<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 NINE MONTHS ENDED SEPTEMBER 30, 1996 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER>   1,000
       
                             
<PERIOD-TYPE>                   9-MOS
<FISCAL-YEAR-END>                        DEC-31-1996
<PERIOD-START>                           JAN-01-1996   
<PERIOD-END>                             SEP-30-1996  
<DEBT-HELD-FOR-SALE>                       2,991,885
<DEBT-CARRYING-VALUE>                              0
<DEBT-MARKET-VALUE>                                0
<EQUITIES>                                    31,883
<MORTGAGE>                                    37,159
<REAL-ESTATE>                                      0
<TOTAL-INVEST>                             3,181,694
<CASH>                                        49,808
<RECOVER-REINSURE>                                 0
<DEFERRED-ACQUISITION>                        54,231
<TOTAL-ASSETS>                             4,458,601  
<POLICY-LOSSES>                            3,209,729
<UNEARNED-PREMIUMS>                                0
<POLICY-OTHER>                                     0
<POLICY-HOLDER-FUNDS>                              0
<NOTES-PAYABLE>                               40,000
<COMMON>                                           0
<PREFERRED-MANDATORY>                              0
<PREFERRED>                                   50,000
<OTHER-SE>                                   106,144
<TOTAL-LIABILITY-AND-EQUITY>               4,458,601
<PREMIUMS>                                         0
<INVESTMENT-INCOME>                          183,203
<INVESTMENT-GAINS>                           (2,332)
<OTHER-INCOME>                                17,239
<BENEFITS>                                   133,349
<UNDERWRITING-AMORTIZATION>                    4,599
<UNDERWRITING-OTHER>                          26,353
<INCOME-PRETAX>                               18,531
<INCOME-TAX>                                   3,719
<INCOME-CONTINUING>                           14,812
<DISCONTINUED>                                     0
<EXTRAORDINARY>                                    0
<CHANGES>                                          0
<NET-INCOME>                                  14,812
<EPS-PRIMARY>                                 453.94
<EPS-DILUTED>                                 453.94
<RESERVE-OPEN>                                     0
<PROVISION-CURRENT>                                0
<PROVISION-PRIOR>                                  0
<PAYMENTS-CURRENT>                                 0
<PAYMENTS-PRIOR>                                   0
<RESERVE-CLOSE>                                    0
<CUMULATIVE-DEFICIENCY>                            0