FORM 10-Q
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
The registrant meets the conditions set forth in General Instruction H(1)(a) and
(b) of Form 10-Q and is therefore filing this Form with the reduced disclosure
format.
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended: September 30, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission file number: 333-59765
333-59769
333-82427
LINCOLN BENEFIT LIFE COMPANY
(Exact name of registrant as specified in its charter)
Nebraska 470221457
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2940 South 84th Street
Lincoln, Nebraska 68506-4142
(Address of principal executive offices)(zip code)
1-800-525-9287
(Registrant's telephone number, including area code)
Not Applicable
(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.
Yes. . ./X/. . No
Indicate the number of shares of each of the issuer's classes of common
stock as of September 30, 2000; there were 25,000 shares of common capital stock
outstanding, par value $100 per share all of which shares are held by Allstate
Life Insurance Company.
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
Statements of Operations
Three Months Ended September 30, 2000 and
September 30, 1999 (Unaudited)................................... 3
Statements of Financial Position
September 30, 2000(Unaudited) and December 31, 1999.............. 4
Statements of Cash Flows
Three Months Ended September 30, 2000 and
September 30, 1999 (Unaudited).............................. 5
Notes to Financial Statements.. .................................. 6
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS.......................10
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE
ABOUT MARKET RISK*.................................................N/A
PART II - OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS................................................. 14
Item 2. CHANGES IN SECURITIES AND USE OF PROCEEDS*........................N/A
Item 3. DEFAULTS UPON SENIOR SECURITIES*..................................N/A
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS*..........................................................N/A
Item 5. OTHER INFORMATION................................................. 14
Item 6. EXHIBITS AND REPORTS ON FORM 8-K.................................. 14
SIGNATURE PAGE.............................................................. 15
*Omitted pursuant to General Instruction H(2) of Form 10-Q.
2
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
LINCOLN BENEFIT LIFE INSURANCE COMPANY
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------------------- ---------------------------------
-------------------------------- ---------------------------------
<S> <C> <C> <C> <C>
($ in thousands) 2000 1999 2000 1999
--------------- --------------- --------------- ----------------
-------------------------------- ---------------------------------
(Unaudited) (Unaudited)
Net investment income $ 2,932 $ 2,772 $ 8,887 $ 8,158
Realized capital gains and losses - (357) - (766)
Other expense (1) (1,305) (20) (1,478)
------- ------- ------- -------
Income from operations before
income tax expense 2,931 1,110 8,867 5,914
Income tax expense 1,025 389 3,102 2,070
------ ---- ------ ------
Net income $ 1,906 $ 721 $ 5,765 $ 3,844
======== ======== ======== =======
</TABLE>
See notes to financial statements.
3
<PAGE>
LINCOLN BENEFIT LIFE INSURANCE COMPANY
STATEMENTS OF FINANCIAL POSITION
<TABLE>
<CAPTION>
September 30, December 31,
2000 1999
------------------- -------------------
------------------- -------------------
<S> <C> <C>
($ in thousands, except par value data) (Unaudited)
Assets
Investments
Fixed income securities, at fair value
(amortized cost $158,853 and $158,747) $ 159,439 $ 157,218
Short-term 10,543 1,919
------ -----
Total investments 169,982 159,137
Cash 92 982
Reinsurance recoverable from
Allstate Life Insurance Company, net 8,289,920 7,539,995
Reinsurance recoverable from non-affiliates, net 315,426 260,324
Receivable from affiliates, net 3,213 -
Other assets 2,500 4,447
Separate Accounts 1,763,749 1,411,996
---------- ----------
Total assets $ 10,544,882 $ 9,376,881
============= ===========
Liabilities
Reserve for life-contingent contract benefits $ 501,349 $ 419,117
Contractholder funds 8,092,540 7,369,664
Current income taxes payable 5,134 3,404
Deferred income taxes 2,858 745
Payable to affiliates, net - 12,650
Other liabilities and accrued expenses 14,335 1,528
Separate Accounts 1,763,749 1,411,996
---------- ----------
Total liabilities 10,379,965 9,219,104
----------- ----------
Commitments and Contingent Liabilities (Note 4)
Shareholder's Equity
Common stock, $100 par value, 30 thousand shares
authorized, 25 thousand issued and outstanding 2,500 2,500
Additional capital paid-in 116,750 116,750
Retained income 45,286 39,521
Accumulated other comprehensive income:
Unrealized net capital losses 381 (994)
----- -----
Total accumulated other comprehensive income 381 (994)
----- -----
Total shareholder's equity 164,917 157,777
-------- -------
Total liabilities and shareholder's equity $ 10,544,882 $ 9,376,881
============= ===========
</TABLE>
See notes to financial statements.
