<PAGE> 1
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL QUARTER ENDED JUNE 30, 1995
COMMISSION FILE NUMBER 33-26322; 33-46827; 33-52254; 33-60290; 33-58303
MERRILL LYNCH LIFE INSURANCE COMPANY
(Exact name of Registrant as specified in its charter)
<TABLE>
<S> <C>
ARKANSAS 91-1325756
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
</TABLE>
800 SCUDDERS MILL ROAD
PLAINSBORO, NEW JERSEY 08536
(Address of Principal Executive Offices)
(609) 282-1429
(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
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
COMMON 200,000
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.
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<PAGE> 2
PART I Financial Information
I-1
<PAGE> 3
<PAGE>
MERRILL LYNCH LIFE INSURANCE COMPANY
(a wholly-owned subsidiary of Merrill Lynch Insurance Group,
Inc.)
BALANCE SHEETS
(Dollars in Thousands) (Unaudited)
=================================================================
<TABLE>
<CAPTION>
ASSETS June 30, December 31,
1995 1994
--------------- ---------------
<S> <C> <C>
INVESTMENTS:
Fixed maturity securities available for sale, at estimated fair value
(amortized cost: 1995 - $3,877,954; 1994 - $4,014,272) $ 3,969,851 $ 3,867,833
Equity securities available for sale, at estimated fair value
(cost: 1995 - $14,976; 1994 - $15,946) 16,930 16,777
Mortgage loans on real estate 127,564 149,249
Real estate available for sale 8,192 12,955
Policy loans on insurance contracts 1,006,671 985,213
--------------- ---------------
Total Investments 5,129,208 5,032,027
CASH AND CASH EQUIVALENTS 86,262 139,087
ACCRUED INVESTMENT INCOME 97,641 95,133
DEFERRED POLICY ACQUISITION COSTS 377,417 466,334
FEDERAL INCOME TAXES - DEFERRED 23,993 38,919
REINSURANCE RECEIVABLES 1,707 1,832
RECEIVABLES FROM AFFILIATES - NET 0 3,113
OTHER ASSETS 55,990 28,656
SEPARATE ACCOUNTS ASSETS 6,308,912 5,798,973
--------------- ---------------
TOTAL ASSETS $ 12,081,130 $ 11,604,074
=============== ===============
See notes to financial statements. (Continued)
</TABLE>
<PAGE>
MERRILL LYNCH LIFE INSURANCE COMPANY
(a wholly-owned subsidiary of Merrill Lynch Insurance Group,
Inc.)
BALANCE SHEETS
(Concluded) (Dollars in Thousands) (Unaudited)
=================================================================
<TABLE>
<CAPTION>
LIABILITIES AND STOCKHOLDER'S EQUITY June 30, December 31,
1995 1994
--------------- ---------------
<S> <C> <C>
LIABILITIES:
POLICY LIABILITIES AND ACCRUALS:
Policyholders' account balances $ 5,030,090 $ 5,148,971
Claims and claims settlement expenses 27,344 26,177
--------------- ---------------
Total policy liabilities and accruals 5,057,434 5,175,148
OTHER POLICYHOLDER FUNDS 14,670 21,221
LIABILITY FOR GUARANTY FUND ASSESSMENTS 23,262 24,774
OTHER LIABILITIES 29,986 36,775
FEDERAL INCOME TAXES - CURRENT 23,119 2,274
AFFILIATED PAYABLES 6,005 0
SEPARATE ACCOUNTS LIABILITIES 6,300,626 5,784,311
--------------- ---------------
Total Liabilities 11,455,102 11,044,503
--------------- ---------------
STOCKHOLDER'S EQUITY:
Common stock, $10 par value - 200,000 shares
authorized, issued and outstanding 2,000 2,000
Additional paid-in capital 535,450 535,450
Retained earnings 102,171 66,005
Net unrealized investment loss (13,593) (43,884)
--------------- ---------------
Total Stockholder's Equity 626,028 559,571
--------------- ---------------
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY $ 12,081,130 $ 11,604,074
=============== ===============
See notes to financial statements.
</TABLE>
<PAGE>
MERRILL LYNCH LIFE INSURANCE COMPANY
(a wholly-owned subsidiary of Merrill Lynch Insurance Group,
Inc.)
