<ARTICLE> 7
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE
SHEET AND STATEMENT OF OPERATIONS OF ARM FINANCIAL GROUP, INC.'S FORM 10-K FOR
THE YEAR ENDED DECEMBER 31, 1996 AND IS QUALIFIED IN TIS ENTIRETY BY REFERENCE
TO SUCH STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
       
                             
<PERIOD-TYPE>                   YEAR
<FISCAL-YEAR-END>                          DEC-31-1996
<PERIOD-START>                             JAN-01-1996
<PERIOD-END>                               DEC-31-1996
<DEBT-HELD-FOR-SALE>                         3,054,513
<DEBT-CARRYING-VALUE>                                0
<DEBT-MARKET-VALUE>                                  0
<EQUITIES>                                      22,552
<MORTGAGE>                                      36,879
<REAL-ESTATE>                                        0
<TOTAL-INVEST>                               3,237,410
<CASH>                                         110,067
<RECOVER-REINSURE>                                   0
<DEFERRED-ACQUISITION>                          59,001
<TOTAL-ASSETS>                               4,701,664
<POLICY-LOSSES>                              3,294,174
<UNEARNED-PREMIUMS>                                  0
<POLICY-OTHER>                                       0
<POLICY-HOLDER-FUNDS>                                0
<NOTES-PAYABLE>                                 40,000
<PREFERRED-MANDATORY>                                0
<PREFERRED>                                     50,000
<COMMON>                                             0
<OTHER-SE>                                     131,942
<TOTAL-LIABILITY-AND-EQUITY>                 4,701,664
<PREMIUMS>                                           0
<INVESTMENT-INCOME>                            250,031
<INVESTMENT-GAINS>                                 907
<OTHER-INCOME>                                  17,833
<BENEFITS>                                     182,161
<UNDERWRITING-AMORTIZATION>                      6,835
<UNDERWRITING-OTHER>                            33,427
<INCOME-PRETAX>                                 28,545
<INCOME-TAX>                                     5,167
<INCOME-CONTINUING>                             23,378
<DISCONTINUED>                                       0
<EXTRAORDINARY>                                      0
<CHANGES>                                            0
<NET-INCOME>                                    23,378
<EPS-PRIMARY>                                   751.58
<EPS-DILUTED>                                   751.58
<RESERVE-OPEN>                                       0
<PROVISION-CURRENT>                                  0
<PROVISION-PRIOR>                                    0
<PAYMENTS-CURRENT>                                   0
<PAYMENTS-PRIOR>                                     0
<RESERVE-CLOSE>                                      0
<CUMULATIVE-DEFICIENCY>                              0