments acquired
Investments available for sale (1,057,842) (872,852)
Other (129,153) (65,223)
Acquisitions and bulk reinsurance assumptions 39,328
Purchase of property and equipment (4,111) (1,818)
Sale of property and equipment 81 1,249
--------- ----------
Net cash used in investing activities (325,156) (336,598)
--------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES
Capital contribution from PLC 18,000
Proceeds from borrowings under line of credit arrangements and debt 683,000 287,148
Principal payments on line of credit arrangements and debt (683,000) (287,186)
Principal payment on surplus note to PLC (4,750)
Dividends to PLC (50) (50)
Investment product deposits and change in universal life deposits 447,884 691,524
Investment product withdrawals (270,860) (503,662)
--------- -----------
Net cash provided by financing activities 194,974 183,024
--------- -----------
DECREASE IN CASH 0 (10,240)
CASH AT BEGINNING OF PERIOD 0 23,951
--------- -----------
CASH AT END OF PERIOD $ 0 $ 13,711
========= ===========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the period:
Interest on notes and mortgages payable $ (1,652) $ (2,593)
Income taxes $(24,183) $ (25,473)
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND
FINANCING ACTIVITIES
Reduction of principal on note from ESOP $ 171 $ 28
Acquisitions and bulk reinsurance assumptions
Assets acquired $ 613 $ 41,818
Liabilities assumed (21,800) (49,049)
--------- ------------
Net $(21,187) $ (7,231)
======== ============
SEE NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
</TABLE>
<PAGE>
PROTECTIVE LIFE INSURANCE COMPANY
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited consolidated condensed financial statements
of Protective Life Insurance Company ("Protective Life") have been prepared
in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Rule 10-01
of Regulation S-X. Accordingly, they do not include all of the disclosures
required by generally accepted accounting principles for complete financial
statements. In the opinion of management, all adjustments (consisting of
normal recurring accruals) necessary for a fair presentation have been
included. Operating results for the six month period ended June 30, 1995 are
not necessarily indicative of the results that may be expected for the year
ending December 31, 1995. For further information, refer to the consolidated
financial statements and notes thereto included in Protective Life's annual
report on Form 10-K for the year ended December 31, 1994.
Protective Life is a wholly-owned subsidiary of Protective Life
Corporation ("PLC").
NOTE B - COMMITMENTS AND CONTINGENT LIABILITIES
Under insurance guaranty fund laws, in most states, insurance companies
doing business therein can be assessed up to prescribed limits for
policyholder losses incurred by insolvent companies. Protective Life does
not believe such assessments will be materially different from amounts
already provided for in the financial statements. Most of these laws do
provide, however, that an assessment may be excused or deferred if it would
threaten an insurer's own financial strength.
Protective Life and its subsidiaries, like other life and health
insurers, from time to time are involved in lawsuits, in which the plaintiff
may seek punitive damage awards as well as compensatory damage awards. To
date, no such lawsuit has resulted in the award of any material amount of
damages against Protective Life. Among the litigation currently pending is a
class action concerning the sale of credit insurance. Although the outcome
of any litigation cannot be predicted with certainty, Protective Life
believes that such litigation will not have a material adverse effect on its
financial position.
NOTE C - STATUTORY REPORTING PRACTICES
Financial statements prepared in conformity with generally accepted
accounting principles (i.e., GAAP) differ in some respects from the statutory
accounting practices prescribed or permitted by insurance regulatory
authorities. At June 30, 1995, Protective Life and its life insurance
subsidiaries had consolidated stockholder's equity and net income prepared in
conformity with statutory reporting practices of $310.4 million and $55.5
million, respectively.
<PAGE>
NOTE D - RECENTLY ADOPTED ACCOUNTING STANDARDS
At December 31, 1993, Protective Life adopted Statement of Financial
Accounting Standards ("SFAS") No. 115, "Accounting for Certain Investments in
Debt and Equity Securities." For purposes of adopting SFAS No. 115
Protective Life has classified all of its investments in fixed maturities,
equity securities, and short-term investments as "available for sale." As
prescribed in SFAS No. 115, these investments are recorded at their market
values with the resulting net unrealized gain or loss, net of income tax and
a related adjustment to deferred policy acquisition costs, recorded as a
component of stockholder's equity.
