SEPARATE ACCOUNT I OF
WASHINGTON NATIONAL INSURANCE COMPANY
June 30, 1998
Unaudited
Statement of Assets and Contract Owners' Equity 1
Statement of Operations 2
Statements of Changes in Contract Owners' Equity 3
Notes to Financial Statements 4
<PAGE>
SEPARATE ACCOUNT I OF WASHINGTON NATIONAL INSURANCE COMPANY
<TABLE>
STATEMENT OF ASSETS AND CONTRACT OWNERS' EQUITY (UNAUDITED)
June 30, 1998
<CAPTION>
Sub-Account
--------------------------------------------------
Money Capital Growth and
Bond Market Growth Income
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
ASSETS
Investment in Scudder Variable Life Investment Fund - at net asset value - Note C:
Bond portfolio (800,561.840 shares) $ 5,507,865
Money Market portfolio (526,463.630 shares) $ 526,464
Capital Growth portfolio (1,604,470.228 shares) $36,293,117
Growth and Income portfolio (232,015.819 shares) $ 2,712,265
----------- ----------- ----------- -----------
$ 5,507,865 $ 526,464 $36,293,117 $ 2,712,265
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
CONTRACT OWNERS' EQUITY $ 5,507,865 $ 526,464 $36,293,117 $ 2,712,265
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Accumulation units outstanding 1,940,336 270,008 5,804,479 1,677,911
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Accumulation unit value $ 2.838614 $ 1.949805 $ 6.252605 $ 1.616454
----------- ----------- ----------- -----------
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Scudder Variable Life Investment Fund share price $ 6.88 $ 1.00 $ 22.62 $ 11.69
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Scudder Variable Life Investment Fund cost $ 5,259,079 $ 526,464 $23,769,723 $ 2,184,266
----------- ----------- ----------- -----------
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<FN>
See notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
SEPARATE ACCOUNT I OF WASHINGTON NATIONAL INSURANCE COMPANY
STATEMENT OF OPERATIONS (UNAUDITED)
<CAPTION>
Six Months Ended June 30, 1998
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Sub-Account
--------------------------------------------------
Money Capital Growth and
Bond Market Growth Income
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Dividend income $ 179,997 $ 11,590 $ 1,888,389 $ 176,262
----------- ----------- ----------- -----------
Expenses - Note B
Annuity rate guarantee charge 22,396 1,826 141,937 10,198
Accounting service fee 9,598 782 60,830 4,371
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31,994 2,608 202,767 14,569
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NET INVESTMENT INCOME 148,003 8,982 1,685,622 161,693
Unrealized gain on investments- Note C
End of period 248,786 - 12,523,395 527,998
Beginning of period 237,902 - 9,295,975 478,065
NET UNREALIZED GAIN --------------------------------------------------
ON INVESTMENTS 10,884 - 3,227,420 49,933
----------- ----------- ----------- -----------
INCREASE IN NET ASSETS
FROM OPERATIONS $ 158,887 $ 8,982 $ 4,913,042 $ 211,626
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
<FN>
See notes to financial statements.
</TABLE>
<PAGE>
SEPARATE ACCOUNT I OF WASHINGTON NATIONAL INSURANCE COMPANY
<TABLE>
STATEMENTS OF CHANGES IN CONTRACT OWNERS' EQUITY
<CAPTION>
Six Months Ended June 30, 1998
--------------------------------------------------
Sub-Account
--------------------------------------------------
Money Capital Growth and
Bond Market Growth Income
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
ADDITIONS (DEDUCTIONS):
From investment activities:
Net investment income $ 148,003 $ 8,982 $ 1,685,622 $ 161,693
Net unrealized gain on investments 10,884 - 3,227,420 49,933
INCREASE IN CONTRACT OWNERS' EQUITY --------------------------------------------------
FROM OPERATIONS 158,887 8,982 4,913,042 211,626
From capital transactions:
Contract purchase payments 93,288 12,800 466,157 45,179
Withdrawals and contracts surrendered (258,889) (5,186) (2,126,599) (33,399)
Death benefits - - (3,397) -
Net asset value of units transferred, including
exchanges with the Fixed Account 39,397 79,126 138,854 452,244
--------------------------------------------------
INCREASE (DECREASE) IN CONTRACT OWNERS' EQUITY
FROM CAPITAL TRANSACTIONS (126,204) 86,740 (1,524,985) 464,024
--------------------------------------------------
NET INCREASE (DECREASE) IN CONTRACT OWNERS' EQUITY 32,683 95,722 3,388,057 675,650
Contract owners' equity:
Beginning of period 5,475,182 430,742 32,905,060 2,036,615
--------------------------------------------------
End of period $ 5,507,865 $ 526,464 $36,293,117 $ 2,712,265
----------- ----------- ----------- -----------
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ANALYSIS OF CHANGES IN UNITS OUTSTANDING
Units sold 34,071 6,691 78,708 28,381
Units redeemed (92,659) (2,753) (358,682) (21,367)
Units transferred 14,041 40,705 20,706 292,391
----------- ----------- ----------- -----------
INCREASE (DECREASE) IN UNITS OUTSTANDING (44,547) 44,643 (259,268) 299,405
Units outstanding at beginning of period 1,984,883 225,365 6,063,747 1,378,506
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UNITS OUTSTANDING AT END OF PERIOD 1,940,336 270,008 5,804,479 1,677,911
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----------- ----------- ----------- -----------
<FN>
See notes to financial statements.
