<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
2-99959
33-29851
33-31711
33-41858
33-43008
For Quarter Ended September 30, 1997 Commission File Number 33-58853
------------------- 333-11699
333-13087
---------
SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 04-2461439
- ------------------------------- ------------------------
(State or other jurisdiction of (IRS Employer I. D. No.)
incorporation or organization)
One Sun Life Executive Park, Wellesley Hills, MA. 02181
- ------------------------------------------------- ----------
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (617) 237-6030
NONE
------------------------------------------
Former name, former address, and former
fiscal year, if changed since last report.
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.
(1) Yes X No
(2) Yes X No
<PAGE>
SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
INDEX
PAGE
PART I: FINANCIAL INFORMATION NUMBER
Item 1: Financial Statements:*
Balance Sheets -
September 30, 1997 and December 31, 1996 3
Statements of Operations -
Three Months Ended
September 30, 1997 and September 30, 1996 4
Statements of Operations -
Nine Months Ended
September 30, 1997 and September 30, 1996 5
Statements of Capital Stock and Surplus -
Nine Months Ended
September 30, 1997 and September 30, 1996 6
Statements of Cash Flows -
Nine Months Ended
September 30, 1997 and September 30, 1996 7
Notes to Unaudited Financial Statements 8
Item 2: Management's Discussion and Analysis of
Financial Condition and Results of
Operations 10
PART II: OTHER INFORMATION
Item 5: Other Information 12
*The balance sheet at December 31, 1996 has been taken from the audited
financial statements at that date. All other statements are unaudited.
-2-
<PAGE>
Sun Life Assurance Company of Canada (U.S.)
(Wholly-owned subsidiary of
Sun Life Assurance Company of Canada)
Statutory Statements of Admitted Assets, Liabilities and
Capital Stock and Surplus
(in 000's)
<TABLE>
<CAPTION>
<S> <C> <C>
(Unaudited) (See note below)
September 30, December 31,
Admitted assets 1997 1996
------------ ------------------
Bonds $ 2,050,234 $ 2,190,103
Common stocks 151,148 144,043
Mortgage loans on real estate 789,117 938,932
Properties acquired in satisfaction of debt 23,895 23,391
Investment real estate 75,992 76,995
Policy loans 39,505 40,554
Cash & short-term investments 649,015 90,059
Other invested assets 54,377 51,378
Life insurance premiums and annuity considerations due & uncollected 9,166 11,282
Investment income due and accrued 55,669 68,191
Receivable from parent, subsidiaries and affiliates 34,906 20,829
Other assets 987,419 880,141
------------ ------------------
General account assets 4,920,443 4,535,898
Separate account assets
Unitized 8,866,932 6,919,219
Non-unitized 2,413,695 2,108,835
------------ ------------------
Total admitted assets $ 16,201,070 $ 13,563,952
------------ ------------------
------------ ------------------
Liabilities
Aggregate reserve for life policies and contracts $ 2,192,547 $ 2,099,980
Supplementary contracts 2,460 2,205
Policy and contract claims 3,379 2,108
Provision for policyholders' dividends and coupons payable 31,250 27,500
Liability for premium and other deposit funds 1,548,669 1,898,309
Surrender values on cancelled policies 110 72
Interest maintenance reserve 30,668 28,675
Commissions to agents due and accrued 3,636 3,245
General expenses due or accrued 11,175 4,654
Transfers from Separate Accounts due or accrued (294,281) (232,743)
Taxes, licenses and fees due or accrued, excluding FIT 308 342
Federal income taxes due or accrued 48,589 49,479
Unearned investment income 21 19
Amounts withheld or retained by company as agent or trustee 100 27
Remittances and items not allocated 689 1,359
Borrowed money 600,000 0
Asset valuation reserve 63,003 53,911
Other liabilities 12,573 29,738
------------ ------------------
General account liabilities 4,254,896 3,968,880
Separate account liabilities
Unitized 8,866,803 6,919,094
Non-unitized 2,413,695 2,108,835
------------ ------------------
Total liabilities 15,535,394 12,996,809
------------ ------------------
Common capital stock 5,900 5,900
Surplus notes 315,000 315,000
Gross paid in and contributed surplus 199,355 199,355
Unassigned funds 145,421 46,888
Surplus 659,776 561,243
Total common capital stock and surplus 665,676 567,143
------------ ------------------
Total liabilities, capital stock and surplus $ 16,201,070 $ 13,563,952
------------ ------------------
------------ ------------------
</TABLE>
Note: The balance sheet at December 31, 1996 has been taken from the
audited financial statements at that date.