Protective Life's balance sheets at June 30, 1995 and December 31, 1994,
prepared on the basis of reporting investments at amortized cost rather than
at market values, are as follows:
JUNE 30, 1995 DECEMBER 31, 1994
(IN THOUSANDS)
Total investments $5,820,628 $5,499,511
Deferred policy acquisition costs 415,408 400,480
All other assets 508,432 376,146
---------- ----------
$6,744,468 $6,276,137
========== ==========
Deferred income taxes $ 34,726 $ 43,235
All other liabilities 6,149,048 5,728,296
---------- ----------
6,183,774 5,771,531
Redeemable preferred stock 2,000 2,000
Stockholder's equity 558,694 502,606
---------- ----------
$6,744,468 $6,276,137
========== ==========
On January 1, 1995 Protective Life adopted SFAS No. 114 "Accounting by
Creditors for Impairment of a Loan" and SFAS No. 118 "Accounting by Creditors
for Impairment of a Loan-Income Recognition and Disclosures". Under the new
standards, a loan is considered impaired, based on current information and
events, if it is probable that Protective Life will be unable to collect the
scheduled payments of principal or interest when due according to the
contractual terms of the loan agreement. The measurement of impaired loans
is generally based on the present value of expected future cash flows
discounted at the historical effective interest rate, except that all
collateral-dependent loans are measured for impairment based on the fair
value of the collateral.
Since Protective Life's mortgage loans are collateralized by real
estate, any assessment of impairment is based upon the estimated fair value
of the real estate. Based on Protective Life's evaluation of its mortgage
loan portfolio, Protective Life does not expect any material losses on its
mortgage loans, and therefore no allowance for losses is required under SFAS
No. 114 at January 1, 1995 or June 30, 1995.
<PAGE>
ITEM 2. MANAGEMENT'S NARRATIVE ANALYSIS OF THE
RESULTS OF OPERATIONS
Protective Life Insurance Company ("Protective Life") is a wholly-owned
and the principal operating subsidiary of Protective Life Corporation
("PLC"), an insurance holding company whose common stock is traded on the New
York Stock Exchange. Founded in 1907, Protective Life provides financial
services through the production, distribution, and administration of
insurance and investment products.
In accordance with General Instruction H(2)(a), Protective Life includes
the following analysis with the reduced disclosure format.
REVENUES
The following table sets forth revenues by source for the period shown:
SIX MONTHS PERCENTAGE
ENDED INCREASE
JUNE 30 (DECREASE)
(IN THOUSANDS)
1995 1994
Premiums and policy fees $184,247 $187,486 (1.7)%
Net investment income 223,855 194,695 15.0
Realized investment gains 2,106 1,733 21.5
Other income 4,193 2,228 88.2
-------- --------
$414,401 $386,142
======== ========
Premiums and policy fees decreased $3.2 million or 1.7% In the first six
months of 1995 over the first six months of 1994. Premiums and policy fees
from the Financial Institutions Division decreased $32.8 million in the first
six months of 1995 as compared to the first six months of 1994. This
resulted from a reinsurance arrangement begun in the 1995 first quarter
whereby a significant portion of the Division's new sales are being ceded to
a reinsurer. Increases in premiums and policy fees from the Group and
Individual Life Divisions represent increases of $8.8 Million and $7.5
million, respectively. The assumption of a block of payroll deduction
policies in the second quarter of 1994 resulted in a $1.9 Million increase in
premiums and policy fees in 1995. The assumption of a block of policies in
the fourth quarter of 1994 resulted in an $11.4 million increase in premiums
and policy fees in 1995. The reinsurance of a block of policies in the
second quarter of 1995 resulted in a $3.3 Million increase in premiums and
policy fees. Decreases in older acquired blocks resulted in a $4.6 million
decrease in premiums and policy fees.
Net investment income in the first six months of 1995 increased by $29.2
million or 15.0% over the corresponding period of the preceding year,
primarily due to increases in the average amount of invested assets.
Invested assets have increased primarily due to receiving annuity and
guaranteed investment contract ("GIC") deposits and to acquisitions. Annuity
and GIC deposits are not considered revenues in accordance with generally
accepted accounting principles. These deposits are included in the liability
section of the balance sheet. The assumption of two blocks of policies in
1994 and one block of policies in the second quarter of 1995 resulted in an
increase in net investment income of $6.7 million in the first six months of
1995.