4
<PAGE>
LINCOLN BENEFIT LIFE INSURANCE COMPANY
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
----------------------------------------
----------------------------------------
($ in thousands) 2000 1999
----------------- -----------------
----------------------------------------
(Unaudited)
Cash flows from operating activities
<S> <C> <C>
Net income $ 5,765 $ 3,844
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation, amortization and other non-cash items (719) 1,136
Realized capital gains and losses - 766
Changes in:
Reserve for life-contingent contract benefits
and contractholder funds 81 (3,139)
Income taxes payable 1,730 (1,789)
Other operating assets and liabilities 264 2,211
------ -----
Net cash provided by operating activities 7,121 3,029
------ -----
Cash flows from investing activities
Fixed income securities
Proceeds from sales 13,900 11,183
Investment collections 6,155 12,559
Investment purchases (19,686) (17,955)
Change in short-term investments, net (8,380) (9,411)
------- --------
Net cash used in investing activities (8,011) (3,624)
------- -------
Net (decrease) increase in cash (890) (595)
Cash at the beginning of year 982 1,579
---- -----
Cash at end of year $ 92 $ 984
======== ======
</TABLE>
See notes to financial statements.
5
<PAGE>
LINCOLN BENEFIT LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
1. Basis of Presentation
The accompanying financial statements include the accounts of Lincoln
Benefit Life Company ("the Company"), a wholly owned subsidiary of Allstate Life
Insurance Company ("ALIC"), which is wholly owned by Allstate Insurance Company
("AIC"), a wholly owned subsidiary of The Allstate Corporation (the
"Corporation").
The financial statements and notes as of September 30, 2000, and for the
three month and nine month periods ended September 30, 2000 and 1999, are
unaudited. The financial statements reflect all adjustments (consisting only of
normal recurring accruals) which are, in the opinion of management, necessary
for the fair presentation of the financial position, results of operations and
cash flows for the interim periods. These financial statements and notes should
be read in conjunction with the financial statements and notes thereto included
in the Lincoln Benefit Life Company Annual Report on Form 10-K for 1999. The
results of operations for the interim periods should not be considered
indicative of results to be expected for the full year.
On January 25, 2000, the Company paid a dividend of all common shares of
AFD, Inc. ("AFDI") stock, a registered broker-dealer, to ALIC. Prior to the
dividend, AFDI had been consolidated in the Company's financial statements and
related disclosures. In conjunction with the dividend, the Company has restated
its prior year financial results to exclude AFDI.
2. Reinsurance
The Company has reinsurance agreements whereby certain premiums, contract
charges, credited interest, policy benefits and certain expenses are ceded to
ALIC and reflected net of such reinsurance in the statements of operations.
Reinsurance recoverable and the related reserve for life-contingent contract
benefits and contractholder funds are reported separately in the statements of
financial position. The Company continues to have primary liability as the
direct insurer for risks reinsured.
6
<PAGE>
LINCOLN BENEFIT LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
Investment income earned on the assets which support contractholder funds
and the reserve for life-contingent contract benefits is not included in the
Company's financial statements as those assets are owned and managed under terms
of the reinsurance agreements. The following table summarizes amounts which were
ceded to ALIC under reinsurance agreements.
<TABLE>
<CAPTION>
Three months ended Six months ended
September 30, September 30,
------------------------------ ----------------------------------
($ in thousands) 2000 1999 2000 1999
---------------- ------------- ---------------- -----------------
<S> <C> <C> <C> <C>
Premiums $ 23,397 $ 12,878 $ 59,154 $ 42,802
Contract charges 39,941 31,940 115,348 92,878
Credited interest, policy benefits
and certain expenses 167,426 138,133 479,139 488,072
</TABLE>
The Company also purchases reinsurance from non-affiliates. The following
table summarizes amounts which were ceded to third parties under reinsurance
agreements.