See notes to unaudited statutory financial statements.
-3-
<PAGE>
Sun Life Assurance Company of Canada (U.S.)
(Wholly-owned subsidiary of
Sun Life Assurance Company of Canada)
Statutory Statements of Operations
(in 000's)
<TABLE>
<CAPTION>
<S> <C> <C>
Three Months Ended September 30,
Income 1997 1996
------------------- ----------------
Premiums and annuity considerations $ 67,680 $ 63,307
Deposit-type funds 530,735 400,688
Considerations for supplementary contracts
without life contingencies and dividend accumulations 390 1,180
Net investment income 68,033 70,237
Amortization of interest maintenance reserve 432 517
Net gain from operations from Separate Accounts Statement 4 0
Other income 22,668 19,911
------------------ ----------------
Total 689,942 555,840
------------------ ----------------
Benefits and expenses
Death benefits 9,624 4,626
Annuity benefits 38,763 38,195
Surrender benefits and other fund withdrawals 494,811 323,274
Interest on policy or contract funds 39 198
Payments on supplementary contracts
without life contingencies and of dividend accumulations 315 546
Increase aggregate reserves for life and accident and health policies and contracts 26,880 36,087
Decrease in liability for premium and other deposit funds (123,462) (77,847)
Increase in reserve for supplementary contracts
without life contingencies and for dividend and coupon accumulations 110 661
------------------ ----------------
Total 447,080 325,740
Commissions on premiums and annuity considerations (direct business only) 33,663 26,528
Commissions and expense allowances on reinsurance assumed 4,502 4,463
General insurance expenses 12,512 8,125
Insurance taxes, licenses and fees, excluding federal income taxes 1,453 2,079
Decrease in loading on and cost of collection in excess of loading
on deferred and uncollected premiums (56) (48)
Net transfers to Separate Accounts 148,926 159,850
------------------ ----------------
Total 648,080 526,737
------------------ ----------------
Net gain from operations before dividends to policyholders and FIT 41,862 29,103
Dividends to policyholders 8,114 6,188
------------------ ----------------
Net gain from operations after dividends to policyholders and before FIT 33,748 22,915
Federal income tax benefit (excluding tax on capital gains) (6,193) (4,628)
------------------ ----------------
Net gain from operations after dividends to policyholders and FIT
and before realized capital gains 39,941 27,543
Net realized capital gains (losses) less capital gains tax and transferred to the IMR 3,164 (4,063)
------------------ ----------------
Net income $ 43,105 $ 23,480
------------------ ----------------
</TABLE>
See notes to unaudited statutory financial statements.
-4-
<PAGE>
Sun Life Assurance Company of Canada (U.S.)