</TABLE>
SEPARATE ACCOUNT I OF WASHINGTON NATIONAL INSURANCE COMPANY
<TABLE>
STATEMENTS OF CHANGES IN CONTRACT OWNERS' EQUITY
<CAPTION>
Year Ended December 31, 1997
--------------------------------------------------
Sub-Account
--------------------------------------------------
Money Capital Growth and
Bond Market Growth Income
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
ADDITIONS (DEDUCTIONS):
From investment activities:
Net investment income $ 318,594 $ 18,713 $ 1,918,676 $ 71,301
Net unrealized gain on investments 112,534 - 6,936,338 349,287
--------------------------------------------------
INCREASE IN CONTRACT OWNERS' EQUITY
FROM OPERATIONS 431,128 18,713 8,855,014 420,588
From capital transactions:
Contract purchase payments 166,670 28,582 694,103 64,212
Withdrawals and contracts surrendered (1,026,160) (67,842) (4,488,550) (34,813)
Death benefits (31,636) (2,677) (126,828) -
Net asset value of units transferred, including
exchanges with the Fixed Account (216,207) (21,387) 1,460,324 431,836
--------------------------------------------------
INCREASE (DECREASE) IN CONTRACT OWNERS' EQUITY
FROM CAPITAL TRANSACTIONS (1,107,333) (63,324) 2,460,951 461,235
--------------------------------------------------
NET INCREASE (DECREASE) IN CONTRACT OWNERS' EQUITY (676,205) (44,611) 6,394,063 881,823
Contract owners' equity:
Beginning of period 6,151,387 475,353 26,510,997 1,154,792
--------------------------------------------------
End of period $ 5,475,182 $ 430,742 $32,905,060 $ 2,036,615
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
ANALYSIS OF CHANGES IN UNITS OUTSTANDING
Units sold 64,278 15,363 145,443 48,926
Units redeemed (402,790) (37,406) (945,481) (26,970)
Units transferred (81,259) (11,327) 308,412 348,573
----------- ----------- ----------- -----------
INCREASE (DECREASE) IN UNITS OUTSTANDING (419,771) (33,370) (491,626) 370,529
Units outstanding at beginning of period 2,404,654 258,735 6,555,373 1,007,977
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UNITS OUTSTANDING AT END OF PERIOD 1,984,883 225,365 6,063,747 1,378,506
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----------- ----------- ----------- -----------
<FN>
See notes to financial statements.
</TABLE>
<PAGE>
SEPARATE ACCOUNT I OF
WASHINGTON NATIONAL INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
June 30, 1998
NOTE A -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Account: The Separate Account I of Washington National
Insurance Company (the "Separate Account") is a series type
segregated investment account of Washington National Insurance
Company ("WNIC"). WNIC was a wholly-owned subsidiary of Washington
National Corporation ("WNC").
On December 5, 1997, Conseco, Inc., a publicly held specialized
financial holding company, completed the acquisition of WNC.
The merger is not expected to have any effect on the Separate
Account.