<TABLE>
<CAPTION>
Three months ended Six months ended
September 30, September 30,
------------------------------ ----------------------------------
($ in thousands) 2000 1999 2000 1999
---------------- ------------- ---------------- -----------------
<S> <C> <C> <C> <C>
Premiums $ 56,454 $ 71,315 $ 151,741 $ 146,940
Credited interest, policy benefits
and certain expenses 60,231 61,924 173,804 170,199
</TABLE>
7
<PAGE>
LINCOLN BENEFIT LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
3. Comprehensive Income
The components of other comprehensive income on a pretax and after-tax
basis are as follows:
<TABLE>
<CAPTION>
Three months ended September 30,
------------------------------------------------------------------------
($ in thousands) 2000 1999
---------------------------------- ----------------------------------
After- After-
Pretax Tax tax Pretax Tax tax
-----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Unrealized capital gains and losses:
Unrealized holding gains (losses)
arising during the period $2,051 $(718) $1,333 $ (1,105) $387 $(718)
Less: reclassification adjustments - - - (357) 125 (232)
--------- -------- -------- ------- ------- -------
Unrealized net capital gains (losses) 2,051 (718) 1,333 (748) 262 (486)
-------- -------- -------- ------- -------- -------
Other comprehensive income (loss) $2,051 $(718) 1,333 $ (748) $262 (486)
====== ==== ====== =====
Net income 1,906 721
------- -------
Comprehensive income (loss) $ 3,239 $ 235
======= ========
Nine months ended September 30,
------------------------------------------------------------------------
($ in thousands) 2000 1999
---------------------------------- ----------------------------------
After- After-
Pretax Tax tax Pretax Tax tax
------------------------------------------------------------------------
Unrealized capital gains and losses:
Unrealized holding gains (losses)
arising during the period $ 2,115 $(740) $ 1,375 $ (8,900) $3,115 $ (5,785)
Less: reclassification adjustments - - - (766) 268 (498)
--------- ------- ------- -------- ------- ---------
Unrealized net capital gains (losses) 2,115 (740) 1,375 (8,134) 2,847 (5,287)
-------- ------- ------ -------- ------- ---------
Other comprehensive income (loss) $ 2,115 $ (740) 1,375 $ (8,134) $2,847 (5,287)
======== ====== ======== ======
Net income 5,765 3,844
------- --------
Comprehensive income (loss) $ 7,140 $ (1,443)
======= ========
</TABLE>
8
<PAGE>
LINCOLN BENEFIT LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
4. Regulation and legal proceedings
The Company's business is subject to the effects of a changing social,
economic and regulatory environment. Recent public and regulatory initiatives
have varied and include employee benefit regulations, removal of barriers
preventing banks from engaging in the securities and insurance business, tax law
changes affecting the taxation of insurance companies, and the tax treatment of
insurance products and its impact on the relative desirability of various
personal investment vehicles. The ultimate changes and eventual effects, if any,
of these initiatives are uncertain.
In the normal course of its business, the Company is involved in pending or
threatened litigation and regulatory actions in which claims for monetary
damages are asserted. At this time, based on their present status, it is the
opinion of management, that the ultimate liability, if any, in one or more of
these actions in excess of amounts currently reserved is not expected to have a
material effect on the results of operations, liquidity or financial position of
the Company.
9
<PAGE>
ITEM 2. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS FOR THE THREE MONTH AND
NINE MONTH PERIODS ENDED SEPTEMBER 30, 2000 AND 1999
The following discussion highlights significant factors influencing results
of operations and changes in financial position of Lincoln Benefit Life Company
(the "Company"). It should be read in conjunction with the financial statements
and related notes thereto found under Part I. Item 1 contained herein and with
the discussion, analysis, financial statements and notes thereto in Part I. Item
1 and Part II. Items 7 and 8 of the Lincoln Benefit Life Company Annual Report
on Form 10-K for the year ended December 31, 1999.
The Company, a wholly owned subsidiary of Allstate Life Insurance Company
("ALIC"), which is a wholly owned subsidiary of Allstate Insurance Company
("AIC"), a wholly owned subsidiary of The Allstate Corporation ("Corporation"),
markets life insurance and savings products through independent insurance agents
and securities firms. Life insurance consists of traditional products, including
term and whole life, interest-sensitive life, immediate annuities with life
contingencies, variable life and indexed life insurance. Savings products
include deferred annuities and immediate annuities without life contingencies.
Deferred annuities include fixed rate, market value adjusted, indexed and
variable annuities.
The Company has identified itself as a single segment entity.
The assets and liabilities related to variable annuity and variable life
contracts are legally segregated and reflected as Separate Accounts. The assets
of the Separate Accounts are carried at fair value. Separate Accounts
liabilities represent the contractholders' claim to the related assets and are
carried at the fair value of the assets. In the event that the asset value of
certain contractholder accounts are projected to be below the value guaranteed
by the Company, a liability is established through a charge to earnings.