(Wholly-owned subsidiary of
Sun Life Assurance Company of Canada)
Statutory Statements of Operations
<TABLE>
<CAPTION>
(in 000's)
Nine Months Ended September 30,
Income 1997 1996
------------- -------------
<S> <C> <C>
Premiums and annuity considerations.................................................... $ 194,085 $ 205,837
Deposit-type funds..................................................................... 1,691,235 1,309,408
Considerations for supplementary contracts
without life contingencies and dividend accumulations............................... 940 2,465
Net investment income.................................................................. 209,363 220,344
Amortization of interest maintenance reserve........................................... 813 994
Net gain from operations from Separate Accounts Statement.............................. 4 0
Other income........................................................................... 61,338 51,720
------------- -------------
Total.................................................................................. 2,157,778 1,790,768
------------- -------------
Benefits and expenses
Death benefits......................................................................... 15,994 9,428
Annuity benefits....................................................................... 109,690 107,718
Surrender benefits and other fund withdrawals.......................................... 1,388,459 1,158,162
Interest on policy or contract funds................................................... 194 719
Payments on supplementary contracts
without life contingencies and of dividend accumulations............................ 766 1,689
Increase aggregate reserves for life and accident and health policies and contracts.... 92,567 126,179
Decrease in liability for premium and other deposit funds.............................. (349,640) (293,567)
Increase in reserve for supplementary contracts
without life contingencies and for dividend and coupon accumulations................ 255 851
------------- -------------
Total.................................................................................. 1,258,285 1,111,179
Commissions on premiums and annuity considerations (direct business only).............. 104,650 79,597
Commissions and expense allowances on reinsurance assumed.............................. 12,858 13,483
General insurance expenses 32,028 27,710
Insurance taxes, licenses and fees, excluding federal income taxes..................... 5,297 6,012
Increase (decrease) in loading on and cost of collection in excess of loading
on deferred and uncollected premiums................................................. (286) 859
Net transfers to Separate Accounts..................................................... 621,996 470,625
------------- -------------
Total.................................................................................. 2,034,828 1,709,465
------------- -------------
Net gain from operations before dividends to policyholders and FIT..................... 122,950 81,303
Dividends to policyholders............................................................. 24,227 19,480
------------- -------------
Net gain from operations after dividends to policyholders and before FIT............... 98,723 61,823
Federal income tax benefit (excluding tax on capital gains)............................ (833) (9,878)
------------- -------------
Net gain from operations after dividends to policyholders and FIT
and before realized capital gains.................................................... 99,556 71,701
Net realized capital gains (losses) less capital gains tax and transferred to the IMR.. 5,183 (2,974)
------------- -------------
Net income............................................................................. $ 104,739 $ 68,727
------------- -------------
</TABLE>
See notes to unaudited statutory financial statements.
-5-
<PAGE>
Sun Life Assurance Company of Canada (U.S.)
(Wholly-owned subsidiary of
Sun Life Assurance Company of Canada)
Statutory Statements of Changes in Capital Stock and Surplus
<TABLE>
<CAPTION>
(in 000's)
Nine Months Ended September 30,
1997 1996
-------------- -------------
<S> <C> <C>
Capital and surplus, Beginning of period....................... $ 567,143 $ 792,452
Net income..................................................... 104,739 68,725
Change in net unrealized capital gains......................... 2,329 8,356
Change in non-admitted assets and related items................ 557 (877)
Change in asset valuation reserve.............................. (9,092) (12,202)
Other changes in surplus in Separate Accounts Statement........ 0 0
Decrease in surplus notes..................................... 0 (335,000)
Miscellaneous gains and losses in surplus...................... 0 0
------------- ------------
Net change in capital and surplus for the period............... 98,533 (270,998)
------------- ------------
Capital and surplus, End of period............................. $ 665,676 $ 521,454
------------- ------------
------------- ------------
</TABLE>
See notes to unaudited statutory financial statements.
-6-
<PAGE>
Sun Life Assurance Company of Canada)
(Wholly-owned subsidiary of
Sun Life Assurance Company of Canada)
Statutory Statements of Cash Flow
<TABLE>
(in 000's) Nine Months Ended September 30,
1997 1996
----------------- --------------
<S> <C> <C>
Cash Provided
Premiums, annuity considerations and deposit funds received $ 1,887,722 $ 1,518,219
Considerations for supplementary contracts and dividend
accumulations received 940 2,465
Net investment income received 236,074 241,173
Other income received 61,338 51,718
----------------- --------------
Total receipts 2,186,074 1,813,575
----------------- --------------
Benefits paid (other than dividends) 1,513,599 1,279,467
Insurance expenses and taxes paid (other than federal income and
capital gains taxes) 147,956 136,438
Net cash transfers to Separate Accounts 683,534 533,964
Dividends paid to policyholders 20,477 16,480
Federal income tax recoveries (excluding tax on capital gains) (317) (16,788)
Other - net 194 719
----------------- --------------
Total payments 2,365,443 1,950,280
----------------- --------------
Net cash from operations (179,369) (136,705)
----------------- --------------
Proceeds from long-term investments sold, matured or repaid
(after deducting taxes on capital gains of $374,528 for 1997,
$3,686,461 for 1996) 820,973 1,434,509
Other cash provided 607,676 2,140
----------------- --------------
Total cash provided from investments 1,428,649 1,436,649
----------------- --------------
Total cash provided 1,249,280 1,299,944
----------------- --------------
Cash Applied
Cost of long-term investments acquired 554,900 1,030,792
Other cash applied 135,424 466,598
----------------- --------------
Total cash applied 690,324 1,497,390
----------------- --------------
Net change in cash and short-term investments 558,956 (197,446)
Cash and short-term investments:
Beginning of year 90,059 317,325
----------------- --------------
End of year $ 649,015 $ 119,879
----------------- --------------
----------------- --------------
</TABLE>
See notes to unaudited statutory financial statements.