On July 1, 1996, the Separate Account converted from an open-end
diversified management investment company to a unit investment
trust and transferred its assets into specified portfolios of the
Scudder Variable Life Investment Fund ("the Fund"), a mutual fund
of the series type, in exchange for shares of the portfolios.
The fair value of the portfolio was equal to the fair value of
assets transferred. This transaction was approved by contract
holders at a special meeting held March 12, 1996.
The Separate Account is registered as an unit investment trust
under the Investment Company Act of 1940. The Separate Account no
longer issues new contracts. There are four sub-accounts within
the Separate Account, each with its own investment objectives and
policies as follows:
Bond Sub-Account -- high level of current income while
preserving capital by investing in fixed income
securities.
Money Market Sub-Account (formerly known as the short-term
portfolio sub-account)-- moderate level of current income
consistent with liquidity and preservation of capital by
investing in one or more types of short-term instruments.
Capital Growth Sub-Account (formerly known as the stock
sub-account)-- long-term capital growth and income by
investing principally in equity-type securities.
Growth and Income Sub-Account -- long-term growth of
capital, current income, and growth income by investing
primarily in common stocks, preferred stocks, and
securities convertible into common stocks of companies
which offer the prospect for growth of earnings while
paying current dividends. This investment option became
available July 1, 1996.
In addition, a contract holder may elect to invest in a fixed
annuity held by WNIC, or its successors, called the Fixed Account.
<PAGE>
SEPARATE ACCOUNT I OF
WASHINGTON NATIONAL INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS - Continued
June 30, 1998
NOTE A -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued
Valuation of Investments: Investments in portfolio shares are
valued using the net asset value of the respective portfolios of
the Fund at the end of each New York Stock Exchange business day.
Investment share transactions are accounted for on a trade date
basis (the date the order to purchase or redeem shares is
executed). Interest income is recorded on the accrual basis and
dividend income is recorded on the ex-dividend date. The cost of
investments in portfolio shares sold is determined on a first-in
first-out basis. The Separate Account does not hold any
investments which are restricted as to resale.
Net investment income and net realized gains (losses) and
unrealized appreciation (depreciation) on investments are
allocated to the contracts on each valuation date based on each
contract's pro rata share of the assets of the Separate Account as
of the beginning of the valuation date.
Accumulation Unit Valuation: Accumulation unit values reflect the
net asset value of each Sub-Account and are computed daily.
NOTE B -- DEDUCTIONS AND CHARGES
Deductions and charges are made from the Separate Account and paid to
WNIC as follows:
As compensation for annuity rate guarantees, WNIC deducts
an amount, computed on a daily basis, which is equal on an
annual basis to .8% of the average net asset value of the
Separate Account.
As compensation for providing financial accounting
services to the Separate Account, WNIC deducts an amount,
computed on a daily basis, equal to an annual rate of .35%
of the average net asset value of the Separate Account.
NOTE C -- INVESTMENTS
Scudder, Stevens & Clark, Inc. (The "Adviser") provides management
and investment advisory services to the Fund. The Adviser provides
investment research and portfolio management services to a number
of mutual funds and other clients. Each Portfolio pays the
Adviser a fee for its investment advisory services at the
following rates:
<TABLE>
Percentage of the Portfolio's
Portfolio Average Daily Net Asset Value
--------- -----------------------------
<S> <C>
Bond .475%
Money Market .370%
Capital Growth .475%
Growth and Income .469%
</TABLE>
<PAGE>
SEPARATE ACCOUNT I OF
WASHINGTON NATIONAL INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS - Continued
June 30, 1998
NOTE C -- INVESTMENTS - Continued
There were no purchases of investments, other than investments in
Fund shares, for the six months ended June 30, 1998 or the year
ended December 31, 1997. Net asset value of Fund shares
represents the year-end fair value of the shares.
NOTE D -- FEDERAL INCOME TAXES
The operations of the Separate Account form a part of, and are
taxed with, the operations of WNIC, which under the Internal
Revenue Code is taxed as a "life insurance company." The Separate
Account is not taxed as a regulated investment company under
Subchapter M of the Code. Under existing federal income tax law,
no taxes are payable on the investment income or on the realized
gains of the Separate Account.
<PAGE>
The registrant hereby incorporates by reference the 1998
Semi-Annual Report of Scudder Variable Life Investment Fund,
file number 811-4257, filed with the Commission on
August 18, 1998.