Investment income and realized capital gains and losses of the Separate Accounts
accrue directly to the contractholders and therefore, are not included in the
Company's statements of operations.
On January 25, 2000, the Company paid a dividend of all common shares of
AFD, Inc. ("AFDI") stock, a registered broker-dealer, to ALIC. Prior to the
dividend, AFDI had been consolidated in the Company's financial statements and
related disclosures. In conjunction with the dividend, the Company has restated
its prior year financial results to exclude AFDI.
Results of Operations
---------------------
<TABLE>
<CAPTION>
($ in thousands)
Three Months Ended Six Months Ended
September 30, September 30,
2000 1999 2000 1999
-------------- -------------- -------------- ----------------
<S> <C> <C> <C> <C>
Net investment income $ 2,932 $ 2,772 $ 8,887 $ 8,158
======= ======= ======= =======
Realized capital gains and losses, after tax $ - $ (232) $ - $ (498)
======= ======= ======= =======
Net income $ 1,906 $ 721 $ 5,765 $ 3,844
======= ======= ======= =======
</TABLE>
The Company has reinsurance agreements under which contract and policy
related transactions are transferred, primarily to ALIC. The Company also has
reinsurance agreements with third parties. The Company's results of operations
include primarily net investment income and realized capital gains and losses
earned on the assets of the Company that are not transferred under the
reinsurance agreements. Certain non-investment related expenses which are not
transferred under reinsurance agreements are presented in other expenses.
10
<PAGE>
ITEM 2. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS FOR THE THREE MONTH AND
NINE MONTH PERIODS ENDED SEPTEMBER 30, 2000 AND 1999
Net income for the third quarter and first nine months of 2000 increased
164.4% to $1.9 million and 50.0% to $5.8 million, respectively, over the same
periods in 1999, due primarily to a $1.2 million write-down of building
improvements in the third quarter of 1999 and increased net investment income
and the reduction in realized capital losses during both periods. Net investment
income for the three month and nine month periods ended September 30, 2000
increased 5.8% to $2.9 million and 8.9% to $8.9 million, respectively, primarily
attributable to higher investment balances. Period to period fluctuations in
realized capital gains are largely the result of timing of sales, reflecting
management's decision on positioning the portfolio, as well as assessments of
individual securities and overall market conditions.
Financial Position
------------------
<TABLE>
<CAPTION>
($ in thousands)
September 30, December 31,
2000 1999
------------ ------------
<S> <C> <C> <C>
Fixed income securities (1) $ 159,439 $ 157,218
Short-term investments 10,543 1,919
----------- -----------
Total investments $ 169,982 $ 159,137
=========== ===========
Reinsurance recoverable from ALIC, net $ 8,289,920 $ 7,539,995
=========== ===========
Separate Account assets and liabilities $ 1,763,749 $ 1,411,996
=========== ===========
Contractholder funds $ 8,092,540 $ 7,369,664
=========== ===========
</TABLE>
[FN]
(1) Fixed income securities are carried at fair value. Amortized cost for
these securities was $158,853 and $158,747 at September 30, 2000 and December
31, 1999, respectively.
</FN>
Total investments were $170.0 million at September 30, 2000 compared to
$159.1 million at December 31, 1999. The increase was due primarily to positive
cash flows generated from operations. Unrealized net capital gains on fixed
income securities were $586 thousand at September 30, 2000 compared to
unrealized net capital losses of $1.5 million at December 31, 1999. Investments
at September 30, 2000, excluding Separate Accounts and unrealized gains and
losses on fixed income securities, grew 5.4% from December 31, 1999.
At September 30, 2000, all of the Company's fixed income securities
portfolio was rated investment grade, which is defined by the Company as a
security having a National Association of Insurance Commissioners ("NAIC")
rating of 1 or 2, a Moody's rating of Aaa, Aa, A or Baa, or a comparable Company
internal rating.
During the nine months ended September 30, 2000, amounts recoverable from
ALIC under reinsurance agreements increased $749.9 million and contractholder
funds increased $722.9 million as compared to December 31, 1999 balances. The
increases resulted primarily from sales of market value adjusted annuity
contracts, partially offset by fixed annuity surrenders and withdrawals. As the
Company's interest-sensitive life policies and annuity contracts in-force grow
and age, the dollar amount of surrenders and withdrawals will likely increase.
