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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

SCHEDULE 13E-3/A

TRANSACTION STATEMENT UNDER SECTION 13(e) OF THE SECURITIES
EXCHANGE ACT OF 1934 AND RULE 13e-3 THEREUNDER

RULE 13e-3 TRANSACTION STATEMENT
(Pursuant to Section 13(E) Of The Securities Exchange Act Of 1934)

Liberty Financial Companies, Inc.
(Name of Issuer)

Liberty Financial Companies, Inc.
LFC Acquisition Corporation
Liberty Mutual Insurance Company
(Names of Person(s) Filing Statement)

Common Stock, Par Value $0.01 Per Share
(Title of Class of Securities)

530512-102
(CUSIP Number of Class of Securities)

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Christopher C. Mansfield, Esq. Christopher C. Mansfield, Esq. Kevin M. Carome, Esq.
Senior Vice President and LFC Acquisition Corporation Senior Vice President and General
General Counsel c/o Liberty Mutual Insurance Company Counsel
Liberty Mutual Insurance Company 175 Berkeley Street Liberty Financial Companies, Inc.
175 Berkeley Street Boston, MA 02117 600 Atlantic Avenue
Boston, MA 02117 (617) 357-9500 Boston, MA 02210
(617) 357-9500 (617) 371-2200
</Table>

(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications on Behalf of Person(s) Filing Statement)

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with copies to:

Stephen K. Fogg, Esq. William P. Gelnaw, Jr., Esq.
McDermott, Will & Emery Choate, Hall & Stewart
28 State Street Exchange Place
Boston, Massachusetts 02109 Boston, Massachusetts 02109
(617) 535-4096 (617) 248-5034

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This statement is filed in connection with (check the appropriate box):

a. [X] The filing of solicitation materials or an information statement
subject to Regulation 14A, Regulation 14C, or Rule 13e-3(c) under the
Securities Exchange Act of 1934.

b. [ ] The filing of a registration statement under the Securities Act of 1933.

c. [ ] A tender offer.

d. [ ] None of the above.

Check the following box if the soliciting materials or information
statement referred to in checking box (a) are preliminary copies. [ ]

Check the following box if the filing is a final amendment reporting
the results of the transaction. [ ]

- --------------------------------------------------------------------------------
CALCULATION OF FILING FEE

TRANSACTION VALUATION* AMOUNT OF FILING FEE**

$483,290,964 $96,658
- --------------------------------------------------------------------------------

* Estimated for the purposes of calculating the amount of the filing fee only.
The transaction valuation was determined by multiplying 14,452,480 shares of
common stock, par value $0.01 per share, of Liberty Financial Companies, Inc. by
$33.44 per share. Such number of shares represents the 48,927,740 shares
outstanding as of July 12, 2001, less the 34,475,260 shares of common stock of
Liberty Financial Company, Inc. beneficially owned by Liberty Mutual Insurance
Company on that date, which shares are not subject to the going-private
transaction.

** The amount of the filing fee, calculated in accordance with Rule 0-11 of the
Securities Exchange Act of 1934, as amended, equals 1/50th of 1 percent of the
value of the transaction.

[X] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing with which the offsetting fee
was previously paid. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.

Amount Previously Paid: $96,658
Form or Registration No.: PREM 14A
Filing Party: Liberty Financial Companies, Inc.
CIK Code: 0000936372
File Number: 1-13654
Date Filed: July 17, 2001

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SECTION 13E-3 TRANSACTION STATEMENT

INTRODUCTION

This Rule 13e-3 Transaction Statement on Schedule 13E-3 is being filed
jointly by Liberty Financial Companies, Inc., a Massachusetts corporation, or
LFC, Liberty Mutual Insurance Company, a Massachusetts mutual insurance company
and LFC's controlling stockholder, or Liberty Mutual, and LFC Acquisition
Corporation, a Massachusetts corporation and wholly owned subsidiary of Liberty
Mutual, or Merger Sub, in connection with the Agreement and Plan of Merger,
dated as of June 4, 2001, or the merger agreement, by and among LFC, Liberty
Mutual and Merger Sub.

Subject to the satisfaction of certain conditions and the adoption
and approval of the merger agreement by LFC's stockholders, Merger Sub will
merge with and into LFC, with LFC as the surviving corporation, and each
holder of LFC's of common stock, par value $0.01 per share, other than LFC,
Liberty Mutual and its affiliates and stockholders who perfect their
appraisal rights under Massachusetts law, will be entitled to receive $33.44
in cash per share of LFC common stock, subject to adjustment, as described in
the Merger Agreement.

