<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(MARK ONE)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER 1-11340
LIFE RE CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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<S> <C>
DELAWARE 01-0437851
(STATE OR OTHER JURISDICTION OF INCORPORATION OR (I.R.S. EMPLOYER IDENTIFICATION NO.)
ORGANIZATION)
</TABLE>
969 HIGH RIDGE ROAD
STAMFORD, CONNECTICUT 06905
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
(203) 321-3000
(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 [ ]
Common stock outstanding ($.001 par value) as of May 4, 1998: 17,279,279
shares
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TABLE OF CONTENTS
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ITEM PAGE
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PART I -- FINANCIAL INFORMATION
1 Financial Statements
Independent Accountants' Review Report...................... 2
Condensed Consolidated Balance Sheets (Unaudited) March 31,
1998 and
December 31, 1997........................................... 3
Condensed Consolidated Statements of Income (Unaudited)
Three months ended March 31, 1998 and 1997.................. 4
Condensed Consolidated Statements of Cash Flows (Unaudited)
Three months ended March 31, 1998 and 1997.................. 5
Notes to Condensed Consolidated Financial Statements
March 31, 1998 (Unaudited).................................. 6
2 Management's Discussion and Analysis of Financial Condition
and Results of Operations................................... 8
PART II -- OTHER INFORMATION
6 Exhibits and Reports on Form 8-K............................ 11
</TABLE>
1
<PAGE> 3
PART I -- FINANCIAL INFORMATION
ITEM 1
INDEPENDENT ACCOUNTANTS' REVIEW REPORT
The Board of Directors
Life Re Corporation
We have reviewed the accompanying condensed consolidated balance sheets of
Life Re Corporation and its subsidiaries as of March 31, 1998, and the related
condensed consolidated statements of income and cash flows for the three-month
periods ended March 31, 1998 and 1997. These condensed consolidated financial
statements are the responsibility of the Company's management.
We conducted our reviews 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, which will be performed
for the full year with the objective of expressing an opinion regarding the
financial statements taken as a whole. Accordingly, we do not express such an
opinion.
Based on our reviews, we are not aware of any material modifications that
should be made to the accompanying condensed consolidated 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 sheets of Life Re Corporation and
subsidiaries as of December 31, 1997 and the related consolidated statements of
income, changes in common shareholders' equity and cash flows for the year then
ended (not presented herein) and in our report dated February 12, 1998 (except
for Notes 9 and 10, as to which the date is March 17, 1998), we expressed an
unqualified opinion on those consolidated financial statements. In our opinion,
the information set forth in the accompanying condensed consolidated balance
sheets as of December 31, 1997, is fairly stated, in all material respects, in
relation to the consolidated balance sheets from which it has been derived.
/s/ ERNST & YOUNG LLP
Stamford, Connecticut
April 30, 1998
2
<PAGE> 4
LIFE RE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1998 1997
------------- ---------------
(IN THOUSANDS, EXCEPT SHARE DATA)
<S> <C> <C>
ASSETS
Fixed maturities -- at fair value (amortized cost:
$2,683,335 and $2,243,423)................................ $2,767,770 $2,335,795
Equity securities -- at fair value (cost: $25,896 and
$25,171, respectively).................................... 27,263 26,775
Assets held by ceding company under reinsurance treaty -- at
fair value (amortized cost: $101,382 and $101,767),....... 108,431 109,266
Mortgage loans and real estate.............................. 11,911 12,007
Short-term investments...................................... 247,011 166,801
Policy loans................................................ 133,883 133,986
Total investments................................. 3,296,269 2,784,630
Cash........................................................ 7,944 16,797
Accrued investment income................................... 50,677 43,378
Policy revenues receivable.................................. 172,435 158,560
Amounts receivable on reinsurance ceded..................... 362,105 347,828
Deferred acquisition costs.................................. 365,617 325,570
Other assets................................................ 20,621 23,479
Total assets...................................... $4,275,668 $3,700,242
LIABILITIES
Policy benefits............................................. $3,091,485 $2,871,243
Acquisition costs payable................................... 52,031 54,247
Amounts due on reinsurance ceded............................ 64,361 55,085
Other liabilities........................................... 103,079 120,877
Loans payable............................................... 125,000 125,000
Total liabilities................................. 3,435,956 3,226,452
Corporation-obligated, mandatorily redeemable capital
securities of subsidiary trusts........................... 236,620 100,000
COMMON SHAREHOLDERS' EQUITY
Common stock (par value $.001 per share; authorized
40,000,000 shares; issued 19,495,185 and 15,835,785
shares, respectively)..................................... 19 16
Paid in capital............................................. 333,927 111,337
Net unrealized appreciation of securities................... 56,550 61,416
Retained earnings........................................... 261,564 249,297
Treasury stock -- at cost (2,215,906 and 2,205,223 shares,
respectively)............................................. (48,968) (48,276)
Total common shareholders' equity......................... 603,092 373,790
Total liabilities and shareholders' equity........ $4,275,668 $3,700,242
</TABLE>
The accompanying notes are an integral component of the condensed
consolidated financial statements.
