<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-Q FOR
THE QUARTER ENDED MARCH 31, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
       
                             
<PERIOD-TYPE>                   3-MOS
<FISCAL-YEAR-END>                          DEC-31-1996
<PERIOD-END>                               MAR-31-1996
<DEBT-HELD-FOR-SALE>                         2,627,945
<DEBT-CARRYING-VALUE>                                0
<DEBT-MARKET-VALUE>                                  0
<EQUITIES>                                      32,360
<MORTGAGE>                                      42,933
<REAL-ESTATE>                                        0
<TOTAL-INVEST>                               2,822,737
<CASH>                                         176,884
<RECOVER-REINSURE>                                   0
<DEFERRED-ACQUISITION>                          45,930
<TOTAL-ASSETS>                               4,084,022
<POLICY-LOSSES>                              2,901,572
<UNEARNED-PREMIUMS>                                  0
<POLICY-OTHER>                                       0
<POLICY-HOLDER-FUNDS>                                0
<NOTES-PAYABLE>                                 40,000
<COMMON>                                             0
<PREFERRED-MANDATORY>                                0
<PREFERRED>                                     50,000
<OTHER-SE>                                     103,976
<TOTAL-LIABILITY-AND-EQUITY>                 4,084,022
<PREMIUMS>                                           0
<INVESTMENT-INCOME>                             55,193
<INVESTMENT-GAINS>                               (403)
<OTHER-INCOME>                                   4,162
<BENEFITS>                                      41,115
<UNDERWRITING-AMORTIZATION>                      1,687
<UNDERWRITING-OTHER>                             8,010
<INCOME-PRETAX>                                  6,058
<INCOME-TAX>                                     1,573
<INCOME-CONTINUING>                              4,485
<DISCONTINUED>                                       0
<EXTRAORDINARY>                                      0
<CHANGES>                                            0
<NET-INCOME>                                     4,485
<EPS-PRIMARY>                                   133.09
<EPS-DILUTED>                                   133.09
<RESERVE-OPEN>                                       0
<PROVISION-CURRENT>                                  0
<PROVISION-PRIOR>                                    0
<PAYMENTS-CURRENT>                                   0
<PAYMENTS-PRIOR>                                     0
<RESERVE-CLOSE>                                      0
<CUMULATIVE-DEFICIENCY>                              0