-7-
<PAGE>
SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
Notes to Unaudited Financial Statements
(1) General
In management's opinion all adjustments, which include only normal recurring
adjustments, necessary for a fair presentation of the financial statements
have been made.
(2) Management and Service Contracts
Expenses under the agreement with the parent which enables the parent to
provide certain services amounted to approximately $3,927,000 and $10,685,000
for the three and nine month periods in 1997 and $3,294,000 and $13,562,000
for the same periods in 1996.
(3) Investments in Subsidiaries
The following is combined unaudited summarized financial information of the
subsidiaries as of September 30, 1997 and 1996 and for the nine months then
ended:
1997 1996
---- ----
(000's)
-------
Intangible assets $ 9,980 $ 10,668
Other assets, net of liabilities 144,906 140,119
------- -------
Total net assets $ 154,886 $ 150,787
---------- ---------
---------- ---------
Total income $ 665,904 $ 513,021
Total expenses (585,857) (439,852)
Income tax expense (36,944) (32,437)
-------- --------
Net income $ 43,103 $ 40,732
---------- ---------
---------- ---------
The following is combined unaudited summarized financial information of the
subsidiaries for the three months ended September 30, 1997 and 1996 for the
three months ended:
1997 1996
---- ----
Total income $237,369 $183,931
Total expenses (205,368) (154,191)
Income tax expense (15,303) (12,983)
-------- --------
Net income $ 16,698 $ 16,757
-------- --------
-------- --------
-8-
<PAGE>
SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
Notes to Unaudited Financial Statements (continued)
In determining the equity in income of subsidiaries for the periods, the
Registrant has excluded expenses of approximately $11,819,000 and $28,443,000
for the three month and nine month periods in 1997 and $10,355,000 and
$25,365,000 for the same periods in 1996, representing payables to the
Registrant in lieu of federal income taxes.
(4) Investment Income
Net investment income consisted of:
Nine Months Ended
September 30,
------------------
1997 1996
---- ----
(000's)
-------
Interest income from bonds $141,310 $135,661
Interest income from investment income
in common stocks & affiliates 33,681 27,298
Interest income from mortgage loans 59,716 71,410
Real estate investment income 10,290 7,958
Interest income from policy loans 2,230 2,043
Other (353) 1,124
----- ------
Gross investment income 246,874 245,494
Interest on surplus notes and borrowed money 29,375 17,636
Investment expenses 8,136 7,514
-------- --------
$209,363 $220,344
-------- --------
-------- --------
Three Months Ended
September 30,
-----------------
1996 1995
---- ----
(000's)
-------
Interest income from bonds $50,284 $42,418
Interest from investment income in
common stock and affiliates 11,040 8,910
Interest income from mortgage loans 18,500 23,271
Real estate investment income 4,020 2,966
Interest income from policy loans 734 711
Other (263) (71)
----- -----
Gross investment income 84,315 78,205
Interest on surplus notes and
borrowed money 13,727 5,432
Investment expenses 2,555 2,536
------ ------
$68,033 $70,237
------- -------
------- -------
(5) Other
As a result of the external financing arrangement described in Part II, Item 5,
other information, the Registrant received $600 million of cash in exchange
for a $600 million short-term note payable to Holdco. The cash is currently
invested in short-term securities.
-9-
<PAGE>
ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Results of Operations
Nine Months Ended September 30, 1997 and 1996
Net Income
Net income from operations increased by $36 million for the nine months ended
September 30, 1997 as compared to the same period in 1996. Net income
associated with the reinsurance agreements with the parent decreased by $2.1
million in 1997. Prior to reinsurance, earnings from the life line of
business remained relatively flat. The remaining earnings of approximately
$38.1 million are attributed to the Registrant's retirement products and
services lines of business, which markets combination fixed/variable
annuities and group pension guaranteed investment contracts. This increase
in earnings reflects profits being generated from the large in-force block of
annuity business held in both the general account and the separate accounts.