3
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LIFE RE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
----------------------
1998 1997
--------- ---------
(IN THOUSANDS,
EXCEPT PER SHARE DATA
<S> <C> <C>
REVENUES
Policy revenues............................................. $141,319 $114,713
Investment income........................................... 47,810 34,909
Realized investment gains................................... 593 737
Total revenues.................................... 189,722 150,359
BENEFITS AND EXPENSES
Policy benefits............................................. 95,775 82,190
Acquisition costs........................................... 41,201 31,916
Interest credited to policyholder accounts.................. 14,443 10,214
Interest expense............................................ 1,981 1,988
Distributions on capital securities......................... 2,499
Other operating expenses.................................... 11,806 8,593
Total benefits and expenses....................... 167,705 134,901
Income before federal income taxes.......................... 22,017 15,458
Provision for federal income taxes.......................... 7,706 5,410
NET INCOME.................................................. $ 14,311 $ 10,048
Earnings per common share................................... $ 1.01 $ 0.74
Earnings per common share assuming dilution................. $ 0.95 $ 0.71
Dividends per share......................................... $ 0.15 $ 0.13
</TABLE>
The accompanying notes are an integral component of the condensed consolidated
financial statements
4
<PAGE> 6
LIFE RE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
---------------------
1998 1997
--------- --------
(IN THOUSANDS)
<S> <C> <C>
OPERATING ACTIVITIES
Income before federal income taxes.......................... $ 22,017 $ 15,458
Adjustments to reconcile income before federal income taxes
to net cash provided by operating activities:
Change in accrued investment income....................... (5,138) 284
Change in policy revenues receivable, net................. (9,587) 11,810
Change in policy benefits................................. 33,059 (24,631)
Change in reinsurance ceded balances...................... (3,055) 17,274
Interest credited to policyholder accounts................ 14,443 10,214
Fees and charges deducted from policyholder accounts...... (10,565) (8,806)
Deferral of acquisition costs............................. (17,309) (13,816)
Amortization of acquisition costs, net of interest
accretion.............................................. 7,135 5,668
Net realized gains on investments......................... (593) (737)
Depreciation and amortization............................. 1,313 892
Other..................................................... (10,537) (6,489)
Net cash provided by operations................... 21,183 7,121
Federal income taxes recovered (paid)..................... (18,650) 3,991
Net cash provided by operating activities......... 2,533 11,112
INVESTING ACTIVITIES
Purchases of fixed maturities............................... (579,225) (85,176)
Sales of fixed maturities................................... 295,401 23,776
Maturities of fixed maturities.............................. 33,411 52,109
Sales or redemptions of equity securities................... 2,002
Change in short-term investments, policy loans and other
investments............................................... (44,816) 13,845
Cash paid in connection with acquisitions and reinsurance
transactions, net......................................... (52,894)
Other, net.................................................. (1,169) (1,007)
Net cash provided (used) by investing
activities...................................... (347,290) 3,547
FINANCING ACTIVITIES
Purchases of common stock for treasury...................... (692) (210)
Proceeds from exercises of common stock options............. 3,572 630
Issuance of common stock, net of issuance costs............. 219,120
Issuance of corporation-obligated, mandatorily redeemable
capital securities of subsidiary trust.................... 133,177
Dividends on common stock................................... (2,044) (1,763)
Deposits to policyholder accounts........................... 24,553 13,880
Withdrawals from policyholder accounts...................... (41,782) (21,812)
Net cash provided (used) by financing activities....... 335,904 (9,275)
Increase (decrease) in cash................................. (8,853) 5,384
Cash, beginning of period................................... 16,797 6,337
Cash, end of period......................................... $ 7,944 $ 11,721
</TABLE>
The accompanying notes are an integral component of the condensed
consolidated financial statements.