STATEMENTS OF EARNINGS
(Dollars in Thousands) (Unaudited)
=================================================================
<TABLE>
<CAPTION>
Six Months Ended
June 30,
----------------------------------
1995 1994
---------------- ----------------
<S> <C> <C>
REVENUES:
Investment revenue:
Net investment income $ 192,129 $ 231,018
Net realized investment gains (losses) 1,334 (10,173)
Policy charge revenue 69,304 53,841
---------------- ----------------
Total Revenues 262,767 274,686
---------------- ----------------
BENEFITS AND EXPENSES:
Interest credited to policyholders' account balances 134,245 172,074
Market value adjustment expense 1,216 5,512
Policy benefits (net of reinsurance recoveries: 1995 - $3,996;
1994 - $3,211) 10,823 8,064
Reinsurance premium ceded 6,929 6,993
Amortization of deferred policy acquisition costs 33,671 36,286
Insurance expenses and taxes 20,255 19,016
---------------- ----------------
Total Benefits and Expenses 207,139 247,945
---------------- ----------------
Earnings Before Federal Income Tax Provision 55,628 26,741
FEDERAL INCOME TAX PROVISION (BENEFIT):
Current 20,845 11,017
Deferred (1,383) (1,761)
---------------- ----------------
Total Federal Income Tax Provision 19,462 9,256
---------------- ----------------
NET EARNINGS $ 36,166 $ 17,485
================ ================
See notes to financial statements.
</TABLE>
<PAGE>
MERRILL LYNCH LIFE INSURANCE COMPANY
(a wholly-owned subsidiary of Merrill Lynch Insurance Group,
Inc.)
STATEMENTS OF EARNINGS
(Dollars in Thousands) (Unaudited)
=================================================================
<TABLE>
<CAPTION>
Three Months Ended
June 30,
-----------------------------------
1995 1994
---------------- ----------------
<S> <C> <C>
REVENUES:
Investment revenue:
Net investment income $ 94,549 $ 108,539
Net realized investment gains (losses) 1,396 (5,550)
Policy charge revenue 35,214 28,122
---------------- ----------------
Total Revenues 131,159 131,111
---------------- ----------------
BENEFITS AND EXPENSES:
Interest credited to policyholders' account balances 65,889 81,014
Market value adjustment expense 998 781
Policy benefits (net of reinsurance recoveries: 1995 - $2,162;
1994 - $1,706) 6,055 4,398
Reinsurance premium ceded 3,501 3,430
Amortization of deferred policy acquisition costs 16,373 16,873
Insurance expenses and taxes 10,006 9,523
---------------- ----------------
Total Benefits and Expenses 102,822 116,019
---------------- ----------------
Earnings Before Federal Income Tax Provision 28,337 15,092
FEDERAL INCOME TAX PROVISION (BENEFIT):
Current 12,522 2,043
Deferred (2,608) 3,220
---------------- ----------------
Total Federal Income Tax Provision 9,914 5,263
---------------- ----------------
NET EARNINGS $ 18,423 $ 9,829
================ ================
See notes to financial statements.
</TABLE>
<PAGE>
MERRILL LYNCH LIFE INSURANCE COMPANY
(a wholly-owned subsidiary of Merrill Lynch Insurance Group,
Inc.)
STATEMENTS OF STOCKHOLDER'S EQUITY
(Dollars in Thousands) (Unaudited)
====================================================================
<TABLE>
<CAPTION>
Net
Additional unrealized Total
Common paid-in Retained investment stockholder's
stock capital earnings loss equity
------------ ------------- ------------- ------------- -----------------
<S> <C> <C> <C> <C> <C>
BALANCE, JANUARY 1, 1994 $ 2,000 $ 637,590 $ 47,860 $ (395) $ 687,055
Dividend to Parent 0 (102,140) (47,860) 0 (150,000)
Net earnings 0 0 66,005 0 66,005
Net unrealized investment loss 0 0 0 (43,489) (43,489)
------------ ------------ ------------- ------------- -----------------
BALANCE, DECEMBER 31, 1994 2,000 535,450 66,005 (43,884) 559,571
Net earnings 0 0 36,166 0 36,166
Net unrealized investment gain 0 0 0 30,291 30,291
------------ ------------ ------------- ------------- -----------------
BALANCE, JUNE 30, 1995 $ 2,000 $ 535,450 $ 102,171 $ (13,593) $ 626,028
============ ============ ============= ============= =================
See notes to financial statements.
