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, 1996
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; 333-02249
Protective Life Insurance Company
(Exact name of registrant as specified in its charter)
Tennessee 63-0169720
(State or other jurisdiction of (IRS Employer Identification Number)
incorporation or organization)
2801 Highway 280 South
Birmingham, Alabama 35223
(Address of principal executive offices and zip code)
(205) 879-9230
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. YES X NO
Number of shares of Common Stock, $1.00 par value, outstanding as of November 8,
1996: 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 and Nine
Months ended September 30, 1996 and 1995 (unaudited)
Consolidated Condensed Balance Sheets as of September 30, 1996
(unaudited) and December 31, 1995
Consolidated Condensed Statements of Cash Flows for the
Nine Months ended September 30, 1996 and 1995 (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, 1996, and
the related consolidated condensed statements of income for the three-month and
nine-month periods ended September 30, 1996 and 1995 and consolidated condensed
statements of cash flows for the nine-month periods ended September 30, 1996 and
1995. 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, 1995, 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
12, 1996, 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 on those consolidated financial statements. In our
opinion, the information set forth in the accompanying consolidated condensed
balance sheet as of December 31, 1995, 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 23, 1996
2
PROTECTIVE LIFE INSURANCE COMPANY
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(Dollars in thousands)
(Unaudited)
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30 SEPTEMBER 30
-------------------- ----------------------
1996 1995 1996 1995
---- ---- ---- ----
REVENUES
Premiums and policy fees (net of reinsurance ceded:
three months: 1996 - $81,453; 1995 - $79,908;
nine months: 1996 - $247,988; 1995 - $222,351) $110,310 $101,036 $343,111 $310,502
Net investment income 124,516 118,162 369,280 342,017
Realized investment gains (losses) 861 1,337 5,882 3,443
Other income 902 799 4,100 2,804
-------- -------- -------- ---------
236,589 221,334 722,373 658,766
-------- -------- -------- --------
BENEFITS AND EXPENSES
Benefits and settlement expenses (net of reinsurance ceded:
three months: 1996 - $64,420; 1995 - $54,638;
nine months: 1996 - $182,201; 1995 - $159,760) 157,931 141,934 466,692 416,081
Amortization of deferred policy acquisition costs 18,822 17,643 70,162 63,193
Other operating expenses (net of reinsurance ceded:
three months: 1996 - $24,368; 1995 - $23,173;
nine months: 1996 - $67,183; 1995 - $58,645) 32,031 30,040 95,746 91,109
-------- -------- -------- --------
208,784 189,617 632,600 570,383
-------- -------- -------- --------
INCOME BEFORE INCOME TAX 27,805 31,717 89,773 88,383
Income tax expense 9,494 11,352 30,647 30,052
-------- -------- ------- --------
NET INCOME $ 18,311 $ 20,365 $ 59,126 $ 58,331
======== ======== ======== ========
See notes to consolidated condensed financial statements
3
PROTECTIVE LIFE INSURANCE COMPANY
CONSOLIDATED CONDENSED BALANCE SHEETS
(Dollars in thousands)
SEPTEMBER 30 DECEMBER 31
1996 1995
------------- ------------
(Unaudited)
ASSETS
Investments:
Fixed maturities $4,507,650 $3,891,932
Equity securities 56,085 38,711
Mortgage loans on real estate 1,516,409 1,835,057
Investment in real estate, net 19,219 20,788
Policy loans 165,706 143,372
Other long-term investments 23,637 43,875
Short-term investments 147,492 46,891
----------- -----------
Total investments 6,436,198 6,020,626
Cash 11,959 6,198
Accrued investment income 69,002 61,004
Accounts and premiums receivable, net 31,818 35,492
Reinsurance receivables 349,806 271,018
Deferred policy acquisition costs 477,153 410,183
Property and equipment, net 35,293 34,211
Receivables from related parties 8,895 1,961
Other assets 12,727 13,096
Assets held in separate accounts 488,298 324,904
----------- -----------
TOTAL ASSETS $7,921,149 $7,178,693
========== ==========
LIABILITIES
Policy liabilities and accruals $2,586,716 $2,121,921
Guaranteed investment contract deposits 2,514,374 2,451,693
Annuity deposits 1,304,141 1,280,069
Other policyholders' funds 142,368 134,380
Other liabilities 112,994 109,538
Accrued income taxes 4,406 838
Deferred income taxes 27,146 67,420
Indebtedness to related parties 24,693 34,693
Liabilities related to separate accounts 488,298 324,904
----------- -----------
TOTAL LIABILITIES 7,205,136 6,525,456
---------- ----------
COMMITMENTS AND CONTINGENT LIABILITIES - NOTE C
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 223,194 144,494
Net unrealized gains (losses) on investments
(Net of income tax: 1996 - ($9,328); 1995 - $31,157) (17,323) 57,863
Retained earnings 508,721 449,645
Note receivable from PLC
Employee Stock Ownership Plan (5,579) (5,765)