While the overall amount of surrenders may increase in the future, a significant
increase in the level of surrenders relative to total contractholder account
balances is not anticipated. Reinsurance recoverable from ALIC relates to
contract benefit obligations ceded to ALIC.
Separate Accounts assets and liabilities increased 24.9% to $1.76 billion
at September 30, 2000 as compared to the December 31, 1999 balance. The
increases were primarily attributable to sales of variable annuity contracts,
partially offset by surrenders and withdrawals.
11
<PAGE>
ITEM 2. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS FOR THE THREE MONTH AND
NINE MONTH PERIODS ENDED SEPTEMBER 30, 2000 AND 1999
Liquidity and Capital Resources
Under the terms of reinsurance agreements, premiums and deposits, excluding
those relating to Separate Accounts, are transferred primarily to ALIC, which
maintains the investment portfolios supporting the Company's products. Payments
of policyholder claims, benefits, contract maturities, contract surrenders and
withdrawals and certain operating costs are also reimbursed primarily by ALIC,
under the terms of the reinsurance agreements. The Company continues to have
primary liability as a direct reinsurer for risks insured. The Company's ability
to meet liquidity demands is dependent on ALIC's ability to meet those demands.
ALIC's claims-paying ability was rated Aa2, AA+, and A+ by Moody's, Standard &
Poor's and A.M. Best, respectively, at September 30, 2000.
The primary sources for the remainder of the Company's funds are collection
of principal and interest from the investment portfolio and capital
contributions from ALIC. The primary uses for the remainder of the Company's
funds are to purchase investments and pay costs associated with the maintenance
of the Company's investment portfolio.
At September 30, 2000, the Moody's, Standard and Poor's and A.M. Best
claims-paying ratings for the Company were Aa2, AA+ and A+, respectively.
Forward-Looking Statements
This document contains "forward-looking statements" that anticipate results
based on management's plans that are subject to uncertainty. These statements
are made subject to the safe-harbor provisions of the Private Securities
Litigation Reform Act of 1995.
Forward-looking statements do not relate strictly to historical or current
facts and may be identified by their use of words like "plans," "expects,"
"will," "anticipates," "estimates," "intends," "believes," "likely" and other
words with similar meanings. These statements may address, among other things,
our strategy for growth, product development, regulatory approvals, market
position, expenses, financial results and reserves. Forward-looking statements
are based on management's current expectations of future events. We cannot
guarantee that any forward-looking statement will be accurate. However, we
believe that our forward-looking statements are based on reasonable, current
expectations and assumptions. We assume no obligation to update any
forward-looking statements as a result of new information or future events or
developments.
If the expectations or assumptions underlying our forward-looking
statements prove inaccurate or if risks or uncertainties arise, actual results
could differ materially from those communicated in our forward-looking
statements. In addition to the normal risks of business, the Company is subject
to significant risk factors, including those listed below which apply to it as
an insurance business.
o Changes in market interest rates can have adverse effects on the Company's
investment portfolio, investment income, product sales and results of
operations, generally. Increases in market interest rates have an adverse
impact on the value of the investment portfolio by decreasing unrealized
capital gains on fixed income securities. In addition, increases in market
interest rates as compared to rates offered on some of the Company's
products could make those products less attractive and lead to lower sales
and/or increase the level of surrenders on these products. Declining market
interest rates could have an adverse impact on the Company's investment
income as the Company reinvests proceeds from positive cash flows from
operations and from maturing and called investments into new investments
that could be yielding less than the portfolio's average rate. Additionally
the impact of decreasing Separate Account balances resulting from
fluctuating market conditions could cause contract charges realized by the
Company to decrease.
o In order to meet the anticipated cash flow requirements of the obligations
to policyholders, from time to time the effective duration of the assets
and liabilities of the investment portfolio is adjusted. Those adjustments
may have an impact on the value of the investment portfolio and on
investment income.
o State insurance regulatory authorities require insurance companies to
maintain specified levels of statutory capital and surplus. In addition,
competitive pressures require the Company to maintain financial strength or
claims-paying ability ratings. These restrictions affect the Company's
ability to use its capital.
12
<PAGE>
o The Company distributes some of its products under agreements with other
financial services entities. Termination of such agreements due to changes
in control of these non-affiliated entities could have a detrimental effect
on the Company's sales. This risk may be increased due to the enactment of
the Gramm-Leach-Bliley Act of 1999, which eliminates many federal and state
law barriers to affiliations among banks, securities firms, insurers and
other financial service providers.
o A number of enacted and pending legislative measures may lead to increased
consolidation and increased competition in the financial services industry.
