-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, OS2qHZHxmh6lCcNyfHSVRAs0GtLj5EGxyYpn/5LitWEQGa5SRtR43mW1tyTLAwTN +vEAyEJr5Dzwg/LTSA7tgg== 0000355429-95-000031.txt : 19951119 0000355429-95-000031.hdr.sgml : 19951119 ACCESSION NUMBER: 0000355429-95-000031 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951113 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: PROTECTIVE LIFE INSURANCE CO CENTRAL INDEX KEY: 0000310826 STANDARD INDUSTRIAL CLASSIFICATION: LIFE INSURANCE [6311] IRS NUMBER: 630169720 STATE OF INCORPORATION: AL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 033-31940 FILM NUMBER: 95590637 BUSINESS ADDRESS: STREET 1: 2801 HIGHWAY 280 SOUTH CITY: BIRMINGHAM STATE: AL ZIP: 35223 BUSINESS PHONE: 2058799230 MAIL ADDRESS: STREET 1: PO BOX 2606 CITY: BIRMINGHAM STATE: AL ZIP: 35202 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended SEPTEMBER 30, 1995 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to ---- ---- Commission File Numbers 33-31940; 33-39345; 33-57052; 33-70984 PROTECTIVE LIFE INSURANCE COMPANY (Exact name of registrant as specified in its charter) TENNESSEE 63-0169720 (State of incorporation) (IRS Employer Identification Number) 2801 HIGHWAY 280 SOUTH BIRMINGHAM, ALABAMA 35223 (Address of principal executive offices) (205) 879-9230 (Registrant's telephone number) 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 -- -- Number of shares of Common Stock, $1.00 par value, outstanding as of November 10, 1995: 5,000,000 shares. 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 PURSUANT TO GENERAL INSTRUCTION H(2). PROTECTIVE LIFE INSURANCE COMPANY INDEX PART I. FINANCIAL INFORMATION: Item 1. Financial Statements: Report of Independent Accountants Consolidated Condensed Statements of Income for the Three Months and Nine Months ended September 30, 1995 and 1994 (unaudited) Consolidated Condensed Balance Sheets as of September 30, 1995 (unaudited) and December 31, 1994 Consolidated Condensed Statements of Cash Flows for the Nine Months ended September 30, 1995 and 1994 (unaudited) Notes to Consolidated Condensed Financial Statements (unaudited) Item 2. Management's Narrative Analysis of the Results of Operations PART II. OTHER INFORMATION: Item 6. Exhibits and Reports on Form 8-K Signature REPORT OF INDEPENDENT ACCOUNTANTS To the Directors and Stockholder Protective Life Insurance Company Birmingham, Alabama We have reviewed the accompanying consolidated condensed balance sheet of Protective Life Insurance Company and subsidiaries as of September 30, 1995, and the related consolidated condensed statements of income for the three-month and nine-month periods ended September 30, 1995 and 1994 and consolidated condensed statements of cash flows for the nine-month periods ended September 30, 1995 and 1994. These financial statements are the responsibility of the Company's management. We conducted our review 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, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to the consolidated condensed 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 sheet as of December 31, 1994, and the related consolidated statements of income, stockholder's equity, and cash flows for the year then ended (not presented herein); and in our report dated February 13, 1995, we expressed an unqualified opinion which contains an explanatory paragraph regarding the changes in accounting for certain investments in debt and equity securities in 1993 and postretirement benefits other than pensions in 1992 on those consolidated financial statements. In our opinion, the infor- mation set forth in the accompanying consolidated condensed balance sheet as of December 31, 1994, is fairly stated in all material respects in relation to the consolidated balance sheet from which it has been derived. COOPERS & LYBRAND L.L.P. Birmingham, Alabama October 25, 1995 PROTECTIVE LIFE INSURANCE COMPANY CONSOLIDATED CONDENSED STATEMENTS OF INCOME (Dollars in thousands) (Unaudited)
THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30 SEPTEMBER 30 1995 1994 1995 1994 REVENUES Premiums and policy fees (net of reinsurance ceded: three months: 1995 - $79,908; 1994 - $50,714 $ 93,213 $101,876 $277,460 $289,362 nine months: 1995 - $222,351; 1994 - $121,462) Net investment income 118,162 101,283 342,017 295,978 Realized investment gains (losses) 1,337 3,122 3,443 4,855 Other income 799 643 4,992 2,871 -------- -------- -------- -------- 213,511 206,924 627,912 593,066 -------- -------- -------- -------- BENEFITS AND EXPENSES Benefits and settlement expenses (net of reinsurance ceded: three months: 1995 - $54,638; 1994 - $31,118 134,111 134,208 383,039 376,536 nine months: 1995 - $159,760; 1994 - $80,541) Amortization of deferred policy acquisition costs 17,643 20,485 63,193 60,194 Other operating expenses (net of reinsurance ceded: three months: 1995 - $23,173; 1994 - $3,793 30,040 24,859 93,297 81,457 -------- -------- -------- -------- nine months: 1995 - $58,645; 1994 - $9,842) 181,794 179,552 539,529 518,187 -------- -------- -------- -------- INCOME BEFORE INCOME TAX 31,717 27,372 88,383 74,879 Income tax expense 11,352 8,728 30,052 23,960 -------- -------- -------- -------- NET INCOME $ 20,365 $ 18,644 $ 58,331 $ 50,919 ======== ======== ======== ======== SEE NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
PROTECTIVE LIFE INSURANCE COMPANY CONSOLIDATED CONDENSED BALANCE SHEETS (DOLLARS IN THOUSANDS)
SEPTEMBER 30 DECEMBER 31 1995 1994 (Unaudited) ASSETS Investments: Fixed maturities $3,909,874 $3,493,646 Equity securities 47,456 45,005 Mortgage loans on real estate 1,718,900 1,488,495 Investment in real estate, net 21,040 20,170 Policy loans 145,655 147,608 Other long-term investments 46,193 50,751 Short-term investments 90,974 54,683 ---------- ---------- Total investments 5,980,092 5,300,358 Cash 808 Accrued investment income 61,701 55,630 Accounts and premiums receivable, net 38,333 28,928 Reinsurance receivables 223,457 122,175 Deferred policy acquisition costs 412,283 434,200 Property and equipment, net 34,699 33,185 Receivables from related parties 582 281 Other assets 13,790 11,802 Assets held in separate accounts 277,493 124,145 ---------- ---------- TOTAL ASSETS $7,043,238 $6,110,704 ========== ========== LIABILITIES Policy liabilities and accruals $2,021,324 $1,797,774 Guaranteed investment contract deposits 2,483,669 2,281,673 Annuity deposits 1,298,167 1,251,318 Other policyholders' funds 144,468 144,461 Other liabilities 102,584 94,181 Accrued income taxes 5,973 (4,699) Deferred income taxes 49,471 (14,667) Indebtedness to related parties 39,443 39,443 Debt 17,000 Liabilities related to separate accounts 277,493 124,145 ---------- ---------- TOTAL LIABILITIES 6,439,592 5,713,629 ========== ========== COMMITMENTS AND CONTINGENT LIABILITIES - NOTE B REDEEMABLE PREFERRED STOCK, $1 par value, at redemption value; Shares authorized and issued: 2,000 2,000 2,000 ---------- ---------- STOCKHOLDER'S EQUITY Common Stock, $1 par value Shares authorized and issued: 5,000,000 5,000 5,000 Additional paid-in capital 144,494 126,494 Net unrealized gains (losses) on investments (Net of income tax: 1995 - $12,189; 1994 - $(57,902)) 22,637 (107,532) Retained earnings 435,280 377,049 Note receivable from PLC Employee Stock Ownership Plan (5,765) (5,936) ---------- ---------- TOTAL STOCKHOLDER'S EQUITY 601,646 395,075 ---------- ---------- $7,043,238 $6,110,704 ========== ========== SEE NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
PROTECTIVE LIFE INSURANCE COMPANY CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Dollars in thousands) (Unaudited)
NINE MONTHS ENDED SEPTEMBER 30 1995 1994 CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 58,331 $ 50,919 Adjustments to reconcile net income to net cash provided by operating activities: Amortization of deferred policy acquisition costs 63,194 60,194 Capitalization of deferred policy acquisition costs (61,286) (89,295) Depreciation expense 3,233 3,409 Deferred income taxes (5,952) (11,084) Accrued income taxes 10,672 (2,642) Interest credited to universal life and investment products 213,303 183,642 Policy fees assessed on universal life and investment products (74,772) (58,887) Change in accrued investment income and other receivables (116,522) 9,636 Change in policy liabilities and other policyholders' funds of traditional life and health products 131,225 84,215 Change in other liabilities (10,224) 6,502 Other (net) (3,515) (2,168) ---------- --------- Net cash provided by operating activities 207,687 234,441 ---------- --------- CASH FLOWS FROM INVESTING ACTIVITIES Maturities and principal reductions of investments Investments available for sale 219,760 325,243 Other 49,536 129,296 Sale of investments Investments available for sale 863,479 349,944 Other 4,243 16,183 Cost of investments acquired Investments available