Concurrently with the filing of this Schedule 13E-3, LFC is filing with
the Securities and Exchange Commission a preliminary proxy statement, or the
proxy statement, pursuant to Regulation 14A of the Securities Exchange Act of
1934, as amended, or the Exchange Act, relating to the special meeting of
stockholders of LFC pursuant to which the LFC board of directors is soliciting
proxies from stockholders of LFC in connection with:

- the approval and adoption of the merger agreement;

- the authorization and approval of the sale of LFC's annuity and
intermediary retail distribution business pursuant to a Stock Purchase
Agreement, dated as of May 2, 2001, as amended, by and among LFC,
Liberty Financial Services, Inc., a Massachusetts corporation and
wholly owned subsidiary of LFC, or LFS, and Sun Life Assurance Company
of Canada, a Canadian insurance corporation, or Sun Life, pursuant to
which LFC has agreed to sell to Sun Life the direct and indirect
subsidiaries of LFC that constitute that business; and

- the authorization and approval of the sale of LFC's asset management
business pursuant to a Stock Purchase Agreement, dated as of June 4,
2001, by and among LFC, LFS, and Fleet National Bank, a national
banking association, or Fleet, pursuant to which LFC has agreed to
sell to Fleet the direct and indirect subsidiaries of LFC that
constitute that business.

A copy of the proxy statement is attached hereto as Exhibit (a)(3), and
a copy of the merger agreement is attached as Appendix C to the proxy statement.

In this Schedule 13E-3, all information concerning LFC has been
supplied by LFC, and all information concerning Liberty Mutual and Merger Sub
has been provided by Liberty Mutual. All references in this Schedule 13E-3 to
Items numbered 1001 through 1016 are references to Items contained in Regulation
M-A under the Exchange Act.

The cross reference sheet below is being supplied pursuant to the
General Instructions to Schedule 13E-3 and shows the location in the proxy
statement of the information required to be included in response to the items of
this Schedule 13E-3. The information set forth in the proxy statement, including
all schedules, appendixes and exhibits thereto, is hereby expressly incorporated
herein by reference and the responses to each item in this Schedule 13E-3 are
qualified in their entirety by the information contained in the proxy statement
and the appendixes thereto.

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ITEM 1. SUMMARY TERM SHEET.

REGULATION M-A
ITEM 1001

The information set forth in the proxy statement under the captions
"SUMMARY TERM SHEET" and "QUESTIONS AND ANSWERS ABOUT THE MEETING" is
incorporated herein by reference.

ITEM 2. SUBJECT COMPANY INFORMATION.

REGULATION M-A
ITEM 1002

(a) NAME AND ADDRESS. The information set forth in the proxy statement
under the caption "SUMMARY TERM SHEET" is incorporated herein by
reference.

(b) SECURITIES. The information set forth in the proxy statement under the
captions "INFORMATION ABOUT LFC--Security Ownership of Certain
Beneficial Owners and Management" and "INFORMATION CONCERNING THE
MEETING--Record Date, Quorum Requirement and Vote Required" is
incorporated herein by reference.

(c) TRADING MARKET AND PRICE. The information set forth in the proxy
statement under the caption "INFORMATION ABOUT LFC--Market Price of LFC
Common Stock and Dividends" is incorporated herein by reference.

(d) DIVIDENDS. The information set forth in the proxy statement under the
caption "INFORMATION ABOUT LFC--Market Price of LFC Common Stock and
Dividends" is incorporated herein by reference.

(e) PRIOR PUBLIC OFFERINGS. Not applicable.

(f) PRIOR STOCK PURCHASES. LFC's board of directors established an optional
dividend reinvestment plan, or DRIP, for holders of its capital stock.
Liberty Mutual participated in the DRIP from its inception until the
first quarter dividend for 2001 when it took its payment in cash. The
table below sets forth the price and number of shares of LFC common
stock acquired by Liberty Mutual pursuant to the DRIP at the conclusion
of each quarter during 1999 and 2000:

YEAR 2000

DATE DIVIDEND NO. OF SHARES ISSUED AVG. DAILY PRICE
DECLARED DATE PAYABLE TO LIBERTY MUTUAL UNDER DRIP ON DATE PAYABLE

First Quarter 02/11/00 03/10/00 174,249 $19.47
Second Quarter 05/10/00 06/09/00 152,820 $22.31
Third Quarter 08/10/00 09/06/00 141,243 $24.25
Fourth Quarter 11/09/00 12/06/00 82,496 $41.69
</Table>

YEAR 1999

DATE DIVIDEND NO. OF SHARES ISSUED AVG. DAILY PRICE
DECLARED DATE PAYABLE TO LIBERTY MUTUAL UNDER DRIP ON DATE PAYABLE

First Quarter 02/11/99 03/12/99 152,996 $21.81
Second Quarter 05/12/99 06/11/99 116,232 $28.84
Third Quarter 08/11/99 09/08/99 135,758 $24.78
Fourth Quarter 11/10/99 12/08/99 146,460 $23.06
</Table>

Liberty Mutual has not acquired any capital stock of LFC in
the last two years, other than pursuant to the DRIP.

ITEM 3. IDENTITY AND BACKGROUND OF THE FILING PERSONS.