</TABLE>
<PAGE>
MERRILL LYNCH LIFE INSURANCE COMPANY
(a wholly-owned subsidiary of Merrill Lynch Insurance Group,
Inc.)
STATEMENTS OF CASH FLOWS
(Dollars in Thousands) (Unaudited)
====================================================================
<TABLE>
<CAPTION>
Six Months Ended
June 30,
----------------------------------
1995 1994
---------------- ----------------
<S> <C> <C>
OPERATING ACTIVITIES:
Net earnings $ 36,166 $ 17,485
Adjustments to reconcile net earnings to net cash and cash
equivalents provided (used) by operating activities:
Amortization of deferred policy acquisition costs 33,671 36,286
Capitalization of policy acquisition costs (26,556) (66,463)
Depreciation and amortization (3,796) (2,474)
Net realized investment (gains) losses (1,334) 10,173
Interest credited to policyholders' account balances 134,245 172,074
Benefit for deferred Federal income tax (1,383) (1,761)
Cash and cash equivalents provided (used) by changes in operating
assets and liabilities:
Accrued investment income (2,508) 21,096
Claims and claims settlement expenses 1,167 3,509
Federal income taxes - current 20,844 895
Other policyholder funds (6,551) (1,604)
Liability for guaranty fund assessments (1,512) (1,871)
Receivable / payable from affiliates - net 9,118 (4,034)
Change in policy loans (21,458) (34,244)
Change in investment trading securities 0 (8,060)
Other, net (33,998) (14,456)
---------------- ----------------
Net cash and cash equivalents provided by operating activities
136,115 126,551
---------------- ----------------
INVESTING ACTIVITIES:
Fixed maturity securities sold 271,951 546,542
Fixed maturity securities matured 402,835 814,748
Fixed maturity securities purchased (534,484) (323,072)
Equity securities available for sale sold 1,411 6,972
Mortgage loans on real estate principal payments received 20,719 13,021
Real estate available for sale - improvements acquired 0 (608)
Real estate available for sale sold 6,803 5,810
Investment in Separate Accounts (255) (14,696)
Recapture of investment in Separate Accounts 6,559 0
---------------- ----------------
Net cash and cash equivalents provided by investing activities
175,539 1,048,717
---------------- ----------------
</TABLE>
See notes to financial statements (continued)
<PAGE>
MERRILL LYNCH LIFE INSURANCE COMPANY
(a wholly-owned subsidiary of Merrill Lynch Insurance Group,
Inc.)
STATEMENTS OF CASH FLOWS
(Concluded) (Dollars in Thousands) (Unaudited)
================================================================
<TABLE>
<CAPTION>
Six Months Ended
June 30,
----------------------------------
1995 1994
---------------- ----------------
<S> <C> <C>
FINANCING ACTIVITIES:
Policyholders' account balances:
Deposits 285,864 541,888
Withdrawals (includes transfers to Separate Accounts) (650,343) (1,741,182)
---------------- ----------------
Net cash and cash equivalents used by financing activities (364,479) (1,199,294)
---------------- ----------------
NET DECREASE IN CASH AND CASH EQUIVALENTS (52,825) (24,026)
CASH AND CASH EQUIVALENTS:
Beginning of year 139,087 122,218
---------------- ----------------
End of period $ 86,262 $ 98,192
================ ================
Supplementary Disclosure of Cash Flow Information:
Cash paid for:
Federal income taxes $ 0 $ 10,122
Intercompany interest $ 641 $ 311
See notes to financial statements
</TABLE>
<PAGE>
MERRILL LYNCH LIFE INSURANCE COMPANY
(a wholly-owned subsidiary of Merrill Lynch Insurance Group,
Inc.)
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
=================================================================
NOTE 1: BASIS OF PRESENTATION:
Merrill Lynch Life Insurance Company (the "Company") is a wholly-
owned subsidiary of Merrill Lynch Insurance Group, Inc. ("MLIG").
