Exhibit 99.7
United Life & Annuity Insurance Company
Balance Sheet - Statutory Basis
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September 30,
2003
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(In Thousands)
Admitted assets
Cash and invested assets:
Bonds $ 595,547
Common stocks 2
Subsidiaries 25
Mortgage loans 38,032
Policy loans 930
Other invested assets 20,530
Cash and short-term investments 1,944
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Total cash and invested assets 657,010
Deferred and uncollected premiums (27)
Accrued investment income 7,021
Reinsurance balances recoverable 53
Federal income tax recoverable 1,709
Net deferred tax asset 2,805
Separate account assets 60,745
Other assets 90
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Total admitted assets $ 729,406
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Liabilities and capital and surplus
Liabilities:
Policy and contract liabilities:
Life and annuity reserves 556,238
Deposit type contracts 13,959
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Total policy and contract liabilities 570,197
Accounts payable and accrued expenses 1,434
Indebtedness to related parties 1,219
Interest maintenance reserve 5,262
Asset valuation reserve 5,018
Other liabilities 11,344
Separate account liabilities 60,745
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Total liabilities 655,219
Capital and surplus:
Common stock 8,401
Additional paid-in capital 41,241
Unassigned surplus 24,545
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Total capital and surplus 74,187
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Total liabilities and capital and surplus $ 729,406
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United Life & Annuity Insurance Company
Statements of Operations - Statutory Basis
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Nine months ended September 30,
2003 2002
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(In Thousands)
Premiums and other revenues:
Life, annuity, and accident and health premiums $ 1,469 $ 1,027
Policy proceeds and dividends left on deposit 462 179
Net investment income 26,962 33,648
Amortization of interest maintenance reserve 1,498 990
Commissions, expense allowances and reserve adjustments
on reinsurance ceded 286 374
Other income 887 2,064
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Total premiums and other revenues 31,564 38,282
Benefits paid or provided:
Annuity benefits 15,542 16,562
Surrender benefits 49,821 82,125
Interest on policy or contract funds 55 497
Other benefits (25) -
Life contract withdrawals 877 887
Change in life, annuity, and accident and health reserves (30,518) (57,279)
Net transfers to separate accounts (10,229) (13,329)
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Total benefits paid or provided 25,523 29,463
Insurance expenses:
Commissions 426 443
General expenses 1,940 1,556
Insurance taxes, licenses and fees, excluding federal
income taxes 337 43
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Total insurance expenses 2,703 2,042
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Gain (loss) from operations before federal income
taxes and net realized capital losses 3,338 6,777
Federal income taxes (1,298) (1,873)
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Gain from operations before net realized capital losses 4,636 8,650
Net realized capital gains or (losses), net of income
taxes 2003 - $0; 2002 - $1,992 and excluding net transfers
to the interest maintenance reserve 2003 - $0; 2002 - $3,003 2,862 (6,482)
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Net income (loss) $ 7,498 $ 2,168
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United Life & Annuity Insurance Company
Statements of Changes in Capital and Surplus - Statutory Basis
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Nine months ended September 30,
2003 2002
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(In Thousands)
Common stock:
Balance at beginning and end of year $ 8,401 $ 8,401
Additional paid-in capital:
Balance at beginning and end of year 41,241 41,241
Unassigned surplus:
Balance at beginning and end of year 33,210 17,800
Net income 7,498 2,168
Change in net unrealized capital gains or losses 78 (2,178)
Change in nonadmitted assets 1,030 (9,847)
Change in asset valuation reserve (921) 4,529
Change in net deferred income tax (3,680) 12,811
Dividends to stockholders (12,400) -
Other adjustments (270) (356)
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Balance at end of year 24,545 24,927
Total capital and surplus $ 74,187 $ 74,569
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United Life & Annuity Insurance Company
Statements of Cash Flows - Statutory Basis
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Nine months ended September 30,
2003 2002
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(In Thousands)
Operations
Premiums, policy proceeds, and other considerations
received, net of reinsurance paid $ 1,469 $ 1,198
Net investment income received 28,981 36,526
Commission and expense allowances received on reinsurance ceded (2,802) 374
Benefits paid (67,204) (84,529)
Net transfers to separate accounts 9,675 15,206
Insurance expenses paid - (2,164)
Federal income taxes (paid) received 995 4,590
Net other (expenses) revenues 1,594 2,158
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Net cash used in operations (27,292) (26,641)
Investments
Proceeds from sales, maturities, or repayments of investments:
Bonds 816,936 433,061
Mortgage loans 1,277 1,789
Real estate - 54
Other invested assets 64 81
Net gain or (losses) on cash and short-term investments - (264)
Miscellaneous proceeds 14,659 (4,722)
Net tax on capital gains - (1,992)
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Net proceeds from sales, maturities, or repayments of investments 832,936 428,007
Cost of investments acquired:
Bonds 794,630 388,217
Mortgage loans 4,480 7,106
Other invested assets - 99
Miscellaneous applications 6,582 -
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Total cost of investments acquired 805,692 395,422
Net increase (decrease) in policy loans (6) (68)
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Net cash used in investment activities 27,238 32,653
Financing and miscellaneous activities
Cash provided (used):
Net deposits on deposit-type contract funds (967) -
Dividends to stockholders (12,400) -
Other sources 624 (19,537)
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Net cash used in financing and miscellaneous activities (12,743) (19,537)
Net change in cash and short-term investments (12,797) (13,525)
Cash and short-term investments:
Beginning of year 14,741 18,299
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End of year $ 1,944 $ 4,774
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