Strong market appreciation in the separate accounts generated a significant
increase in mortality and expense fees, which are calculated as a percentage
of net assets. The beginning period assets held in the unitized separate
accounts increased by over 31% or $1.7 billion for the period ending
September 30, 1997 as compared to the same period in 1996. The profits
associated with the growth in this business line more than offset the
additional strain associated with sales of new business for the nine months
ended September 30, 1997, as compared to the same period in 1996. Federal
income tax expense increased, reflecting the increase in earnings.
Income
Total income increased $367 million for the period ended September 30, 1997
as compared to the same period in 1996. Reinsurance income increased
approximately $6.8 million. Premiums and annuity considerations decreased by
$8.9 million, reflecting decreased annuitizations. Sales of combination
fixed/variable annuities (net of annuitizations) increased by $381.8 million,
reflecting the introduction of a new dollar cost averaging program for
annuities. Under the dollar cost averaging program, deposits are made into
the fixed portion of the annuity contract and receive a bonus rate of
interest for the first policy year. During the year, the fixed deposit is
exchanged to the variable portion of the contract in equal periodic
installments. Considerations for supplementary contracts decreased by $1.5
million. Net investment income and amortization of the interest maintenance
reserve decreased by $11.2 million, reflecting a decrease in the general
account invested assets from year end of approximately $400 million after
adjusting for the $600 million transfer described in Note 5 of the Notes to
Unaudited Financial Statements.
Benefits and Expenses
Benefits and expenses after dividends to policyholders increased by $330.1
million for the period ended September 30, 1997 as compared to the same
period in 1996. Reinsurance benefits and expenses increased by $8.9 million.
Deaths, annuity payments and surrender benefits and other fund withdrawals
increased by $227.9 million, reflecting surrenders of a block of annuity
business for which the seven year surrender charge period has expired.
Initial sales of this particular block of business issued seven years prior
totalled over $450 million. Partially offsetting this increase is a
reduction in the group pension surrenders. Interest on policy or contract
funds decreased by $.5 million. Payments on supplementary contracts
decreased by $.9 million. Policy reserves decreased by $28.7 million,
reflecting both increased surrender activity and a decrease in reserves held
for minimum death benefit guarantees. The change in the liability for
premium and other deposit funds decreased by $56.1 million, reflecting the
increase in surrenders. The reserve for supplementary contracts decreased by
$.6 million. Commissions increased by $25.1 million, reflecting the increase
in total sales of combination fixed/variable annuities. General insurance
expenses increased by $4.3 million, reflecting increased staff and other
costs associated with the increased block of variable annuities. Insurance,
taxes, licenses and fees decreased by $.7 million. Net transfers to the
separate accounts increased by $151.4 million, reflecting increased sales of
combination fixed/variable annuities.
-10-
<PAGE>
ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Results of Operations
Three Months Ended September 30, 1997 and 1996
Net Income
Net income from operations increased by $19.6 million for the three months
ended September 30, 1997 as compared to the same period in 1996. Net income
associated with the reinsurance agreements decreased by $5.8 million. The
remaining earnings of approximately $25.4 million are attributable to the
retirement products and services line of business. The primary factors
leading to the increased earnings correspond to those discussed under the
nine months results. Profits are being generated from the large in-force
block of annuity business held in both the general and separate accounts.
Strong market appreciation in the separate account assets generated a
significant increase in the mortality and expense fees. The profits
associated with the growth in this business line more than offset the
additional strain associated with sales of new business for the three months
ended September 30, 1997 as compared to the same period in 1996. Federal
income tax expense increased, reflecting the increase in earnings.
Income
Total income increased by $134.1 million for the three months ended September
30, 1997 as compared to the same period in 1996. Reinsurance income
increased by approximately $5.3 million. Premiums and annuity considerations
increased by $1.8 million, reflecting increased annuitizations for the three
month period. Sales of combination fixed/variable annuities increased by
$130 million, reflecting the introduction of the dollar cost averaging
program discussed under the nine months results of operations. A reduction
of sales of guaranteed investment contracts partially offset this increase.
