-----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, VABcsePbfCFTJw1BpXROKh9J4XU+JAsyKi3CWgnGUJDuO50QVFBkH86JY4NCE1K0 ZiiD/HlOraWhVIBW/jvO9w== /in/edgar/work/0000910739-00-000028/0000910739-00-000028.txt : 20001115 0000910739-00-000028.hdr.sgml : 20001115 ACCESSION NUMBER: 0000910739-00-000028 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000930 FILED AS OF DATE: 20001114 FILER: COMPANY DATA: COMPANY CONFORMED NAME: LINCOLN BENEFIT LIFE CO CENTRAL INDEX KEY: 0000910739 STANDARD INDUSTRIAL CLASSIFICATION: [ ] IRS NUMBER: 470766853 STATE OF INCORPORATION: NE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 812-08528 FILM NUMBER: 766895 BUSINESS ADDRESS: STREET 1: P O BOX 80469 STREET 2: 2940 SOUTH 84TH ST CITY: LINCOLN STATE: NE ZIP: 68501 BUSINESS PHONE: 4024794061 MAIL ADDRESS: STREET 1: PO BOX 80469 STREET 2: 206 S 13TH STREET CITY: LINCOLN STATE: NE ZIP: 68501 10-Q 1 0001.txt FORM 10-Q 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 $100 per share all of which shares are held by Allstate Life Insurance Company. PART I - FINANCIAL INFORMATION Item 1. FINANCIAL STATEMENTS Statements of Operations Three Months Ended September 30, 2000 and September 30, 1999 (Unaudited)................................... 3 Statements of Financial Position September 30, 2000(Unaudited) and December 31, 1999.............. 4 Statements of Cash Flows Three Months Ended September 30, 2000 and September 30, 1999 (Unaudited).............................. 5 Notes to Financial Statements.. .................................. 6 Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.......................10 Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK*.................................................N/A PART II - OTHER INFORMATION Item 1. LEGAL PROCEEDINGS................................................. 14 Item 2. CHANGES IN SECURITIES AND USE OF PROCEEDS*........................N/A Item 3. DEFAULTS UPON SENIOR SECURITIES*..................................N/A Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS*..........................................................N/A Item 5. OTHER INFORMATION................................................. 14 Item 6. EXHIBITS AND REPORTS ON FORM 8-K.................................. 14 SIGNATURE PAGE.............................................................. 15 *Omitted pursuant to General Instruction H(2) of Form 10-Q. 2 PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS LINCOLN BENEFIT LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS
Three Months Ended Nine Months Ended September 30, September 30, -------------------------------- --------------------------------- -------------------------------- --------------------------------- ($ 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 ======== ======== ======== =======
See notes to financial statements. 3 LINCOLN BENEFIT LIFE INSURANCE COMPANY STATEMENTS OF FINANCIAL POSITION
September 30, December 31, 2000 1999 ------------------- ------------------- ------------------- ------------------- ($ 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 ============= ===========
See notes to financial statements. 4 LINCOLN BENEFIT LIFE INSURANCE COMPANY STATEMENTS OF CASH FLOWS
Nine Months Ended September 30, ---------------------------------------- ---------------------------------------- ($ in thousands) 2000 1999 ----------------- ----------------- ---------------------------------------- (Unaudited) Cash flows from operating activities 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 ======== ======
See notes to financial statements. 5 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 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.
Three months ended Six months ended September 30, September 30, ------------------------------ ---------------------------------- ($ in thousands) 2000 1999 2000 1999 ---------------- ------------- ---------------- ----------------- 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
The Company also purchases reinsurance from non-affiliates. The following table summarizes amounts which were ceded to third parties under reinsurance agreements.
Three months ended Six months ended September 30, September 30, ------------------------------ ---------------------------------- ($ in thousands) 2000 1999 2000 1999 ---------------- ------------- ---------------- ----------------- Premiums $ 56,454 $ 71,315 $ 151,741 $ 146,940 Credited interest, policy benefits and certain expenses 60,231 61,924 173,804 170,199
7 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:
Three 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 $2,051 $(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) ======= ========
8 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 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 - ---------------------
($ in thousands) Three Months Ended Six Months Ended September 30, September 30, 2000 1999 2000 1999 -------------- -------------- -------------- ---------------- 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 ======= ======= ======= =======
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 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 $8.9 million, respectively, primarily attributable to higher investment balances. Period to period fluctuations in realized capital gains are largely the result of timing of sales, reflecting management's decision on positioning the portfolio, as well as assessments of individual securities and overall market conditions. Financial Position - ------------------
($ in thousands) September 30, December 31, 2000 1999 ------------ ------------ 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 =========== ===========
[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. 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 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 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 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 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 15 EX-27 2 0002.txt FDS --
7 THIS SCHEUDLE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM STATEMENTS OF FINANCIAL POSITION AT SEPTEMBER 30, 2000; STATEMENTS OF OPERATIONS NINE MONTHS ENDED SEPTEMBER 30, 2000; AND STATEMENTS OF CASH FLOWS NINE MONTHS ENDED SEPTEMBER 30, 2000. 0000910739 Lincoln Benefit Life 1,000 U.S. Dollars 6-MOS DEC-31-2000 JAN-01-2000 SEP-30-2000 1 159,439 0 0 0 0 0 169,982 92 8,605,346 0 10,544,882 501,349 0 0 8,092,540 0 0 0 2,500 162,417 10,544,882 0 8,887 0 0 0 0 0 8,867 3,102 5,765 0 0 0 5,765 0 0 0 0 0 0 0 0 0
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