<PAGE> PAGE 1
000 B000000 12/31/98
000 C000000 0000949282
000 D000000 N
000 E000000 NF
000 F000000 Y
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000 H000000 N
000 I000000 3.0.a
000 J000000 U
001 A000000 AJL PEPS TRUST
001 B000000 811-07341
001 C000000 2128155366
002 A000000 C/0 THE BANK OF NEW YORK 101 BARCLAY ST
002 B000000 NEW YORK
002 C000000 NY
002 D010000 10286
003 000000 N
004 000000 N
005 000000 N
006 000000 N
007 A000000 N
007 B000000 0
062 A000000 Y
062 B000000 5.4
062 C000000 0.0
062 D000000 0.0
062 E000000 0.0
062 F000000 0.0
062 G000000 0.0
062 H000000 0.0
062 I000000 0.0
062 J000000 0.0
062 K000000 0.0
062 L000000 0.0
062 M000000 0.0
062 N000000 0.0
062 O000000 0.0
062 P000000 0.0
062 Q000000 0.0
062 R000000 94.6
063 A000000 46
063 B000000 0.0
064 A000000 N
064 B000000 N
071 A000000 0
071 B000000 22556
071 C000000 122306
071 D000000 0
072 A000000 12
072 B000000 897
072 C000000 0
<PAGE> PAGE 2
072 D000000 0
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072 S000000 17
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072 V000000 0
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072 X000000 127
072 Y000000 124
072 Z000000 894
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072CC020000 43293
072DD010000 3000
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073 A010000 0.1916
073 A020000 0.0000
073 B000000 0.0000
073 C000000 1.2478
074 A000000 257
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074 C000000 5609
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074 E000000 0
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074 H000000 0
074 I000000 98181
074 J000000 0
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<PAGE> PAGE 3
074 R010000 0
074 R020000 0
074 R030000 0
074 R040000 253
074 S000000 0
074 T000000 103794
074 U010000 15663
074 U020000 0
074 V010000 6.63
074 V020000 0.00
074 W000000 0.0000
074 X000000 110
074 Y000000 0
075 A000000 0
075 B000000 122563
076 000000 6.63
077 A000000 Y
077 B000000 Y
077 C000000 N
077 D000000 N
077 E000000 N
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077 G000000 N
077 H000000 N
077 I000000 N
077 J000000 N
077 K000000 N
077 L000000 N
077 M000000 N
077 N000000 N
077 O000000 N
077 P000000 N
077 Q010000 N
077 Q020000 N
077 Q030000 Y
078 000000 N
080 A000000 NATIONAL UNION FIRE INSURANCE COMPANY
080 C000000 1000
081 A000000 N
081 B000000 0
082 A000000 Y
082 B000000 15
083 A000000 N
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084 A000000 N
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<PAGE> PAGE 4
086 B020000 0
086 C010000 0
086 C020000 0
086 D010000 0
086 D020000 0
086 E010000 0
086 E020000 0
086 F010000 0
086 F020000 0
087 A010000 $1.44 PREMIUM EXCHANGEABLE PARTICIPATING SHS
087 A020000 009710104
087 A030000 AJP
088 A000000 N
088 B000000 N
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088 D000000 N
SIGNATURE DONALD J. PUGLISI
TITLE MANAGING TRUSTEE
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains Summary Financial Information extracted from the audited
financial statements of the Trust for the fiscal year ended December 31, 1998
and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> DEC-31-1998
<INVESTMENTS-AT-COST> 229,560
<INVESTMENTS-AT-VALUE> 103,790
<RECEIVABLES> 0
<ASSETS-OTHER> 257
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 104,047
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 253
<TOTAL-LIABILITIES> 253
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 228,687
<SHARES-COMMON-STOCK> 15,663
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 876
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (125,770)
<NET-ASSETS> 103,794
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 897
<OTHER-INCOME> 0
<EXPENSES-NET> 3
<NET-INVESTMENT-INCOME> 894
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> (43,293)
<NET-CHANGE-FROM-OPS> (42,399)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (3,000)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> (19,554)
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (64,954)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 127
<AVERAGE-NET-ASSETS> 122,563
<PER-SHARE-NAV-BEGIN> 10.77
<PER-SHARE-NII> 0.06
<PER-SHARE-GAIN-APPREC> (2.76)
<PER-SHARE-DIVIDEND> (0.19)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> (1.25)
<PER-SHARE-NAV-END> 6.63
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
DELOITTE &
TOUCHE
------------------------------------------------------
Deloitte & Touche LLP Telephone: (312) 946-3000
Two Prudential Plaza Facsimile: (312) 946-2600
180 North Stetson Avenue
Chicago, Illinois 60601-6778
INDEPENDENT AUDITORS' REPORT
To the Trustees and Shareholders of AJL PEPS Trust:
In planning and performing our audit of the financial statements of AJL PEPS
Trust (the "Trust") for the year ended December 31, 1998 (on which we have
issued our report dated February 19, 1999), we considered its internal control,
including control activities for safeguarding securities, in order to determine
our auditing procedures for the purpose of expressing our opinion on the
financial statements and to comply with the requirements of Form N-SAR, and not
to provide assurance on the Trust's internal control.
The management of the Trust is responsible for establishing and maintaining
internal control. In fulfilling this responsibility, estimates and judgments by
management are required to assess the expected benefits and related costs of
controls. Generally, controls that are relevant to an audit pertain to the
entity's objective of preparing financial statements for external purposes that
are fairly presented in conformity with generally accepted accounting
principles. Those controls include the safeguarding of assets against
unauthorized acquisition, use, or disposition.
Because of inherent limitations in any internal control, misstatements due to
error or fraud may occur and not be detected. Also, projection of any evaluation
of internal control to future periods is subject to the risk that it may become
inadequate because of changes in conditions, or that the degree of compliance
with policies or procedures may deteriorate.
Our consideration of the Trust's internal control would not necessarily disclose
all matters in the internal control that might be material weaknesses under
standards established by the American Institute of Certified Public Accountants.
A material weakness is a condition in which the design or operation of one or
more of the internal control components does not reduce to a relatively low
level the risk that misstatements caused by errors or fraud in amounts that
would be material in relation to the financial statements being audited may
occur and not be detected within a timely period by employees in the normal
course of performing their assigned functions. However, we noted no matters
involving the Trust's internal control and its operation, including controls for
safeguarding securities, that we consider to be material weaknesses as defined
above as of December 31, 1998.
This report is intended solely for the information and use of management, the
Board of Directors of AJL PEPS Trust, and the Securities and Exchange
Commission, and is not intended to be and should not be used by anyone other
than these specified parties.
/s/ Deloitte & Touche LLP
February 19, 1999
- ---------------
Deloitte Touche
Tohmatsu
- ---------------