5
<PAGE> 7
LIFE RE CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1998
(UNAUDITED)
1. BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements of
Life Re Corporation and Subsidiaries (the "Company") have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-Q and Article 10 of Regulation
S-X. Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete financial
statements. In the opinion of management, all adjustments, consisting solely of
normal recurring accruals considered necessary for a fair presentation of
financial results, have been included. Operating results for the three month
period ended March 31, 1998 are not necessarily indicative of the results that
may be expected for the year ending December 31, 1998. For further information,
refer to the consolidated financial statements and notes thereto included in the
Company's Annual Report on Form 10-K for the year ended December 31, 1997.
Certain reclassifications have been made to the prior year financial
statements to conform to the current year presentation.
All dollar amounts are reported in thousands except per share data or
unless otherwise specified.
Earnings per common share is computed using the weighted average number of
common shares outstanding during the periods presented. Earnings per common
share assuming dilution reflects the dilution that could occur if options to
purchase common stock granted under the Company's stock option plans were
exercised. The following table presents the effect of dilutive common stock
options.
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
------------------
1998 1997
------- -------
<S> <C> <C>
Weighted average common shares outstanding.................. 14,236 13,551
Net effect of stock options assumed to be exercised......... 819 557
------ ------
Total common shares assuming dilution............. 15,055 14,108
====== ======
</TABLE>
As of January 1, 1998, the Company adopted Statement of Financial
Accounting Standards No. 130, "Reporting Comprehensive Income" ("SFAS 130")
which establishes new rules for the reporting and display of comprehensive
income and its components, consisting of net income and other comprehensive
income. The accumulated balance of other comprehensive income is required to be
reported separately in common shareholders' equity. The Company's only component
of other comprehensive income is net unrealized gains or losses on available for
sale securities, as defined, which is reported separately in common
shareholders' equity. Therefore, the adoption of SFAS 130 had no impact on
common shareholders' equity. Comprehensive income, which will be reported in the
Statement of Changes in Common Shareholders' Equity on an annual basis, is as
follows:
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
-------------------
1998 1997
------- --------
<S> <C> <C>
Net income.............................................. $14,311 $ 10,048
Net unrealized losses on securities..................... (4,866) (26,478)
------- --------
Total comprehensive income.................... $ 9,445 $(16,430)
======= ========
</TABLE>
6
<PAGE> 8
LIFE RE CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
2. CAPITAL SECURITIES AND SHAREHOLDERS' EQUITY
On March 17, 1998, the Company completed two public offerings (together,
the "Offerings") in which it sold 3,500,000 shares of common stock and 2,070,000
6.0% Adjustable Conversion-rate Equity Security Units (the "Units") issued
through Life Re Capital Trust II, a subsidiary of Life Re Corporation. The Units
consist of a stock purchase contract and Quarterly Income Preferred Securities.
Net proceeds from the Offerings were $352,297 of which $207,000 was contributed
to the insurance subsidiaries.
3. ACQUISITIONS AND REINSURANCE TRANSACTION
Effective February 28, 1998, the Company acquired, for a purchase price of
$61,897, 100% of the common stock of Mission Life Insurance Company ("Mission
Life"). The principal business of Mission Life is life insurance policies
designed to meet final expenses. The fair value of assets acquired and
liabilities assumed in connection with this transaction were approximately
$270,000 and $208,000, respectively. The effect of this acquisition on results
of operations for the three months ended March 31, 1998 was not material.
Effective April 1, 1998, the Company acquired, for a purchase price of
approximately $46,000, 100% of the common stock of Lincoln Liberty Life
Insurance Company and First Delaware Life Insurance Company from First Lincoln
Holdings, Inc. Lincoln Liberty Life Insurance Company and First Delaware Life
Insurance Company had combined statutory assets and adjusted capital and surplus
at December 31, 1997 of approximately $220,000 and $23,000, respectively.
Also effective April 1, 1998, the Company recaptured certain business it
had retroceded to ERC Life Insurance Company. The portion recaptured amounted to
20% of the total block of business coinsured from Allianz Life Insurance Company
of North America effective December 31, 1997.