Net investment income and amortization of the interest maintenance reserve
decreased by $2.2 million, reflecting the decrease in the general account
assets described above. Considerations for supplementary contracts decreased
by $.8 million for the three months ended September 30, 1997 as compared to
the same period in 1996.
Benefits and Expenses
Benefits and expenses after dividends to policyholders increased by $123.3
million for the three months ended September 30, 1997 as compared to the same
period in 1996. Reinsurance benefits and expenses increased by $11.1
million. Deaths, annuity payments and surrender benefits and other fund
withdrawals increased by $169.6 million, reflecting the increased surrenders
of fixed annuities due to the block of annuity business for which the
surrender charge period expired. Initial sales of this block of business
issued seven years prior, totalled $134.4 million. Policy reserves,
including supplementary contracts, decreased by $11.7 million, reflecting a
decrease in the minimum death benefit reserves. The change in liability for
premium and other deposit funds decreased by $45.6 million, reflecting the
increased surrender activity. Commission increased by $7.1 million,
reflecting the increase in sales. General insurance expenses increased by
$4.3 million, reflecting increased staff and other costs associated with the
increased block of variable annuities. Taxes, licenses and fees decreased by
$.6 million. Net transfers to separate accounts decreased by $10.9 million,
reflecting increased mortality and expense fees due to the growth in separate
account assets and increased surrenders from separate accounts.
-11-
<PAGE>
PART II: OTHER INFORMATION
Item 5: Other Information
The Registrant's parent company, Sun Life Assurance Company of Canada has
established a wholly-owned subsidiary, Sun Life of Canada (U.S.) Holdings,
Inc. ("Holdco"), a Delaware corporation, to serve as the holding company for
the Registrant and its subsidiaries, and for general corporate financing
purposes. As of May 1, 1997, Holdco owns all of the outstanding common stock
of the Registrant. The management and day-to-day operations of the Registrant
have not changed, and the Registrant believes that this transaction does not
constitute a change of control. Holdco was organized in connection with a
financing arrangement under Rule 144A of the Securities Act of 1933 that
raised $600 million on May 6, 1997. The proceeds of this financing
arrangement are to be used for general corporate purposes including (but not
limited to) funding existing corporate operations as well as for possible
future acquisition and business opportunities of Sun Life Assurance Company
of Canada and its subsidiaries, including the Registrant. It is expected that
approximately half of the proceeds will be used by the Registrant for its
business purposes.
-12-
<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.
Sun Life Assurance Company
of Canada (U.S.)
Date November 13, 1997 s/Margaret S. Mead
-------------------
Margaret S. Mead
Secretary
Date November 13, 1997 s/Robert P. Vrolyk
-------------------
Robert P. Vrolyk
Vice President
and Actuary
-13-
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 7
<LEGEND>
This schedule contains summary financial information extracted from the balance
sheet and statement of operations found on pages 3 and 5 of the company's Form
10Q for the year-to-date and is qualified in its entirety by refernce to such
financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<DEBT-HELD-FOR-SALE> 0
<DEBT-CARRYING-VALUE> 2,050,233
<DEBT-MARKET-VALUE> 2,149,831
<EQUITIES> 151,148
<MORTGAGE> 789,117
<REAL-ESTATE> 99,888
<TOTAL-INVEST> 3,184,268
<CASH> 649,015
<RECOVER-REINSURE> 0
<DEFERRED-ACQUISITION> 0
<TOTAL-ASSETS> 16,201,073
<POLICY-LOSSES> 2,195,007
<UNEARNED-PREMIUMS> 0
<POLICY-OTHER> 3,489
<POLICY-HOLDER-FUNDS> 1,548,669
<NOTES-PAYABLE> 0
0
0
<COMMON> 5,900
<OTHER-SE> 659,777
<TOTAL-LIABILITY-AND-EQUITY> 16,201,073
1,886,260
<INVESTMENT-INCOME> 210,180
<INVESTMENT-GAINS> 5,183
<OTHER-INCOME> 61,338
<BENEFITS> 1,904,507
<UNDERWRITING-AMORTIZATION> 0
<UNDERWRITING-OTHER> 154,547
<INCOME-PRETAX> 103,907
<INCOME-TAX> (832)
<INCOME-CONTINUING> 104,739
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 104,739
<EPS-PRIMARY> 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>