------------ ------------
TOTAL STOCKHOLDER'S EQUITY 714,013 651,237
----------- -----------
$7,921,149 $7,178,693
========== ==========
See notes to consolidated condensed financial statements
4
PROTECTIVE LIFE INSURANCE COMPANY
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(Unaudited)
NINE MONTHS ENDED
SEPTEMBER 30
1996 1995
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 59,126 $ 58,331
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization of deferred policy acquisition 70,162 63,194
Capitalization of deferred policy acquisition costs (70,146) (61,286)
Depreciation expense 3,997 3,233
Deferred income tax 211 (5,952)
Accrued income tax 3,568 10,672
Interest credited to universal life and investment products 206,763 213,303
Policy fees assessed on universal life and investment products (84,362) (74,772)
Change in accrued investment income and other receivables (84,380) (116,522)
Change in policy liabilities and other policyholders'
funds of traditional life and health products 53,332 131,225
Change in other liabilities 2,842 (10,224)
Other (net) (1,776) (3,515)
----------- -----------
Net cash provided by operating activities 159,337 207,687
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES
Maturities and principal reductions of investments
Investments available for sale 457,488 219,760
Other 94,816 49,536
Sale of investments
Investments available for sale 750,557 863,479
Other 561,440 4,243
Cost of investments acquired
Investments available for sale (2,049,715) (1,329,735)
Other (335,397) (243,788)
Acquisitions and bulk reinsurance assumptions 172,726
Purchase of property and equipment (5,222) (4,859)
Sale of property and equipment 143 112
------------- -------------
Net cash used in investing activities (353,164) (441,252)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Capital contribution from PLC 78,699 18,000
Proceeds from borrowings under line of credit arrangements and debt 742,750 981,100
Principal payments on line of credit arrangements and debt (742,750) (964,100)
Principal payment on surplus note to PLC (10,000)
Dividends to PLC (50) (100)
Investment product deposits and change in universal life deposits 842,765 734,707
Investment product withdrawals (711,826) (535,234)
----------- ----------
Net cash provided by financing activities 199,588 234,373
----------- ----------
INCREASE (DECREASE) IN CASH 5,761 808
CASH AT BEGINNING OF PERIOD 6,198
----------- ---------
CASH AT END OF PERIOD $ 11,959 $ 808
=========== ==========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION Cash paid during the period:
Interest on notes and mortgages payable $ 3,721 $ 5,143
Income taxes $ 26,809 $ 25,332
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND
FINANCING ACTIVITIES
Reduction of principal on note from ESOP $ 186 $ 171
Acquisitions and bulk reinsurance assumptions
Assets acquired $ 200,737 $ 613
Liabilities assumed (253,480) (21,800)
------------ -----------
Net $ (52,743) $(21,187)
============ ===========
See notes to consolidated condensed financial statements
5
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, 1996 are not necessarily
indicative of the results that may be expected for the year ending December 31,
1996. The year-end consolidated condensed balance sheet data was derived from
audited financial statements, but does not include all disclosures required by
generally accepted accounting principles. 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, 1995.
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 any
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.
A substantial number of class action and other civil lawsuits have been
filed against life and health insurers in the jurisdictions in which Protective
Life does business involving the insurers' sales practices, alleged agent
misconduct, failure to properly supervise agents, and other matters. Some of the
lawsuits have resulted in the award of substantial settlements with, or
judgments against, the insurers, including material amounts of punitive damages
that are disproportionate to the actual damages. In some states (including
Alabama), juries have substantial discretion in awarding punitive damages, which
creates the potential for unpredictable material adverse judgments in any given
punitive damage suit. In addition, in some class action and other lawsuits
involving insurers' sales practices, insurers have made material settlement
payments. Protective Life and its subsidiaries, like other life and health
insurers, in the course of business are involved in such litigation. Pending
litigation includes a class action filed in Jefferson County (Birmingham),
Alabama with respect to the previously discussed cancer premium refunds.
Although the outcome of any litigation cannot be predicted with certainty,
Protective Life believes that at the present time there are no pending or
threatened lawsuits that are reasonably likely to have a material adverse effect
on the financial position of Protective Life.