The Company is an indirect wholly-owned subsidiary of Merrill
Lynch & Co., Inc. ("Merrill Lynch & Co."). The Company sells life
insurance and annuity products, including variable life insurance
and variable annuities.
The condensed financial statements included herein have been
prepared by the Company without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission. Certain
information and footnote disclosures normally included in
financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations. In the opinion of
management, the unaudited financial statements presented herein
include all adjustments (consisting only of normal recurring
accruals) necessary for a fair presentation of the financial
position and the results of operations in accordance with
generally accepted accounting principles for the periods
presented. Results for the three months and six months ended
June 30, 1995 and 1994 are not necessarily indicative of annual
results. These unaudited financial statements should be read in
conjunction with the financial statements and the notes thereto
included in the Company's 1994 Annual Report on Form 10-K ("1994
Report").
NOTE 2. STATUTORY ACCOUNTING PRACTICES:
The Company maintains its statutory accounting records in
conformity with accounting practices prescribed or permitted by
the Insurance Department of the State of Arkansas and the
National Association of Insurance Commissioners. Statutory
capital and surplus at June 30, 1995 and December 31, 1994, was
$337.1 million and $264.4 million, respectively. For the six
months ended June 30, 1995 and 1994, statutory net income was
$63.3 million and $5.9 million, respectively.
NOTE 3. ACCOUNTING CHANGES:
In the first quarter of 1995, the Company adopted Statement of
Financial Accounting Standards ("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". SFAS No. 114 establishes accounting standards for
creditors to measure the impairment of certain loans. SFAS No.
118 amends SFAS No. 114 to allow creditors to use existing
methods for recognizing interest income on an impaired loan,
rather than the method originally required by SFAS No. 114. The
impact of these pronouncements on the Company's financial
statements as of June 30, 1995 was not material.
NOTE 4. INVESTMENTS:
The Company's investments in debt and equity securities are
classified as available for sale and are recorded at fair value.
The Company is required to adjust deferred policy acquisition
costs and certain policyholder liabilities associated with
investments classified as available for sale. These adjustments
are recorded in stockholder's equity and assume that the
unrealized gain or loss on available for sale securities was
realized. These investments primarily support in-force, universal
life-type contracts under SFAS No. 97, "Accounting and Reporting
by Insurance Enterprises for Certain Long-Duration Contracts and
for Realized Gains and Losses from the Sale of Investments". The
table that follows provides the components of the unrealized loss
recorded in stockholder's equity for available for sale
investments:
<TABLE>
<CAPTION>
June 30, Dec. 31,
1995 1994
-------------- ----------------
<S> <C> <C>
Assets:
Fixed maturity securities available for sale $ 91,897 $ (146,439)
Equity securities available for sale 1,954 831
Deferred policy acquisition costs (9,582) 72,220
Federal income taxes - deferred 7,319 23,629
Separate Account Assets (252) (549)
-------------- ----------------
91,336 (50,308)
-------------- ----------------
Liabilities:
Policyholders' account balances 104,929 (6,424)
-------------- ----------------
Stockholder's equity:
Net unrealized investment loss $ (13,593) $ (43,884)
============== ================
</TABLE>
<PAGE>
Item 2 Management's Narrative Analysis of the Results of
Operations
This Management's Narrative Analysis of the Results of Operations
should be read in conjunction with the accompanying unaudited
financial statements and notes thereto, in addition to the 1994
Financial Statements and Notes to Financial Statements and the
Management's Discussion and Analysis of Financial Condition and
Results of Operations filed in the 1994 Report.
Changes in revenues and expenses in most cases are similar for
the three month and six month periods. Therefore, the discussion
emphasizes the comparison between the six months of 1995 and
1994, with additional information on the three month periods
presented where appropriate.
Business Overview
The Company's earnings are principally derived from two sources;
the net investment income from investment of fixed rate life
insurance and annuity contract owner deposits less interest
credited to contract owners, commonly known as spread, and fees
charged to variable life insurance and variable annuity contract
owners. The costs associated with acquiring contract owner
deposits are amortized over the period in which the Company
anticipates holding those funds. In addition, the Company incurs
expenses associated with the maintenance of in-force contracts.