REGULATION M-A
ITEM 1003(a) through (c)

(a), (b) NAME AND ADDRESS; BUSINESS AND BACKGROUND OF ENTITIES. The information
in the proxy statement under the caption "SUMMARY TERM SHEET" is
incorporated herein by reference.

LFC Acquisition Corporation, or Merger Sub, which was organized
in May, 2001, is a Massachusetts corporation. LFC Acquisition
Corporation was organized for the sole purpose of effecting the
merger and has not conducted business other than the transactions
described in the proxy statement attached as Exhibit (a)(3) hereto.
Liberty Mutual is the sole stockholder of LFC Acquisition
Corporation. LFC Acquisition Corporation's principal executive
offices are located at c/o Liberty Mutual Insurance Company, 175
Berkeley Street, Boston, Massachusetts 02117, and its telephone
number is (617 357-9500.

The address of each of the directors and officers of LFC is
c/o Liberty Financial Companies, Inc., 600 Atlantic Avenue, Boston,
Massachusetts 02210. All directors and officers of LFC are U.S.
citizens.

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None of LFC's officers and directors have been convicted in a
criminal proceeding or found in violation of securities laws in any
judicial or administrative proceeding during the past five years.

The address of each of the directors and officers of Liberty
Mutual is c/o Liberty Mutual Insurance Company, 175 Berkeley Street,
Boston, Massachusetts 02117. All directors and officers of Liberty
Mutual are U.S. citizens. None of Liberty Mutual's officers and
directors have been convicted in a criminal proceeding or found in
violation of securities laws in any judicial or administrative
proceeding during the past five years.

The address of each of the directors and officers of Merger
Sub is c/o Liberty Mutual Insurance Company, 175 Berkeley Street,
Boston, Massachusetts 02117. All directors and officers of Merger Sub
are U.S. citizens. None of Merger Sub's officers and directors have
been convicted in a criminal proceeding or found in violation of
securities laws in any judicial or administrative proceeding during the
past five years.

CHARLES I. CLOUGH Chairman and Chief Executive Officer, Clough
Director of LFC Capital Partners, LP since January, 2000;
Director of Liberty Mutual Chief Investment Strategist at Merrill Lynch
Company, Inc. from 1987 through 1999;
Chairman of the Board of Trustees of Boston
College; Director of Liberty Mutual and
Liberty Mutual Fire Insurance Company, an
affiliate of Liberty Mutual ("Liberty Fire").

EDMUND F. KELLY Chairman of the Board (since 2000) of LFC,
Director and Chairman President and Chief Executive Officer of
of the Board of LFC Liberty Mutual and Liberty Fire since April,
Director of Liberty Mutual 1998, President and Chief Operating Officer
President/Director of Merger Sub prior thereto; Director of Liberty Mutual and
certain of its affiliates, including Merger
Sub and Citizens Financial Group, Inc.

GLENN P. STREHLE Treasurer Emeritus and Advisor to the
Director of LFC Chairman and President of the Massachusetts
Director of Liberty Mutual Institute of Technology since January, 1999;
Treasurer of MIT (and Vice President from
1986 and Vice President for Finance from June
1994) from 1975 through 1998; Director of The
Otter Group, Inc., Liberty Mutual and
Liberty Fire.

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PAUL J. DARLING, II Chairman, President and Chief Executive
Director of LFC Officer of Corey Steel Company, a
Director of Liberty Mutual manufacturer of cold finished steel bars and
a metal service center, since 1984; Director
of Liberty Mutual, Liberty Fire and Unisource
Worldwide, Inc.

THOMAS J. MAY Chairman and Chief Executive Officer of NSTAR
Director of LFC since 1999; Chairman, President and Chief
Director of Liberty Mutual Executive Officer of Boston Edison Company
from 1994 to August 1999; Director of
FleetBoston Corporation, NSTAR, RCN
Corporation, New England Business Service,
Inc., Liberty Mutual and Liberty Fire.

DR. KENNETH L. ROSE President and Chief Executive Officer of
Director of LFC Henkels & McCoy, Inc., a privately held
Director of Liberty Mutual engineering and construction company;
Director of Liberty Mutual and Liberty Fire.

MICHAEL J. BABCOCK Private investor; President and Chief
Director of LFC Operating Officer of Leslie Fay Companies,
Director of Liberty Mutual Inc., an apparel manufacturer, from 1993 to
1995; Director of Liberty Mutual and Liberty
Fire, and HRDQ, Inc.

GARY L. COUNTRYMAN President and Chief Executive Officer of LFC
Director and Chief Executive since January 13, 2000; Chairman (from 1991
Officer of LFC until 2000) and Chief Executive Officer (from
Director of Liberty Mutual 1986 until April 1998) of Liberty Mutual,
Director of Liberty Mutual and Liberty Fire;
Director of FleetBoston Corporation, NSTAR
and Harcourt General, Inc.

JOHN P. HAMILL Chairman and Chief Executive Officer of
Director of LFC Sovereign Bank New England since January 10,
Director of Liberty Mutual 2000; President of Fleet Bank of
Massachusetts, N.A. from 1992 to December 31,
1999; Director of Liberty Mutual and Liberty
Fire.