for sale (1,329,735) (1,336,274) Other (243,788) (112,964) Acquisitions and bulk reinsurance assumptions 39,328 Purchase of property and equipment (4,859) (2,933) Sale of property and equipment 112 1,817 ----------- ---------- Net cash used in investing activities (441,252) (590,360) ----------- ---------- CASH FLOWS FROM FINANCING ACTIVITIES Capital contribution from PLC 18,000 Proceeds from borrowings under line of credit arrangements and debt 981,100 373,186 Principal payments on line of credit arrangements and debt (964,100) (373,258) Principal payment on surplus note to PLC (4,750) Dividends to PLC (100) (50) Investment product deposits and change in universal life deposits 734,707 1,064,910 Investment product withdrawals (535,234) (728,070) ----------- ---------- Net cash provided by financing activities 234,373 331,968 ----------- ---------- DECREASE IN CASH 808 (23,951) CASH AT BEGINNING OF PERIOD 0 23,951 ----------- ---------- CASH AT END OF PERIOD $ 808 $ 0 =========== ========== SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION Cash paid during the period: Interest on notes and mortgages payable $ 2,579 $ (3,713) Income taxes $ 25,332 $ (37,687) SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES Reduction of principal on note from ESOP $ 171 $ 28 Acquisitions and bulk reinsurance assumptions Assets acquired $ 613 $ 41,818 Liabilities assumed (21,800) (49,049) ----------- ---------- Net $ (21,187) $ (7,231) =========== ========== SEE NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
PROTECTIVE LIFE INSURANCE COMPANY NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (UNAUDITED) NOTE A - BASIS OF PRESENTATION The accompanying unaudited consolidated condensed financial statements of Protective Life Insurance Company ("Protective Life") have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the disclosures required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) necessary for a fair presentation have been included. Operating results for the nine month period ended September 30, 1995 are not necessarily indicative of the results that may be expected for the year ending December 31, 1995. For further information, refer to the consolidated financial statements and notes thereto included in Protective Life's annual report on Form 10-K for the year ended December 31, 1994. Protective Life is a wholly-owned subsidiary of Protective Life Corporation ("PLC"). NOTE B - COMMITMENTS AND CONTINGENT LIABILITIES Under insurance guaranty fund laws, in most states, insurance companies doing business therein can be assessed up to prescribed limits for policyholder losses incurred by insolvent companies. Protective Life does not believe such assessments will be materially different from amounts already provided for in the financial statements. Most of these laws do provide, however, that an assessment may be excused or deferred if it would threaten an insurer's own financial strength. Protective Life and its subsidiaries, like other life and health insurers, from time to time are involved in lawsuits, in which the plaintiff may seek punitive damage awards as well as compensatory damage awards. To date, no such lawsuit has resulted in the award of any material amount of damages against Protective Life. Although the outcome of any litigation cannot be predicted with certainty, Protective Life believes that such litigation will not have a material adverse effect on the financial position of Protective Life. NOTE C - STATUTORY REPORTING PRACTICES Financial statements prepared in conformity with generally accepted accounting principles (i.e., GAAP) differ in some respects from the statutory accounting practices prescribed or permitted by insurance regulatory authorities. At September 30, 1995 and for the nine months then ended, Protective Life and its life insurance subsidiaries had consolidated stockholder's equity and net income prepared in conformity with statutory reporting practices of $325.5 million and $74.0 million, respectively. NOTE D - RECENTLY ADOPTED ACCOUNTING STANDARDS At December 31, 1993, Protective Life adopted Statement of Financial Accounting Standards ("SFAS") No. 115, "Accounting for Certain Investments in Debt and Equity Securities." For purposes of adopting SFAS No. 115 Protective Life has classified all of its investments in fixed maturities, equity securities, and short-term investments as "available for sale." As prescribed in