6
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, 1996 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 $458.9 million and $79.5 million, respectively.
NOTE D - INVESTMENTS
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, 1996 and December 31,
1995, prepared on the basis of reporting investments at amortized cost rather
than at market values, are as follows:
SEPTEMBER 30, 1996 DECEMBER 31, 1995
------------------ -----------------
(IN THOUSANDS)
Total investments $6,464,855 $5,915,357
Deferred policy acquisition costs 475,137 426,432
All other assets 1,007,808 747,884
---------- ----------
$7,947,800 $7,089,673
========== ==========
Deferred income taxes $ 36,474 $ 36,263
All other liabilities 7,177,990 6,458,036
---------- ----------
7,214,464 6,494,299
Redeemable preferred stock 2,000 2,000
Stockholder's equity 731,336 593,374
---------- ----------
$7,947,800 $7,089,673
========== ==========
NOTE E - RECENTLY ADOPTED ACCOUNTING STANDARDS
At January 1, 1996, Protective Life adopted SFAS No. 120, "Accounting
and Reporting by Mutual Life Insurance Enterprises and by Insurance
Enterprises for Certain Long-Duration Contracts"; SFAS No. 121, "Accounting for
the Impairment of Long-Lived Assets and for Long- Lived Assets to be Disposed
of"; and SFAS No. 122, "Accounting for Mortgage Servicing Rights". The adoption
of these accounting standards did not have a material effect on Protective
Life's financial statements.
7
NOTE F - RECLASSIFICATIONS
Certain reclassifications have been made in the previously reported
financial statements and accompanying notes to make the prior year amounts
comparable to those of the current year. Such reclassifications had no effect on
previously reported net income, total assets, or stockholder's equity.
8
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.
Protective Life has six operating divisions: Acquisitions, Financial
Institutions, Group, Guaranteed Interest Contracts, Individual Life, and
Investment Products. Protective Life also has an additional business segment
which is described herein as Corporate and Others.
Revenues
The following table sets forth revenues by source for the period shown,
and the percentage change from the prior period:
NINE MONTHS PERCENTAGE
ENDED INCREASE/
SEPTEMBER 30 (DECREASE)
(in Thousands)
1996 1995
---- ----
Premiums and policy fees $343,111 $310,502 10.5%
Net investment income 369,280 342,017 8.0
Realized investment gains 5,882 3,443 70.8
Other income 4,100 4,992 (17.9)
--------- ---------
$722,373 $660,954
========= =========
Premiums and policy fees increased $32.6 million or 10.5% in the first
nine months of 1996 over the first nine months of 1995. The coinsurance by the
Acquisitions Division of a block of policies in the first quarter of 1996
resulted in a $12.1 million increase in premiums and policy fees. Decreases in
older acquired blocks resulted in a $7.7 million decrease in premiums and policy
fees. Premiums and policy fees from the Financial Institutions Division
increased $5.6 million in the first nine months of 1996 as compared to the first
nine months of 1995. This resulted from the reinsurance of a block of policies
in the second quarter of 1996 representing a $26.9 million increase in premium
and policy fees. This increase was largely offset by decreases resulting from a
reinsurance arrangement, begun in 1995, whereby all of the Division's new credit
sales are being ceded to a reinsurer. Premium and policy fees from the Group
Division increased $6.3 million in the first nine months of 1996 as compared to
the same period in 1995. Premium
9
and policy fees related to the Division's dental business increased $14.9
million in the first nine months of 1996 as compared to the same period in 1995.
This increase was partially offset by a reduction to premiums related to a
refund of premiums to certain cancer insurance policyholders and to decreases in
traditional group health premiums. Increases in premiums and policy fees from
the Individual Life and Investment Product Divisions were $13.1 million and $2.8
million, respectively.
On October 7, 1996 Protective Life announced that it will make
voluntary refunds to certain of its cancer insurance policyholders and will
reduce premium rates charged to such policyholders until certain conditions are
met. The estimated refunds reduced the Group Division's premiums and policy
fees, as noted above.
Net investment income in the first nine months of 1996 increased by
$27.3 million 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. The assumption of a block of policies in
the first quarter of 1996 and a block of policies in the second quarter of 1996
resulted in an increase in net investment income of $13.5 million in the first
nine months of 1996 as compared to the same period in 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 approximate
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 resulted principally from portfolio
management decisions to maintain approximate matching of assets and liabilities.
Realized investment gains for the first nine months of 1996 were $2.4
million higher than the corresponding period of 1995. In the 1996 first quarter,
Protective Life sold $554 million of its commercial mortgage loans in a
securitization transaction, resulting in a $6.1 million realized investment
gain.