MARIAN L. HEARD President and Chief Executive Officer of the
Director of LFC United Way of Massachusetts Bay and Chief
Director of Liberty Mutual Executive Officer of the United Way of New
England since 1992; Director of CVS
Corporation, FleetBoston Corporation, Liberty
Mutual and Liberty Fire and a Director or
Trustee of numerous national and local
non-profitorganizations.

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WILLIAM C. VAN FASSEN President and Chief Executive Officer of Blue
Director of Liberty Mutual Cross Blue Shield Massachusetts from March,
1992 through the present and Executive Vice
President and Chief Operating Officer from
June, 1990 through March, 1992; Director of
JMS Health, Inc., Tier Technologies and
Citizens Bank of Massachusetts; Director of
BankBoston from June, 1994 through October,
1999; Director of Liberty Mutual since
April, 2001.

PAUL G. CONDRIN III Senior Vice President and Chief Financial
Senior Vice President and Officer of Liberty Mutual from March, 1997
Chief Financial Officer of through the present; Director, Vice President
Liberty Mutual and Treasurer of Merger Sub since
Director, Vice President May, 2001; Senior Manager at KPMG Peat
and Treasurer of Merger Sub Marwick from July, 1983 through September,
1989.

GARY J. OSTROW Vice President and Director of Corporate
Director of Corporate Taxation Taxation at Liberty Mutual from 1999 through
and Vice President of the present; Vice President of Merger Sub
Liberty Mutual since May, 2001; Vice President - Taxes and
Vice-President of Merger Sub Tax Counsel at AmerUs Life Holdings, Inc.
from 1995 through 1998; and Director of Tax
Planning and Compliance at American Mutual
Life Ins. Co. from 1992 through 1995.

CHRISTOPHER C. MANSFIELD General Counsel of Liberty Mutual since 1985;
Senior Vice President and and Director of Merger Sub since May, 2001;
General Counsel of from 1975 until 1985, held a variety of other
Liberty Mutual positions at Liberty Mutual, including
Director of Merger Sub Senior Vice President and Senior Trial
Attorney.

DEXTER R. LEGG Secretary and Vice President of Liberty
Secretary and Vice President Mutual since December, 2000; Chief of Staff
of Liberty Mutual at Liberty Mutual from 1998 through 2000;
Vice President and Manager of Information
Processes at Liberty Mutual from 1995 through
1998; from 1970 through 1998, held a variety
of other positions at Liberty Mutual,
including Manager - Planning and Development
and Chief of Staff.

ELLIOT J. WILLIAMS Vice President and Treasurer of Liberty
Vice President and Treasurer Mutual from September 1996 to the present;
of Liberty Mutual Vice President of Liberty Mutual from 1986 to
August 1996; Assistant Treasurer of Liberty
Mutual from 1973 through 1986.

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ANTHONY A. FONTANES Senior Vice President and Chief Investment
Senior Vice President and Officer of Liberty Mutual from November, 1980
Chief Investment Officer of through the present; Community Development
Liberty Mutual Specialist of Liberty Mutual from April 1977
through September, 1980.

KEVIN M. CAROME Senior Vice President and General Counsel of
Senior Vice President and LFC since August 2000; General Counsel for
General Counsel of LFC Liberty Funds Group LLC, a wholly owned
subsidiary of LFC from August 1998 to July
2000; Vice President and Associate General
Counsel of LFC from August 1993 to August
1998.

LINDSAY COOK Executive Vice President of LFC since
Executive Vice President of LFC February 1997; Senior Vice President of LFC
from February 1994 to February 1997; Vice
President of LFC from March 1982 to February
1994.

FRANK A. FAGGIANO Senior Vice President of Human Resources of
Senior Vice President of LFC since August 1997; Vice President of
Human Resources of LFC Human Resources of LFC from July 1989 to
August 1997.

STEPHEN E. GIBSON President of Liberty Advisors, a unit of LFC
President of Liberty Advisors that includes Stein Roe and Colonial since
August 2000; held various other executive
positions in LFC's asset management business
since July 1996; Executive Vice President of
Liberty Funds Group from July 1996 to
January 1997; Managing Director of Marketing
at Putnam Investments from 1993 to July
1996; Executive Vice President of Putnam
Mutual Funds from 1992 to 1993.

J. ANDREW HILBERT Senior Vice President and Chief Financial
Senior Vice President and Officer of LFC since March 1997; Treasurer of
Chief Financial Officer of LFC LFC from March 1998 to May 2000; Senior Vice
President and Chief Financial Officer of
Paul Revere Corporation from October 1995 to
March 1998; Partner at Price Waterhouse from
1981 to 1995.

C. ALLEN MERRITT, JR. Chief of Staff of LFC since August 2000;
Executive Vice President and Executive Vice President of LFC since
Chief of Staff of LFC February 1997; Chief Operating Officer of
LFC from March 1998 to August 2000; Senior
Vice President of LFC from 1987 to February
1997.