SFAS No. 115, these investments are recorded at their market values with the resulting net unrealized gain or loss, net of income tax and a related adjustment to deferred policy acquisition costs, recorded as a component of stockholder's equity. Protective Life's balance sheets at September 30, 1995 and December 31, 1994, prepared on the basis of reporting investments at amortized cost rather than at market values, are as follows: SEPTEMBER 30, 1995 DECEMBER 31, 1994 (IN THOUSANDS) Total investments $5,937,790 $5,499,511 Deferred policy acquisition costs 419,759 400,480 All other assets 650,863 376,146 ---------- ---------- $7,008,412 $6,276,137 ========== ========== Deferred income taxes $ 37,282 $ 43,235 All other liabilities 6,390,121 5,728,296 ---------- ---------- 6,427,403 5,771,531 Redeemable preferred stock 2,000 2,000 Stockholder's equity 579,009 502,606 ---------- ---------- $7,008,412 $6,276,137 ========== ========== On January 1, 1995 Protective Life adopted 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." Under the new standards, a loan is considered impaired, based on current information and events, if it is probable that Protective Life will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. The measurement of impaired loans is generally based on the present value of expected future cash flows discounted at the historical effective interest rate, except that all collateral-dependent loans are measured for impairment based on the fair value of the collateral. Since Protective Life's mortgage loans are collateralized by real estate, any assessment of impairment is based upon the estimated fair value of the real estate. Based on Protective Life's evaluation of its mortgage loan portfolio, Protective Life does not expect any material losses on its mortgage loans, and therefore no allowance for losses is required under SFAS No. 114 at January 1, 1995 or September 30, 1995. ITEM 2. MANAGEMENT'S NARRATIVE ANALYSIS OF THE RESULTS OF OPERATIONS Protective Life Insurance Company ("Protective Life") is a wholly-owned and the principal operating subsidiary of Protective Life Corporation ("PLC"), an insurance holding company whose common stock is traded on the New York Stock Exchange. Founded in 1907, Protective Life provides financial services through the production, distribution, and administration of insurance and investment products. In accordance with General Instruction H(2)(a), Protective Life includes the following analysis with the reduced disclosure format. REVENUES The following table sets forth revenues by source for the period shown: NINE MONTHS PERCENTAGE ENDED INCREASE SEPTEMBER 30 (DECREASE) (IN THOUSANDS) 1995 1994 Premiums and policy fees $277,460 $289,362 (4.1)% Net investment income 342,017 295,978 15.6 Realized investment gains 3,443 4,855 (29.1) Other income 4,992 2,871 73.9 ------- -------- $627,912 $593,066 ======== ======== Premiums and policy fees decreased $11.9 million or 4.1% in the first nine months of 1995 over the first nine months of 1994. Premiums and policy fees from the Financial Institutions Division decreased $54.6 million in the first nine months of 1995 as compared to the first nine months of 1994. This resulted from a reinsurance arrangement begun in the first quarter of 1995 whereby a significant portion of the Division's new sales are being ceded to a reinsurer. Increases in premiums and policy fees from the Group and Individual Life Divisions represent increases of $12.7 million and $10.2 million, respectively. Policy fees related to the Company's variable annuity increased $2.1 million in the first nine months of 1995 as compared to the same period in 1994. The assumption of a block of payroll deduction policies in the second quarter of 1994 resulted in a $1.8 million increase in premiums and policy fees in 1995. The assumption of a block of policies in the fourth quarter of 1994 resulted in a $17.0 million increase in premiums and policy fees in 1995. The reinsurance of a block of policies in the second quarter of 1995 resulted in a $4.7 million increase in premiums and policy fees. Decreases in older acquired blocks resulted in a $5.8 million decrease in premiums and policy fees. Net investment income in the first nine months of 1995 increased by $46.0 million or 15.6% over the corresponding period of the preceding year, primarily due to increases in the average amount of invested assets. Invested assets have