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 and
affiliates.
10
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 1996 1995
- ---------------- ---- ----
Acquisitions $38,888 $35,550
Financial Institutions 6,794 5,546
Group (166) 6,966
Guaranteed Investment Contracts 22,309 23,270
Individual Life 11,943 14,016
Investment Products 8,654 7,004
Corporate and Other (4,439) (4,578)
Unallocated Realized Investment Gains (Losses) 5,790 609
------- -------
$89,773 $88,383
======= =======
Pretax earnings from the Acquisitions Division increased $3.3 million
in the first nine months of 1996 as compared to the same period of 1995.
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. The Division's two most recent
acquisitions resulted in a $5.9 million increase in pretax earnings. Older
acquired blocks represented a $2.6 million decrease in the first nine months of
1996 as compared to the same period in 1995.
Pretax earnings of the Financial Institutions Division were $1.2
million higher in the first nine months of 1996 as compared to the same period
in 1995. Included in the Division's 1996 results are earnings of $2.1 million
from the coinsurance of a block of policies in the second quarter of 1996. The
reinsurance arrangement begun in 1995 to reinsure all of the Division's new
credit insurance sales and thereby improve the Division's return on investment,
reduced the Division's reported earnings for the first nine months of 1996 by
approximately $3.8 million, as contemplated at the date of the arrangement.
Group Division pretax earnings were $7.1 million lower the first nine
months of 1996 as compared to the first nine months of 1995. The previously
discussed estimate for the refund of cancer premiums and related expenses
resulted in a $6.8 million decrease in the Division's pretax earnings. Dental
earnings improved $1.9 million and traditional group health earnings declined by
$2.2 million.
The Guaranteed Investment Contract ("GIC") Division had pretax
operating earnings of $30.1 million in the first nine months of 1996 and $24.1
million in the corresponding period of 1995. This was due to improved operating
spreads and to the growth of GIC deposits placed with Protective Life. Realized
investment losses associated with this Division in the first nine months of 1996
were $7.8 million, as compared to $0.8 million in the same period last year. As
a result,
11
total pretax earnings were $22.3 million in the first nine months of 1996
compared to $23.2 million for the same period in 1995.
The Individual Life Division had pretax operating earnings of $10.8
million in the first nine months of 1996 as compared to $14.0 million in the
same period of 1995. The decrease was primarily due to higher expenses in the
first nine months of 1996 as compared to the same period last year. Realized
investment gains, net of related amortization of deferred policy acquisition
costs, associated with this Division were $1.1 million in 1996. As a result,
total pretax earnings were $11.9 million in the first nine months of 1996
compared to $14.0 million as in the first nine months of 1995 in which there
were no realized investment gains.
Investment Products Division pretax operating earnings were $6.2
million which was $1.4 million higher in the first nine months of 1996 compared
to the same period of 1995. Realized investment gains associated with the
Division, net of related amortization of deferred policy acquisition costs, were
$2.4 million as compared to $2.2 million last year, resulting in total pretax
earnings of $8.6 million in the first nine months of 1996 as compared to $7.0
million in the same period of 1995.
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 $0.1 million lower the first nine months of
1996 as compared to the first nine months of 1995.
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
1996 34.1%
1995 34.0
The effective income tax rate for the full year of 1995 was 34%.
Management's estimate of the effective income tax rate for 1996 is also 34%.
12
Net Income
The following table sets forth net income for the periods shown, and
the percentage change from the prior period:
NET INCOME
NINE MONTHS PERCENTAGE
ENDED TOTAL INCREASE/
SEPTEMBER 30 (IN THOUSANDS) (DECREASE)
1996 $59,126 1.4%
1995 58,331 14.6
Compared to the same period in 1995, net income in the first nine
months of 1996 increased $0.8 million, reflecting improved operating earnings in
the Acquisitions, Financial Institutions, Guaranteed Investment Contracts and
Investment Products Divisions and the Corporate and Other segment and higher
realized investment gains net of related amortization of deferred policy
acquisition costs which were offset by lower earnings in the Group and
Individual Life Divisions.
Recently Issued Accounting Standards
In June 1996 the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 125, "Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities". Protective
Life anticipates that the impact of adopting this accounting standard will be
immaterial to its financial condition. This statement is effective for
transactions entered into after January 1, 1997.
13
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 12, 1996 /s/ Jerry W. DeFoor
-------------------
Jerry W. DeFoor
Vice President and Controller,
and Chief Accounting Officer
(Duly authorized officer)
14