New life insurance premiums and annuity deposits received in the
first six months of 1995 and 1994 were $286 million and $542
million, respectively. Variable annuity deposits received during
the first quarter of 1995 decreased $329 million to $147 million
as compared to the same period in 1994. However, modified
guaranteed annuity sales increased $66 million from $25 million
during the first six months of 1994 to $91 million during the
first six months of 1995. The increase in modified guaranteed
annuity sales trended higher during the first quarter of 1995,
however, sales decreased during the second quarter as interest
rates declined. The decline in total life insurance and annuity
deposits received during the first six months of 1995 as compared
to the same period in 1994 is reflective of increased competition
by non-affiliated insurers whose products may also be sold
through Merrill Lynch & Co.'s retail distribution network.
Additionally, the volatility in the equity markets during 1995
resulted in reduced investor demand for the Company's variable
annuity product.
During the first six months of 1995, approximately $407 million
of fixed deferred annuity liabilities reached the expiration of
their interest rate guarantee period. At the expiration of an
interest rate guarantee period, the contract owner has an option
to either surrender the contract without incurring a surrender
charge, or to "renew" with an adjustment of the interest
crediting rate to the prevailing rate at the time of renewal. The
Company has offered those contract owners electing to surrender
the opportunity to exchange their contract for either a variable
annuity or market value adjusted annuity contract. The following
table summarizes the contract owners' selections for the first
six months of 1995 and 1994:
<TABLE>
<CAPTION>
1995 1994
------------------ --------------------
Amount % Amount %
------------ ----- -------------- -----
(Dollars in Millions)
<S> <C> <C> <C> <C>
Renewed with an adjustment to the
applicable interest crediting rate $ 97 24% $ 262 16%
Exchanged into either the variable annuity
product or the market value adjusted
annuity product offered by the Company 141 35% 735 46%
Surrendered 169 41% 602 38%
------------ ----- -------------- -----
Total $ 407 100% $ 1,599 100%
============ ===== ============== =====
</TABLE>
The rates of renewal, exchange and surrender experienced are
consistent with management's expectations.
To fund all business activities, the Company maintains a high
quality and liquid investment portfolio. As of June 30, 1995, the
Company's assets included $3.419 billion of cash, short-term
investments and investment grade publicly traded fixed maturity
securities that could be liquidated if funds were required.
As of June 30, 1995, approximately $248 million (6.2%) of the
Company's fixed maturity securities were considered non-
investment grade. The Company defines non-investment grade as
unsecured corporate debt obligations which do not have a rating
equivalent to Standard and Poor's BBB or higher (or similar
rating agency), and are not guaranteed by an agency of the
federal government. Non-investment grade securities are
speculative and are subject to significantly greater risks
related to the creditworthiness of the issuers and the liquidity
of the market for such securities. The Company carefully selects,
and closely monitors, such investments.
During the first six months of 1995, the Company foreclosed on
one mortgage loan with a current estimated fair value of $1
million. The Company anticipates that it will foreclose on a $22
million commercial mortgage loan during the third quarter 1995.
The carrying value approximates the fair value of these
properties. Additionally, during the first six months of 1995,
the Company sold two real estate properties with a combined
carrying value of $5 million for a gain of $1 million. Merrill
Lynch Life continues to carry reserves of $36 million for
potential losses from mortgage loans.
Results of Operations
For the six month periods ended June 30, 1995 and 1994, the
Company reported net earnings of $36 million and $17 million,
respectively. For the three month periods ended June 30, 1995 and
1994, the Company reported $18 million and $10 million,
respectively.
Net investment income and interest credited to policyholders'
account balances for the six months ended June 30, 1995 as
compared to the same period in 1994 have declined by
approximately $39 million and $38 million, respectively,
resulting in a $1 million reduction in interest spread. The
reductions in net investment income, interest credited to
policyholders' account balances and interest spread are primarily
attributable to the reduction in fixed rate contracts in-force.
The Company experienced net realized investment gains (losses) of
$1 million and $(10) million for the six months ended June 30,
1995 and 1994, respectively. During 1994, the Company's trading
portfolios experienced $12 million of realized and unrealized
losses. The Company ceased utilizing the trading portfolios
during the fourth quarter 1994. Additionally, the Company
recorded $4 million of valuation allowances on its commercial
mortgage loan portfolio during 1994. No commercial mortgage loan
valuation allowances have been recorded during 1995. The
remaining change in realized investment gains (losses) is
primarily attributable to normal sales activity from the
available for sale portfolios.