7
<PAGE> 9
ITEM 2
LIFE RE CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
With the exception of historical information, the matters contained in the
following analysis are "forward looking statements" within the meaning of
Section 27A of the Securities Act of 1933, as amended and Section 21E of the
Securities Exchange Act of 1934, as amended. Such statements may include, but
are not limited to, projections of earnings, revenues, income or loss, capital
expenditures, plans for future operations and financing needs or plans, as well
as assumptions relating to the foregoing. The words "expect", "project",
"estimate", "predict", "anticipate", "believes" and similar expressions are also
intended to identify forward-looking statements. Forward-looking statements are
inherently subject to risks and uncertainties, some of which cannot be predicted
or quantified. Future events and actual results, performance and achievements
could differ materially from those set forth in, contemplated by or underlying
the forward-looking statements. Such factors include, but are not limited to,
the uncertainties relating to general economic and business conditions which may
impact the reinsurance marketplace; changes in laws and government regulations
applicable to Life Re, the ability of Life Re to implement its operating
strategies successfully, the ability of Life Re to execute Administrative
Reinsurance(sm) transactions and the amount, timing and returns therefrom;
material fluctuations in interest rate levels; material changes in mortality and
morbidity experience; material changes in persistency; material changes in the
level of operating expenses; and the success or failure of certain of Life Re's
clients in premium writing, and other risks and uncertainties. Should one or
more of these risks or uncertainties materialize, or should underlying
assumptions prove incorrect, actual outcomes may vary materially from those
indicated.
RESULTS OF OPERATIONS
During 1997 and in the first quarter of 1998, Life Re completed several
transactions through which it acquired blocks of insurance in force
(collectively, the "Transactions"). Transactions completed in 1997
(collectively, the "1997 Transactions") increased total assets by approximately
$930 million. The transaction completed in 1998 (the "1998 Transaction")
increased total assets by approximately $210 million.
Net income was $14.3 million for the three months ended March 31, 1998 and
$10.0 million for the same period last year. The increase is due to higher
premium volumes and lower relative mortality in traditional life reinsurance and
the contribution to Administrative Reinsurance from the Transactions.
Policy revenues by major source for the periods ended March 31, 1998 and
1997 are as follows:
<TABLE>
<CAPTION>
1998 1997
------ ------
(IN MILLIONS)
<S> <C> <C>
Traditional life reinsurance............................... $ 91.2 $ 71.9
Administrative Reinsurance................................. 32.1 9.1
Group accident and health and special risk reinsurance..... 18.0 33.7
------ ------
$141.3 $114.7
====== ======
</TABLE>
Policy revenues increased by $26.6 million, or 23%, to $141.3 million in
1998 from $114.7 million in last year's first quarter. Traditional life
reinsurance policy revenues increased by $19.3 million, or 27%, to $91.2 million
due to an increase in first year premiums of $5.0 million and higher renewal
premiums resulting from higher in force amounts. The $23.0 million increase in
Administrative Reinsurance policy revenues primarily is attributable to the
Transactions. Future revenue growth from Administrative Reinsurance is dependent
upon the completion of similar transactions. Group accident and health and
special risk policy revenues decreased $15.7 million, or 46%, to $18.0 million.
This decrease is due to Life Re's withdrawal from the group accident and health
and special risk marketplace during 1997 and an agreement, effective January 1,
1997, to retrocede 50% of 1997 group accident and health and special risk
reinsurance risks.
8
<PAGE> 10
Investment income increased by 37% to $47.8 million as a result of assets
received in conjunction with the Transactions, partially offset by a decline in
the weighted average portfolio yield rate as of March 31, 1998 and 1997,
respectively.
Policy benefits increased by $13.6 million period to period due to higher
volumes of business in force, but, as a percentage of policy revenues, improved
to 68% in 1998 from 72% in 1997. The decrease largely was due to shift in the
mix of business within traditional life reinsurance from excess to first dollar
quota share reinsurance. Under first dollar quota share reinsurance, typically a
higher portion of the reinsurance premium funds acquisition costs and a lesser
portion funds mortality costs. In addition, there is higher proportion of
Administrative Reinsurance business, which generally possesses lower benefit
ratios due to a significant portion of policy benefit costs on interest
sensitive products being classified as interest credited.