PORTER P. MORGAN Senior Vice President of Marketing of LFC
Senior Vice President of since 1991.
Marketing of LFC

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PHILIP POLKINGHORN President of Keyport Life Insurance Company
President of Keyport Life since May 1999; Senior Vice President and
Insurance Company Chief Marketing Officer of American General
Life Insurance Company from December 1996 to
April 1999; Vice President Products of First
Colony Life Insurance Company from March to
December 1996; Chief Financial Officer
Insurance Division of Connecticut Mutual
Insurance Services from March 1995 to March
1996; Chief Marketing Officer of Allmerica
Insurance Company from March 1993 to March
1994.

ITEM 4. TERMS OF THE TRANSACTION.

REGULATION M-A
ITEM 1004(a) and (c) through (f)

(a)(1) TENDER OFFERS. Not applicable.

(a)(2)(i) TRANSACTION DESCRIPTION. The information set forth in the
proxy statement under the captions "SUMMARY TERM SHEET,"
"QUESTIONS AND ANSWERS ABOUT THE MEETING," "INFORMATION
CONCERNING THE MEETING--Purpose of the Meeting," "SUN LIFE
TRANSACTION--AGREEMENTS--The Sun Life Purchase Agreement,"
"FLEET TRANSACTION--AGREEMENTS--The Fleet Purchase Agreement,"
"THE GOING PRIVATE TRANSACTION--THE MERGER AGREEMENT," and
"THE TRANSACTIONS--SPECIAL FACTORS--Background of the
Transactions" is incorporated herein by reference.

(a)(2)(ii) CONSIDERATION. The information set forth in the proxy
statement under the captions "SUMMARY TERM SHEET," "QUESTIONS
AND ANSWERS ABOUT THE MEETING," "INFORMATION CONCERNING THE
MEETING--Purpose of the Meeting," and "THE GOING PRIVATE
TRANSACTION--THE MERGER AGREEMENT" is incorporated herein by
reference.

(a)(2)(iii) REASONS FOR TRANSACTION. The information set forth in the
proxy statement under the captions "SUMMARY TERM SHEET,"
"QUESTIONS AND ANSWERS ABOUT THE MEETING," "THE
TRANSACTIONS--SPECIAL FACTORS--Background of the
Transactions," "THE TRANSACTIONS--SPECIAL
FACTORS--Recommendation of the Board of Directors," "THE
TRANSACTIONS--SPECIAL FACTORS-- LFC's Purpose of and
Reasons for the Merger," "THE TRANSACTIONS--SPECIAL
FACTORS--Liberty Mutual's Purpose of and Reasons for the
Merger" and "THE TRANSACTIONS--SPECIAL FACTORS--Position
of Liberty Mutual as to Fairness of the Transactions" is
incorporated herein by reference.

(a)(2)(iv) VOTE REQUIRED FOR APPROVAL. The information set forth in the
proxy statement under the captions "SUMMARY TERM SHEET,"
"QUESTIONS AND ANSWERS ABOUT THE MEETING," "INFORMATION
CONCERNING THE MEETING--Record Date, Quorum Requirement and
Vote Required," and "THE GOING PRIVATE TRANSACTION--THE MERGER
AGREEMENT" is incorporated herein by reference.

(a)(2)(v) DIFFERENCES IN THE RIGHTS OF SECURITY HOLDERS. The information
set forth in the proxy statement under the captions "SUMMARY
TERM SHEET," "QUESTIONS AND ANSWERS ABOUT THE MEETING," "THE
TRANSACTIONS--SPECIAL FACTORS--Consequences of the
Transactions," "THE TRANSACTIONS--SPECIAL FACTORS--Interests
of Certain Persons in the Transactions and Potential Conflicts
of Interest," "THE TRANSACTIONS--SPECIAL FACTORS--U.S. Federal
Income Tax Consequences," "THE GOING PRIVATE TRANSACTION--THE
MERGER AGREEMENT" and "CERTAIN RELATIONSHIPS AND RELATED PARTY
TRANSACTIONS--MATTERS PERTAINING TO LIBERTY MUTUAL" is
incorporated herein by reference.

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(a)(2)(vi) ACCOUNTING TREATMENT. The information set forth in the proxy
statement under the caption "THE TRANSACTIONS--SPECIAL
FACTORS--Accounting Treatment" is incorporated herein by
reference.

(a)(2)(vii) INCOME TAX CONSEQUENCES. The information set forth in the
proxy statement under the captions "SUMMARY TERM SHEET,"
"QUESTIONS AND ANSWERS ABOUT THE MEETING," and "THE
TRANSACTIONS--SPECIAL FACTORS--U.S. Federal Income Tax
Consequences" is incorporated herein by reference.