<PAGE>
Protective Life generally purchases its investments with the intent to
hold to maturity by purchasing investments that match future cash-flow needs.
However, Protective Life may sell any of its investments to maintain proper
matching of assets and liabilities. Accordingly, Protective Life has
classified its fixed maturities and certain other securities as "available
for sale." The sales of investments that have occurred have largely resulted
from portfolio management decisions to maintain proper matching of assets and
liabilities.
Realized investment gains for the first six months of 1995 were $0.4
million higher than the corresponding period of 1994.
Other income consists primarily of fees from
administrative-services-only types of group accident and health insurance
contracts, and from rental of space in its administrative building to PLC.
INCOME BEFORE INCOME TAX
The following table sets forth income or loss before income tax by
business segment for the periods shown:
INCOME (LOSS) BEFORE INCOME TAX
SIX MONTHS ENDED JUNE 30
(IN THOUSANDS)
BUSINESS SEGMENT 1995 1994
Acquisitions $24,584 $19,428
Financial Institutions 3,881 3,605
Group 5,187 4,665
Guaranteed Investment Contracts 16,316 20,650
Individual Life 10,462 8,915
Investment Products 5,623 2,573
Corporate and Other (7,432) (10,679)
Unallocated Realized Investment
Gains (Losses) (1,955) (1,650)
------- -------
$56,666 $47,507
======= =======
Pretax earnings from the Acquisitions Division increased $5.2 million in
the first six months of 1995 as compared to the same period of 1994.
Earnings from the Acquisitions Division are expected to decline over time
(due to the lapsing of policies resulting from deaths of insureds or
terminations of coverage) unless new acquisitions are made. As previously
discussed, Protective Life assumed two blocks of policies during 1994 and one
block of policies during the second quarter of 1995. These acquisitions
represent $4.1 million of the increase. Improved results related to
Wisconsin National Life Insurance Company (a company acquired in 1993)
represent a $1.3 million increase.
Pretax earnings of the Financial Institutions Division were $0.3 million
higher in the first six months of 1995 as compared to the same period in
1994. Increased earnings in certain lines of business were partially offset
by decreases in other lines. The Division has entered into a reinsurance
arrangement whereby a significant portion of the Division's new sales are
being ceded to a reinsurer. In the 1995 second quarter the Division also
reinsured a block of older policies. Though the Division's future earnings
will be slightly reduced, these reinsurance transactions are expected to
improve the Division's return on investment.
Group pretax earnings were $0.5 million higher in the first six months
of 1995 as compared to the first six months of 1994 due to improved earnings
from accident and health products and dental products which were partially
offset by lower earnings from life and cancer products.
<PAGE>
The Guaranteed Investment Contract ("GIC") Division had pretax operating
earnings of $16.1 million in the first six months of 1995 and $16.1 million
in the corresponding period of 1994. At June 30, 1995, GIC deposits totaled
$2.4 billion compared to $2.1 billion one year earlier. Increased earnings
due to higher deposits were offset by higher expenses. Realized investment
gains associated with this Division in the first six months of 1995 were $0.3
million, $4.2 million lower than the same period last year. As a result,
total pre-tax earnings were $16.3 million in the first six months of 1995
compared to $20.6 million for the same period in 1994.
Individual Life pretax earnings were $1.5 million higher in the first
six months of 1995 as compared to the first six months of 1994. At December
31, 1994 Protective Life reduced certain statutory policy liabilities for
certain term-like products to be more consistent with current regulation and
industry practice. This reduced investment income allocated to the Division
in the first six months of 1995 by approximately $1.5 million when compared
to the same period in 1994. Additionally, expenses to develop new marketing
ventures were $0.9 million higher in the first six months of 1995 as compared
to the first six months of 1994. These decreases were offset by earnings
from a growing amount of business in force.
Investment Products Division pretax earnings were $3.1 million higher in
the first six months of 1995 compared to the same period of 1994. Realized
investment gains associated with the Division, net of related amortization of
deferred policy acquisition costs, were $2.1 million higher than the same
period last year. During 1994 the Division completed the amortization of the
deferred policy acquisition costs related to its book value annuities.
Accordingly, 1995 operating earnings were $4.1 million higher due to lower
amortization. This increase was largely offset by higher expenses related to
the Company's variable annuity which was introduced in early 1994, and to
increases in other expenses.