Policy acquisition costs as a percentage of policy revenues were 29% for
the 1998 quarter compared to 28% for the prior year quarter largely due to a
shift in the mix of business within traditional life reinsurance from excess to
first dollar quota share reinsurance. Under first dollar quota share
reinsurance, typically a higher portion of the reinsurance premium funds
acquisition costs and a lesser portion funds mortality costs.
Interest credited to policyholder accounts increased to $14.4 million in
1998 from $10.2 million in 1997 corresponding to the growth in interest
sensitive business resulting from the 1997 Transactions.
Interest expense on loans payable was level at $2.0 million for 1998 and
1997, as rates were generally unchanged.
Distributions on capital securities of $2.5 million were incurred from the
issuance in June 1997 of $100.0 million of 8.72% capital securities, and to a
lesser extent, the issuance in March 1998 of 2,070,000 6% Adjustable
Conversion-rate Equity Security Units. Each issuance was made by subsidiary
trusts of Life Re.
Other operating expenses increased by $3.2 million to $11.8 million due to
administrative fees for third party administrators incurred within
Administrative Reinsurance due to the 1997 Transactions and higher compensation
costs.
Federal income taxes were provided at the federal statutory rate of 35% for
1998 and 1997.
FINANCIAL CONDITION AND LIQUIDITY
Investments
Invested assets totaled $3,296.3 million at March 31, 1998 compared to
$2,784.6 million at December 31, 1997 largely due to assets acquired from the
1997 Transactions and proceeds from the issuance of common stock and capital
securities.
Life Re's fixed maturity portfolio (including the fixed maturity securities
which are included in assets held by ceding company under reinsurance treaty)
constituted 87% of invested assets at March 31, 1998, of which $74.6 million, or
2% of invested assets, consisted of below investment grade securities. At March
31, 1998, the weighted average quality rating of the fixed maturities portfolio
was A2/A and no fixed maturities were in default.
Liquidity
Sources of liquidity are available to Life Re in the form of cash and
short-term investments and, if necessary, the sale of invested assets. Life Re
may enter into reverse repurchase agreements to fund short-term cash needs and
can also borrow an additional $35.0 million under its revolving credit
agreement. In addition to debt servicing and capital securities distribution
obligations, as well as dividends to common shareholders, Life Re's financial
obligations consist of policy benefit and acquisition costs, taxes and general
operating expenses. Management believes that these obligations will be
adequately provided for by policy revenues and investment income for the next
twelve months.
In order to provide additional liquidity and capital needed to support its
core businesses, Life Re raised capital in the quarter ended March 31, 1998 (see
Note 2 of "Notes to Condensed Consolidated Financial
9
<PAGE> 11
Statements") through two separate public offerings in which it sold 3,500,000
shares of common stock, and 2,070,000 6% Adjustable Conversion-rate Equity
Security Units issued through Life Re Capital Trust II.
The ability of Life Re to make principal and interest payments under its
credit agreement and distributions on capital securities, as well as to continue
to pay common stock dividends, ultimately is dependent on the statutory earnings
and surplus of the insurance subsidiaries. The transfer of funds from the
subsidiaries to Life Re Corporation is subject to applicable insurance laws and
regulations.
10
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PART II -- OTHER INFORMATION
ITEM 6
EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
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<C> <C> <S>
3.01 -- Restated Certificate of Incorporation of Life Re Corporation
(the "Company"), dated November 13, 1997, incorporated by
reference to Exhibit 3.01 of the Company's Form 10-Q for the
quarterly period ended September 30, 1997, as filed with the
Securities and Exchange Commission ("SEC") on November 13,
1997.
3.02 -- By-Laws of the Company, dated August 5, 1992, incorporated
by reference to Exhibit 3.02 of the Company's Form 10-Q for
the quarterly period ended September 30, 1997, as filed with
the SEC on November 13, 1997.
4.01 -- Specimen Common Stock Certificate of the Company,
incorporated by reference to Exhibit 4.1 of the Company's
Registration Statement on Form S-1 (File No. 33-50556).
4.02 -- Certificate of Trust of Life Re Capital Trust II ("Trust
II"), incorporated by reference to Exhibit 4.3 of the
Company's Registration Statement on Form S-3 (File No.
333-46213).
4.03 -- Declaration of Trust of Trust II, incorporated by reference
to Exhibit 4.4 of the Company's Registration Statement on
Form S-3 (File No. 333-46213).