(c) DIFFERENT TERMS. The information set forth in the proxy
statement under the captions "SUMMARY TERM SHEET," "QUESTIONS
AND ANSWERS ABOUT THE MEETING," "THE TRANSACTIONS--SPECIAL
FACTORS--Consequences of the Transactions," "THE
TRANSACTIONS--SPECIAL FACTORS--Interests of Certain Persons in
the Transactions and Potential Conflicts of Interest" and "THE
GOING PRIVATE TRANSACTION--THE MERGER AGREEMENT" is
incorporated herein by reference.

(d) APPRAISAL RIGHTS. The information set forth in the proxy
statement under the captions "SUMMARY TERM SHEET," "QUESTIONS
AND ANSWERS ABOUT THE MEETING," "INFORMATION CONCERNING THE
MEETING--Appraisal Rights," "APPRAISAL RIGHTS" and in Appendix
E to the proxy statement is incorporated herein by reference.

(e) PROVISIONS FOR UNAFFILIATED SECURITY HOLDERS. LFC, Liberty
Mutual and Merger Sub have made no provisions in connection
with the transaction to grant unaffiliated security holders
access to corporate files of LFC, Liberty Mutual or Merger Sub
or to obtain counsel or appraisal services at the expense of
LFC, Liberty Mutual or Merger Sub.

(f) ELIGIBILITY FOR LISTING OR TRADING. Not applicable.

ITEM 5. PAST CONTACTS, TRANSACTIONS, NEGOTIATIONS AND AGREEMENTS.

REGULATION M-A
ITEM 1005(a) through (c) and (e)

(a) TRANSACTIONS. The information set forth in the proxy statement under
the captions "CERTAIN RELATIONSHIP AND RELATED TRANSACTIONS--MATTERS
PERTAINING TO LIBERTY MUTUAL" and "THE TRANSACTIONS--SPECIAL
FACTORS--Interests of Certain Persons in the Transactions and Potential
Conflicts of Interest" is incorporated herein by reference.

(b),(c) SIGNIFICANT CORPORATE EVENTS; NEGOTIATIONS OR CONTACTS. The information
set forth in the proxy statement under the captions "INFORMATION ABOUT
LFC--Security Ownership of Certain Beneficial Owners and Management,"
"INFORMATION ABOUT LFC--Retention Plans," and "THE
TRANSACTIONS--SPECIAL FACTORS--Background of the Transactions" is
incorporated herein by reference.

(e) AGREEMENTS INVOLVING THE SUBJECT COMPANY'S SECURITIES. The information
set forth in the proxy statement under the captions "SUMMARY TERM
SHEET," "INFORMATION ABOUT LFC--Security Ownership of Certain
Beneficial Owners and Management," "INFORMATION ABOUT LFC--Retention
Plans," "SUN LIFE TRANSACTION--AGREEMENTS--The Sun Life Voting
Agreement," "FLEET TRANSACTION--AGREEMENTS--The Fleet Voting Agreement"
and "THE GOING PRIVATE TRANSACTION--THE MERGER AGREEMENT" is
incorporated herein by reference.

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ITEM 6. PURPOSES OF THE TRANSACTION AND PLANS OR PROPOSALS.

REGULATION M-A
ITEM 1006(b) and (c)(1) through (8)

(b) USE OF SECURITIES ACQUIRED. The information set forth in the proxy
statement under the captions "SUMMARY TERM SHEET," "THE
TRANSACTIONS--SPECIAL FACTORS--Consequences of the Transactions" and
"THE GOING PRIVATE TRANSACTION--THE MERGER AGREEMENT" is incorporated
herein by reference.

(c) PLANS. The information set forth in the proxy statement under the
captions "SUMMARY TERM SHEET," "THE TRANSACTIONS--SPECIAL
FACTORS--Consequences of the Transactions," "THE GOING PRIVATE
TRANSACTION--THE MERGER AGREEMENT" and in Appendix C to the proxy
statement is incorporated herein by reference.

ITEM 7. PURPOSES, ALTERNATIVES, REASONS AND EFFECTS.

REGULATION M-A
ITEM 1013

(a),(c) PURPOSES; REASONS. The information set forth in the proxy statement
under the captions "SUMMARY TERM SHEET," "THE TRANSACTIONS--SPECIAL
FACTORS--Background of the Transactions," "THE TRANSACTIONS--SPECIAL
FACTORS--Recommendations of the Board of Directors" and "THE
TRANSACTIONS--SPECIAL FACTORS--Position of Liberty Mutual as to
Fairness of the Transactions" is incorporated herein by reference.

(b) ALTERNATIVES. The information set forth in the proxy statement under
the captions "THE TRANSACTIONS--SPECIAL FACTORS--Background of the
Transactions," "THE TRANSACTIONS--SPECIAL FACTORS--Recommendations of
the Board of Directors" and "THE TRANSACTIONS--SPECIAL
FACTORS--Opinions of the Financial Advisor" is incorporated herein by
reference.