The Corporate and Other segment consists of several small insurance
lines of business, net investment income and other operating expenses not
identified with the preceding operating divisions (including interest on
substantially all debt), and the operations of a small noninsurance subsidi-
ary. Pretax losses for this segment were $3.2 million lower in the first six
months of 1995 as compared to the first six months of 1994 primarily due to
lower expenses, including management fees to PLC.
INCOME TAXES
The following table sets forth the effective tax rates for the periods
shown:
SIX MONTHS
ENDED ESTIMATED EFFECTIVE
JUNE 30 INCOME TAX RATES
1995 33.0%
1994 32.0
The effective income tax rate for the first three months of 1994 was
32.0%. Management's estimate of the effective income tax rate for 1995 is
33.0%.
<PAGE>
NET INCOME
The following table sets forth net income for the periods shown:
SIX MONTHS NET INCOME
ENDED TOTAL PERCENTAGE
JUNE 30 (IN THOUSANDS) INCREASE
1995 $37,966 17.6%
1994 32,275 22.3
Compared to the same period in 1994, net income in the first six months
of 1995 increased $5.7 million, reflecting improved operating earnings in the
Acquisitions, Financial Institutions, Group, Individual Life and Investment
Products Divisions and the Corporate and Other segment, which were partially
offset by lower earnings in the Guaranteed Investment Contracts Division.
RECENTLY ISSUED ACCOUNTING STANDARDS
In January 1995, the Financial Accounting Standards Board ("FASB")
issued Statement of Financial Accounting Standards ("SFAS") No. 120,
"Accounting and Reporting by Mutual Life Insurance Enterprises and by
Insurance Enterprises for Certain Long-Duration Participating Contracts." In
March 1995, the FASB issued SFAS No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of." Protective
Life anticipates that the impact of adopting SFAS Nos. 120 and 121 will be
immaterial to its financial condition.
<PAGE>
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibit 27 - Financial data schedule
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has caused this report to be signed on its behalf by the under-
signed thereunto duly authorized.
PROTECTIVE LIFE INSURANCE COMPANY
Date: August 10, 1995 /S/ JERRY W. DEFOOR
Jerry W. DeFoor
Vice President and Controller,
and Chief Accounting Officer
(Duly authorized officer)
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 7
<LEGEND>
This schedule contains summary financial information extracted from the
consolidated financial statements of Protective Life Insurance Company and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> JUN-30-1995
<DEBT-HELD-FOR-SALE> 3,831,256
<DEBT-CARRYING-VALUE> 0
<DEBT-MARKET-VALUE> 0
<EQUITIES> 46,934
<MORTGAGE> 1,621
<REAL-ESTATE> 21,142
<TOTAL-INVEST> 5,852,417
<CASH> 0
<RECOVER-REINSURE> 161,378
<DEFERRED-ACQUISITION> 409,573
<TOTAL-ASSETS> 6,766,842
<POLICY-LOSSES> 1,807,604
<UNEARNED-PREMIUMS> 133,182
<POLICY-OTHER> 0
<POLICY-HOLDER-FUNDS> 144,690
<NOTES-PAYABLE> 0
<COMMON> 5,000
2,000
0
<OTHER-SE> 570,564
<TOTAL-LIABILITY-AND-EQUITY> 6,766,842
184,247
<INVESTMENT-INCOME> 223,855
<INVESTMENT-GAINS> 2,106
<OTHER-INCOME> 4,193
<BENEFITS> 248,928
<UNDERWRITING-AMORTIZATION> 45,550
<UNDERWRITING-OTHER> 63,257
<INCOME-PRETAX> 56,666
<INCOME-TAX> 18,700
<INCOME-CONTINUING> 37,966
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 37,966
<EPS-PRIMARY> 0<F1>
<EPS-DILUTED> 0<F1>
<RESERVE-OPEN> 0
<PROVISION-CURRENT> 0
<PROVISION-PRIOR> 0
<PAYMENTS-CURRENT> 0
<PAYMENTS-PRIOR> 0
<RESERVE-CLOSE> 0
<CUMULATIVE-DEFICIENCY> 0
<FN>
<F1>Protective Life Insurance Company is a wholly-owned subsidiary of Protective
Life Corporation (NYSE: PL) and is not required to present EPS information.
</FN>
</TABLE>