4.04 -- Form of Amended and Restated Declaration of Trust of Trust
II, incorporated by reference to Exhibit 4.5 of the
Company's Registration Statement on Form S-3 (File No.
333-46213).
4.05 -- Form of Quarterly Income Preferred Security ("QUIPS") of
Trust II, incorporated by reference to Exhibit 4.6 of the
Company's Registration Statement on Form S-3 (File No.
333-46213).
4.06 -- Form of Junior Subordinated Debenture, incorporated by
reference to Exhibit 4.8 of the Company's Registration
Statement on Form S-3 (File No. 333-46213).
4.07 -- Form of Indenture between the Company and The Bank of New
York, as Trustee, pursuant to which the Junior Subordinated
Debentures are to be issued, incorporated by reference to
Exhibit 4.7 of the Company's Registration Statement on Form
S-3 (File No. 333-46213).
4.08 -- Form of Guarantee Agreement with respect to the QUIPS,
incorporated by reference to Exhibit 4.9 of the Company's
Registration Statement on Form S-3 (File No. 333-46213).
4.09 -- Form of Master Unit Agreement, incorporated by reference to
Exhibit 4.11 of the Company's Registration Statement on Form
S-3 (File No. 333-46213).
4.10 -- Form of Adjustable Conversion-rate Equity Security Units,
incorporated by reference to Exhibit 4.12 of the Company's
Registration Statement on Form S-3 (File No. 333-46213).
4.11 -- Form of Pledge Agreement, incorporated by reference to
Exhibit 4.13 of the Company's Registration Statement on Form
S-3 (File No. 333-46213).
4.12 -- Form of Call Option Agreement, incorporated by reference to
Exhibit 4.14 of the Company's Registration Statement on Form
S-3 (File No. 333-46213).
4.13 -- Company's Agreement to File Indenture, incorporated by
reference to Exhibit 4.02 of the Company's Form 10-Q for the
quarterly period ended June 30, 1997, as filed with the SEC
on August 13, 1997.
15.01 -- Acknowledgment Letter of Ernst & Young LLP.
27.01 -- Financial Data Schedule.
</TABLE>
11
<PAGE> 13
(b) A Current Report on Form 8-K was filed with the Securities and Exchange
Commission on February 13, 1998 regarding the Company's 1997 financial results.
No other Current Reports on Form 8-K were filed with the Securities and Exchange
Commission during the quarter ended March 31, 1998.
12
<PAGE> 14
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.
Life Re Corporation
By: /s/ CHRIS C. STROUP
------------------------------------
Chris C. Stroup,
Executive Vice President
and Chief Financial Officer
Dated: May 13, 1998
13
<PAGE> 1
EXHIBIT 15.01
ACKNOWLEDGMENT LETTER
The Board of Directors
Life Re Corporation
We are aware of the incorporation by reference in the Registration Statement
(Form S-8 Number 33-54138) pertaining to The Life Re Corporation Stock
Investment Plan, the Registration Statement (Form S-8 No. 33-80251) pertaining
to the Life Re Corporation Stock Option Plan, the Registration Statement (Form
S-8 No. 33-80737) pertaining to the Life Re Corporation 1993 Non-Employee
Directors Stock Option Plan and in the Registration Statement (Form S-3 No.
333-35031) pertaining to the registration of shares of common stock in
connection with certain employees' restricted stock grant of our report dated
April 30, 1998 relating to the unaudited condensed consolidated interim
financial statements of Life Re Corporation that are included in its Form 10-Q
for the quarter ended March 31, 1998.
/s/ ERNST & YOUNG LLP
Stamford, Connecticut
May 11, 1998
<TABLE> <S> <C>
<ARTICLE> 7
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<EXCHANGE-RATE> 1
<DEBT-HELD-FOR-SALE> 2,767,770
<DEBT-CARRYING-VALUE> 0
<DEBT-MARKET-VALUE> 0
<EQUITIES> 27,263
<MORTGAGE> 10,744
<REAL-ESTATE> 1,167
<TOTAL-INVEST> 3,296,269
<CASH> 7,944
<RECOVER-REINSURE> 362,105
<DEFERRED-ACQUISITION> 365,617
<TOTAL-ASSETS> 4,275,668
<POLICY-LOSSES> 3,091,485
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0
0
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141,319
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</TABLE>