(d) EFFECTS. The information set forth in the proxy statement under the
captions "SUMMARY TERM SHEET," "THE TRANSACTIONS--SPECIAL
FACTORS--Consequences of the Transactions," "THE TRANSACTIONS--SPECIAL
FACTORS--U.S. Federal Income Tax Consequences" and "THE GOING PRIVATE
TRANSACTION--THE MERGER AGREEMENT" is incorporated herein by reference.

ITEM 8. FAIRNESS OF THE TRANSACTION.

REGULATION M-A
ITEM 1014

(a),(b) FAIRNESS; FACTORS CONSIDERED IN DETERMINING FAIRNESS. The information
set forth in the proxy statement under the captions "SUMMARY TERM
SHEET," "THE TRANSACTIONS--SPECIAL FACTORS--Background of the
Transactions," "THE TRANSACTIONS--SPECIAL FACTORS--Recommendations of
the Board of Directors," "THE TRANSACTIONS--SPECIAL FACTORS--Opinions
of the Financial Advisor," and the Opinions of Credit Suisse First
Boston Corporation attached as Appendixes D-1, D-2 and D-3,
respectively, to the proxy statement is incorporated herein by
reference.

(c) APPROVAL OF SECURITY HOLDERS. As structured, the transaction under the
merger agreement and the other transactions described in the proxy
statement do not require approval of at least a majority of the
unaffiliated security holders of LFC. The information set forth in the
proxy statement under the captions "SUMMARY TERM SHEET," "QUESTIONS AND
ANSWERS ABOUT THE MEETING," "INFORMATION CONCERNING THE
MEETING--Purpose of the Meeting," "THE TRANSACTIONS--SPECIAL
FACTORS--Recommendation of the Board of Directors," "THE GOING

<Page>

PRIVATE TRANSACTION--THE MERGER AGREEMENT" is incorporated herein
by reference.

(d) UNAFFILIATED REPRESENTATIVE. The non-employee directors of LFC did not
retain an unaffiliated representative to act solely on behalf of
unaffiliated security holders for purposes of negotiating the terms of
the merger agreement or the other transactions described in the proxy
statement or for the purpose of preparing a report concerning the
fairness of such transactions. The information set forth in the proxy
statement under the captions "SUMMARY TERM SHEET," "QUESTIONS AND
ANSWERS ABOUT THE MEETING," "THE TRANSACTIONS--SPECIAL
FACTORS--Background of the Transactions" and "THE TRANSACTIONS--SPECIAL
FACTORS--Interests of Certain Persons in the Transactions and Potential
Conflicts of Interest" is incorporated herein by reference.

(e) APPROVAL OF DIRECTORS. The information set forth in the proxy statement
under the captions "SUMMARY TERM SHEET," "THE TRANSACTIONS--SPECIAL
FACTORS--Background of the Transactions" and "THE TRANSACTIONS--SPECIAL
FACTORS--Recommendations of the Board of Directors" is incorporated
herein by reference.

(f) OTHER OFFERS. None.

ITEM 9. REPORTS, OPINIONS, APPRAISALS AND NEGOTIATIONS.

REGULATION M-A
ITEM 1015

(a)-(c) REPORT, OPINION, OR APPRAISAL; PREPARER AND SUMMARY OF THE REPORT,
OPINION, OR APPRAISAL; AVAILABILITY OF DOCUMENTS. The information
set forth in the proxy statement under the captions "SUMMARY TERM
SHEET," "THE TRANSACTIONS--SPECIAL FACTORS--Opinions of the
Financial Advisor" and "THE TRANSACTIONS--SPECIAL
FACTORS--Recommendations of the Board of Directors" and the Opinions
of Credit Suisse First Boston Corporation attached as Appendixes
D-1, D-2 and D-3, respectively, to the proxy statement is
incorporated herein by reference.

ITEM 10. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.

REGULATION M-A
ITEM 1007

(a),(b) SOURCE OF FUNDS; CONDITIONS. The information set forth in the proxy
statement under the captions "SUMMARY TERM SHEET" and "THE
TRANSACTIONS--SPECIAL FACTORS--Financing; Source of Funds" is
incorporated herein by reference.

(c) EXPENSES. The information set forth in the proxy statement under the
captions "SUMMARY TERM SHEET," "THE TRANSACTIONS--SPECIAL
FACTORS--Fees and Expenses," "SUN LIFE TRANSACTION--AGREEMENTS--The
Sun Life Purchase Agreement," "FLEET TRANSACTION--AGREEMENTS--The
Fleet Purchase Agreement" and "THE GOING PRIVATE TRANSACTION--THE
MERGER AGREEMENT" is incorporated herein by reference.

(d) BORROWED FUNDS. Not applicable.

<Page>

ITEM 11. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.

REGULATION M-A
ITEM 1008

(a) SECURITIES OWNERSHIP. The information set forth in the proxy statement
under the caption "INFORMATION ABOUT LFC--Security Ownership of Certain
Beneficial Owners and Management" is incorporated herein by reference.

(b) SECURITIES TRANSACTIONS. Not applicable.

ITEM 12. THE SOLICITATION OR RECOMMENDATION.