At the federal level, these measures include the Gramm-Leach-Bliley Act of
1999, which eliminates many federal and state law barriers to affiliations
among banks, securities firms, insurers and other financial service
providers. At the state level, these measures include legislation to permit
mutual insurance companies to convert to a hybrid structure known as a
mutual holding company, thereby allowing insurance companies owned by their
policyholders to become stock insurance companies owned (through one or
more intermediate holding companies) at least 51% by their policyholders
and potentially up to 49% by stockholders. Also several large mutual life
insurers have used or are expected to use existing state laws and
regulations governing the conversion of mutual insurance companies into
stock insurance companies (demutualization). These measures may also
increase competition for capital among financial service providers.
o Deferred annuities and interest-sensitive life insurance products receive
favorable policyholder taxation under current tax laws and regulations. Any
legislative or regulatory changes that adversely alter this treatment are
likely to negatively affect the demand for these products.
o Financial strength ratings have become an increasingly important factor in
establishing the competitive position of insurance companies and may
generally be expected to have an effect on an insurance company's business.
On an ongoing basis, rating organizations review the financial performance
and condition of insurers. Downgrades in one or more of the ratings of the
Company could have a material adverse effect on the Company's business,
financial condition and results of operations.
13
<PAGE>
PART II - OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
The Company and its Board of Directors know of no material legal proceedings
pending to which the Company is a party or which would materially affect the
Company. The Company is involved in pending and threatened litigation in the
normal course of its business in which claims for monetary damages are asserted.
Management, after consultation with legal counsel, does not anticipate the
ultimate liability arising from such pending or threatened litigation to have a
material effect on the financial condition of the Company.
Item 5. OTHER INFORMATION
Not applicable.
Item 6. EXHIBITS AND REPORTS ON FORM 8-k
(a) Exhibits required by Item 601 of Regulation S-K
(2) None
(3) (i) Articles of Incorporation*
(ii) By-laws*
(4) Lincoln Benefit Life Company Flexible Premium Deferred
Annuity Contract and Application**
(10) Reinsurance Agreement between Lincoln Benefit Life Company
and Allstate Life Insurance Company*
(11) None
(15) None
(18) None
(19) None
(22) None
(23) (a) Consent of Independent Public Accountants***
(b) Consent of Attorneys***
(24) None
(27) Financial Data Schedule
(99) None
(b) Reports on 8-K
No reports on Form 8-K were filed during the second quarter of
1998.
*Incorporated herein by reference to the Registration Statement on Form N-4 for
Lincoln Benefit Life Variable Annuity Account (File No. 333-50545, 811-07924)
filed April 21, 1998.
**Incorporated herein by reference to the Registration Statement on Form N-4 for
Lincoln Benefit Life Variable Annuity Account (File No. 333-50545, 811-07924)
filed April 21, 1998. Incorporated herein by reference to the Registration
Statement on Form N-4 for Lincoln Benefit Life Variable Annuity Account (File
No. 333-50737, 811-07924) filed April 22, 1998. Incorporated by reference to the
Registration Statement on Form N-4 for Lincoln Benefit Life Variable Annuity
Account (File No. 333-82427, 811-07924) filed July 8, 1999.
***Incorporated herein by reference to the Post-effective Amendment #2 to
Registration Statement on Form S-3 for Lincoln Benefit life Company (File No.
333-59765) filed April 28, 2000. Incorporated herein by reference to the
Post-effective Amendment #2 to Registration Statement on Form S-3 for Lincoln
Benefit Life Company (File No. 333-59769) filed April 28, 2000. Incorporated
herein by reference to Post-effective Amendment No. 1 to the Registration
Statement on Form S-3 for Lincoln Benefit Life Company (File No. 333-88045)
filed April 5, 2000.
14
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registration has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized, on the 14th day of September, 2000.
LINCOLN BENEFIT LIFE COMPANY
(Registrant)
/s/ B. Eugene Wraith
----------------------- PRESIDENT, CHIEF OPERATING
B. EUGENE WRAITH OFFICER AND DIRECTOR
(PRINCIPAL EXECUTIVE OFFICER)
/S/ Samuel H. Pilch
----------------------- VICE PRESIDENT
SAMUEL H. PILCH CONTROLLER
(PRINCIPAL FINANCIAL OFFICER)
(PRINCIPAL ACCOUNTING OFFICER)
/S/ Robert L. Vance VICE PRESIDENT
----------------------- ASSISTANT TREASURER
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