Policy charge revenue increased approximately $15 million during
the current six month period as compared to the same period in
1994. During the fourth quarter 1994, the Company and Merrill
Lynch Asset Management, L.P. ("MLAM") entered into an agreement
pursuant to which MLAM paid to the Company a fee in an amount
equal to a portion of the annual gross investment advisory fees
received by MLAM from Merrill Lynch Series Fund, Inc. ("Series
Fund") and Merrill Lynch Variable Series Funds, Inc. ("Variable
Series Funds"). The Company invests in the various mutual fund
portfolios of the Series Fund and the Variable Series Funds in
connection with the variable life insurance and variable
annuities the Company has in-force. The Company received $7
million of revenue as a result of this agreement during the first
six months of 1995. The remaining increase in policy charge
revenue is primarily attributable to the increase in
policyholders' account balances of the variable annuity product.
The market value adjustment expense is attributable to the
Company's market value adjusted annuity product. This contract
provision results in a market value adjustment to the cash
surrender value of those contracts which are surrendered before
the expiration of their interest rate guarantee period. The
market value adjustment expense has decreased $4 million during
the current six month period as compared to the same period
during 1994 primarily as a result of the interest rate
environment during 1995 as compared to 1994. During the first six
months of 1994 interest rates were generally lower than during
the first six months of 1995. The market value adjustment expense
generally changes in an inverse relationship with the movement of
interest rates.
Policy benefits increased approximately $3 million from $8
million for the first six months of 1994 to $11 million for the
current six month period. This increase is primarily attributable
to an increase in mortality claims during the current six month
period as compared to the same period during 1994.
Amortization of deferred policy acquisition costs declined $3
million during the current period as compared to the same period
during 1994. The decrease in amortization is primarily
attributable to a decline in fixed annuity contracts in-force
partially offset by the increase in variable annuity contracts in-
force.
Insurance expenses and taxes increased $1 million during the
current six month period as compared to the same period in 1994.
This increase is primarily attributable to an increase in non-
capitalizable commission expense paid on in-force life and
annuity contracts.
<PAGE>
<PAGE> 4
PART II Other Information
Item 1. Legal Proceedings.
Nothing to report.
Item 5. Other Information.
Nothing to report.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits.
Financial Data Schedule.
(b) Reports on Form 8-K.
None.
I-2
<PAGE> 5
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.
MERRILL LYNCH LIFE INSURANCE COMPANY
/s/ JOSEPH E. CROWNE
-----------------------------------------
Joseph E. Crowne
Senior Vice President and
Chief Financial Officer
Date: August 10, 1995
I-3
<PAGE> 6
EXHIBIT INDEX
-------------
Exhibit
No. Description
- ------- -----------
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 7
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<DEBT-HELD-FOR-SALE> 3,969,851
<DEBT-CARRYING-VALUE> 0
<DEBT-MARKET-VALUE> 0
<EQUITIES> 16,930
<MORTGAGE> 127,564
<REAL-ESTATE> 8,192
<TOTAL-INVEST> 5,129,208
<CASH> 86,262
<RECOVER-REINSURE> 1,707
<DEFERRED-ACQUISITION> 377,417
<TOTAL-ASSETS> 12,081,130
<POLICY-LOSSES> 27,344
<UNEARNED-PREMIUMS> 0
<POLICY-OTHER> 14,670
<POLICY-HOLDER-FUNDS> 5,030,090
<NOTES-PAYABLE> 0
<COMMON> 2,000
0
0
<OTHER-SE> 624,028
<TOTAL-LIABILITY-AND-EQUITY> 12,081,130
0
<INVESTMENT-INCOME> 192,129
<INVESTMENT-GAINS> 1,334
<OTHER-INCOME> 69,304
<BENEFITS> 10,823
<UNDERWRITING-AMORTIZATION> 33,671
<UNDERWRITING-OTHER> 20,255
<INCOME-PRETAX> 55,628
<INCOME-TAX> 19,462
<INCOME-CONTINUING> 36,166
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 36,166
<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>