REGULATION M-A
ITEM 1012(d) and (e)

(d) INTENT TO TENDER OR VOTE IN A GOING--PRIVATE TRANSACTION. The
information set forth in the proxy statement under the captions
"SUMMARY TERM SHEET," "QUESTIONS AND ANSWERS ABOUT THE MEETING,"
"INFORMATION CONCERNING THE MEETING--Purpose of the Meeting," "THE
TRANSACTIONS--SPECIAL FACTORS--Interests of Certain Persons in the
Transactions and Potential Conflicts of Interest," "THE
TRANSACTIONS--SPECIAL FACTORS--Position of Liberty Mutual as to
Fairness of the Transactions," "SUN LIFE TRANSACTION--AGREEMENTS--The
Sun Life Voting Agreement" and "FLEET TRANSACTION--AGREEMENTS--The
Fleet Voting Agreement" is incorporated herein by reference.

(e) RECOMMENDATIONS OF OTHERS. The information set forth in the proxy
statement under the captions "SUMMARY TERM SHEET," "QUESTIONS AND
ANSWERS ABOUT THE MEETING," "INFORMATION CONCERNING THE
MEETING--Purpose of the Meeting," "THE TRANSACTIONS--SPECIAL
FACTORS--Recommendations of the Board of Directors" and "THE
TRANSACTIONS--SPECIAL FACTORS--Position of Liberty Mutual as to
Fairness of the Transactions" is incorporated herein by reference.

ITEM 13. FINANCIAL STATEMENTS.

REGULATION M-A
ITEM 1010(a) through (b)

(a) FINANCIAL INFORMATION. The information set forth in the proxy statement
under the caption "ADDITIONAL INFORMATION" and in Item 8, "Financial
Statements and Supplementary Date," of LFC's most recent Annual Report
on Form 10-K/A and in Item 1, "Financial Statements," of LFC's most
recent Quarterly Report on Form 10-Q, is incorporated herein by
reference.

(b) PRO FORMA INFORMATION. The information set forth in the proxy statement
under the caption "INFORMATION ABOUT LFC--Unaudited Pro Forma Financial
Information" is incorporated herein by reference.

ITEM 14. PERSONS/ASSETS, RETAINED, EMPLOYED, COMPENSATED OR USED.

REGULATION M-A
ITEM 1009

(a),(b) SOLICITATIONS OR RECOMMENDATIONS; EMPLOYEES AND CORPORATE ASSETS. The
information set forth in the proxy statement under the captions
"SUMMARY TERM SHEET," "QUESTIONS AND ANSWERS ABOUT THE MEETING,"
"INFORMATION CONCERNING THE

<Page>

MEETING-- Solicitation, Revocation and Use of Proxies," "THE
TRANSACTIONS --SPECIAL FACTORS--Opinions of the Financial Advisor" and
"THE TRANSACTIONS--SPECIAL FACTORS--Fees and Expenses" is incorporated
herein by reference.

ITEM 15. ADDITIONAL INFORMATION.

REGULATION M-A
ITEM 1011(b)

(b) OTHER MATERIAL INFORMATION. The entirety of the proxy statement is
incorporated herein by reference.

ITEM 16. EXHIBITS.

REGULATION M-A
ITEM 1016(a) through (d), (f) and (g)

(a)(1) Letter to stockholders (included in the proxy statement, which
is filed herewith as Exhibit (a)(3)).

(a)(2) Notice of Special Meeting of Stockholders (included in the
proxy statement, which is filed herewith as Exhibit (a)(3)).

(a)(3) Proxy statement, including all appendixes hereto.

(c)(1) Opinions of Credit Suisse First Boston Corporation (included
in the proxy statement, which is filed herewith as Exhibit
(a)(3)).

(c)(2) Materials prepared by Credit Suisse First Boston Corporation
presented to the board of directors of LFC on May 2, 2001.

(c)(3) Materials prepared by Credit Suisse First Boston Corporation
presented to the board of directors of LFC on June 4, 2001.

(d)(1) Sun Life voting agreement (included in the proxy statement,
which is filed herewith as Exhibit (a)(3)).

(d)(2) Fleet voting agreement (included in the proxy statement, which
is filed herewith as Exhibit (a)(3)).

<Page>

SIGNATURES

After due inquiry and to the best of my knowledge and belief, each of
the undersigned does certify that the information set forth in this statement is
true, complete and correct.

Dated: August 30, 2001

LIBERTY FINANCIAL COMPANIES, INC.

By: /S/ Kevin M. Carome
-----------------------------------------
Kevin M. Carome
Senior Vice President and General Counsel

LFC ACQUISITION CORPORATION

By: /S/ Gary J. Ostrow
-----------------------------------------
Gary J. Ostrow
Vice President

LIBERTY MUTUAL INSURANCE COMPANY

By: /S/ Christopher C. Mansfield
-----------------------------------------
Christopher C. Mansfield
Senior Vice President and General Counsel