increased primarily due to receiving annuity and guaranteed investment contract ("GIC") deposits and to acquisitions. Annuity and GIC deposits are not considered revenues in accordance with generally accepted accounting principles. These deposits are included in the liability section of the balance sheet. The assumption of two blocks of policies in 1994 and one block of policies in the second quarter of 1995 resulted in an increase in net investment income of $10.1 million in the first nine months of 1995. Protective Life generally purchases its investments with the intent to hold to maturity by purchasing investments that match future cash-flow needs. However, Protective Life may sell any of its investments to maintain proper matching of assets and liabilities. Accordingly, Protective Life has classified its fixed maturities and certain other securities as "available for sale." The sales of investments that have occurred have largely resulted from portfolio management decisions to maintain proper matching of assets and liabilities. Realized investment gains for the first nine months of 1995 were $1.4 million lower than the corresponding period of 1994. Other income consists primarily of fees from administrative-services-only types of group accident and health insurance contracts, and from rental of space in its administrative building to PLC. INCOME BEFORE INCOME TAX The following table sets forth income or loss before income tax by business segment for the periods shown: INCOME (LOSS) BEFORE INCOME TAX NINE MONTHS ENDED SEPTEMBER 30 (IN THOUSANDS) BUSINESS SEGMENT 1995 1994 Acquisitions $36,867 $28,605 Financial Institutions 5,938 6,055 Group 8,004 7,103 Guaranteed Investment Contracts 24,446 28,329 Individual Life 15,147 12,699 Investment Products 7,774 4,091 Corporate and Other (10,402) (12,477) Unallocated Realized Investment Gains (Losses) 609 474 ------- -------- $88,383 $74,879 ======= ======== Pretax earnings from the Acquisitions Division increased $8.3 million in the first nine months of 1995 as compared to the same period of 1994. Earnings from the Acquisitions Division are expected to decline over time (due to the lapsing of policies resulting from deaths of insureds or terminations of coverage) unless new acquisitions are made. As previously discussed, Protective Life assumed two blocks of policies during 1994 and one block of policies during the second quarter of 1995. These acquisitions represent $6.8 million of the increase. Improved mortality experience in older acquired blocks of policies resulted in a $1.5 million increase in pretax earnings in the first nine months of 1995 as compared to the first nine months of 1994. Pretax earnings of the Financial Institutions Division were $0.1 million lower in the first nine months of 1995 as compared to the same period in 1994. The Division has entered into a reinsurance arrangement whereby a significant portion of the Division's new sales are being ceded to a reinsurer. In the 1995 second quarter the Division also reinsured a block of older policies. Though the Division's reported earnings were slightly reduced by approximately $0.8 million, these reinsurance transactions are expected to improve the Division's return on investment. Group pretax earnings were $0.9 million higher in the first nine months of 1995 as compared to the first nine months of 1994 due to improved earnings from accident and health products and dental products which were partially offset by lower earnings from life and cancer products. The Guaranteed Investment Contract ("GIC") Division had pretax operating earnings of $25.2 million in the first nine months of 1995 and $23.4 million in the corresponding period of 1994. At September 30, 1995, GIC deposits totaled $2.5 billion compared to $2.3 billion one year earlier. Increased earnings due to higher deposits were offset by higher expenses. Realized investment losses associated with this Division in the first nine months of 1995 were $0.8 million, as compared to realized investment gains of $4.9 million in the same period last year. As a result, total pre-tax earnings were $24.4 million in the first nine months of 1995 compared to $28.3 million for the same period in 1994. Individual Life pretax earnings were $2.4 million higher in the first nine months of 1995 as compared to the first nine months of 1994. At December 31, 1994 Protective Life reduced certain statutory policy liabilities for certain term-like products to be more consistent with current regulation and industry practice. This reduced investment income allocated to the Division in the first nine months of 1995 by approximately $2.3 million when compared to the same period in 1994. Additionally, expenses to develop new marketing ventures were $1.5 million higher in the first nine months of 1995 as compared to the first nine months of 1994. These decreases were offset by earnings from a growing amount of business in force. Investment Products Division pretax earnings were $3.7 million higher in the first nine months of 1995 compared to the same period of 1994. Realized investment gains associated with the Division, net of related amortization of deferred policy acquisition costs, were $2.5 million higher than the same period last year. During 1994 the Division completed the amortization of the deferred policy acquisition costs related to its book value annuities. Accordingly, 1995 operating earnings were $5.2 million higher due to lower amortization. This increase was largely offset by higher expenses related to the Company's variable annuity which was introduced in early 1994, and to increases in other expenses. The Corporate and Other segment consists of several small insurance lines of business, net investment income and other operating expenses not identified with the preceding operating divisions (including interest on substantially all debt), and the operations of a small noninsurance subsidiary. Pretax losses for this segment were $2.1 million lower in the first nine months of 1995 as compared to the first nine months of 1994 primarily due to lower expenses, including management fees to PLC. INCOME TAXES The following table sets forth the effective tax rates for the periods shown: NINE MONTHS ENDED ESTIMATED EFFECTIVE SEPTEMBER 30 INCOME TAX RATES 1995 34% 1994 32 The effective income tax rate for the first nine months of 1994 was 32%. During the third quarter the estimated income tax rate for 1995 was increased from 33% to 34%. NET INCOME The following table sets forth net income for the periods shown: NINE MONTHS NET INCOME ENDED TOTAL PERCENTAGE SEPTEMBER 30 (IN THOUSANDS) INCREASE 1995 $58,331 14.6% 1994 50,919 34.3 Compared to the same period in 1994, net income in the first nine months of 1995 increased $7.4 million, reflecting improved operating earnings in the Acquisitions, Group, Individual Life and Investment Products Divisions and the Corporate and Other segment, which were partially offset by lower earnings in the Financial Institutions and Guaranteed Investment Contracts Divisions. RECENTLY ISSUED ACCOUNTING STANDARDS In January 1995, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 120, "Accounting and Reporting by Mutual Life Insurance Enterprises and by Insurance Enterprises for Certain Long-Duration Participating Contracts." In March 1995, the FASB issued SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long- Lived Assets to Be Disposed Of." In May 1995, the FASB issued SFAS No. 122, "Accounting for Mortgage Servicing Rights." In October 1995, the FASB issued SFAS No. 123, "Accounting for Stock Based Compensation." Protective Life anticipates that the impact of adopting these accounting standards will be immaterial to its financial condition. Item 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibit 27 - Financial data schedule SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has caused this report to be signed on its behalf by the undersigned thereunto duly authorized. PROTECTIVE LIFE INSURANCE COMPANY Date: November 13, 1995 /S/ JERRY W. DEFOOR Jerry W. DeFoor Vice President and Controller, and Chief Accounting Officer (Duly authorized officer) EX-27 2
7 This schedule contains summary financial information extracted from the consolidated financial statements of Protective Life Insurance Company and is qualified in its entirety by reference to such financial statements. 1,000 9-MOS DEC-31-1995 JAN-01-1995 SEP-30-1995 3,909,874 0 0 47,456 1,718,900 21,040 5,980,092 808 223,457 412,283 7,043,238 1,869,028 152,296 0 144,468 17,000 5,000 2,000 0 596,646 7,043,238 277,460 342,017 3,443 4,992 383,039 63,193 93,297 88,383 30,052 58,331 0 0 0 58,331 0 0 0 0 0 0 0 0 0 Protective Life Insurance Company is a wholly-owned subsidiary of Protective Life Corporation (NYSE:PL) and is not required to present EPS information.
-----END PRIVACY-ENHANCED MESSAGE-----