UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                 ---------------
                                    FORM 10-K
                                 ---------------

             [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                   For the fiscal year ended December 31, 2001

                                       OR

          [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                For the transition period from ________to________

                                 ---------------
                         Commission file number 0-27394
                                 ---------------

                     GE Global Insurance Holding Corporation
             (Exact name of registrant as specified in its charter)

            Delaware                                        95-3435367
  (State or other jurisdiction of                        (I.R.S. Employer
   incorporation or organization)                       Identification No.)

  5200 Metcalf, Overland Park, Kansas      66202          (913) 676-5200
(Address of principal executive offices) (Zip Code)   Registrant's telephone
                                                    number, including area code)

                                 ---------------
                         SECURITIES REGISTERED PURSUANT
                          TO SECTION 12(b) OF THE ACT:

                                                         Name of each
       Title of each class                       exchange on which registered
       -------------------                       ----------------------------

  7% Notes Due February 15, 2026                    New York Stock Exchange
  6.45% Notes Due March 1, 2019                     New York Stock Exchange
  7.5% Notes Due June 15, 2010                      New York Stock Exchange
  7.75% Notes Due June 15, 2030                     New York Stock Exchange


                         SECURITIES REGISTERED PURSUANT
                          TO SECTION 12(g) OF THE ACT:

                               Title of each class
                               -------------------
                    Common Stock, par value $5,000 per share

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No[ ]

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best  of  the  registrant's   knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  in Part  III of this  Form  10-K or any
amendment to this Form 10-K. [X]

Aggregate  market  value  of the  voting  stock  held  by  nonaffiliates  of the
registrant at March 8, 2002. None.

At March 8, 2002,  1,000  shares of common  stock with a par value of $5,000 per
share were outstanding.

REGISTRANT MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTION I(1)(a) AND (b)
OF FORM 10-K AND IS THEREFORE FILING THIS FORM 10-K WITH THE REDUCED  DISCLOSURE
FORMAT.


<PAGE>
<TABLE>
<CAPTION>





                                                      TABLE OF CONTENTS

                                                                                                               Page
                                                                                                               ----
<S>                                                                                                             <C>
PART I
   Item 1.    Business...........................................................................................1
   Item 2.    Properties........................................................................................12
   Item 3.    Legal Proceedings.................................................................................13
   Item 4.    Submission of Matters to a Vote of Security Holders...............................................13


PART II
   Item 5.    Market for the Registrant's Common Equity and Related Stockholder Matters.........................13
   Item 6.    Selected Financial Data...........................................................................13
   Item 7.    Management's Discussion and Analysis of Financial Condition
                  and Results of Operations.....................................................................14
   Item 7A.   Quantitative and Qualitative Disclosures About Market Risk........................................24
   Item 8.    Financial Statements and Supplementary Data.......................................................24
   Item 9.    Changes in and Disagreements with Accountants on Accounting
                  and Financial Disclosure......................................................................24


PART III
   Item 10.   Directors and Executive Officers of the Registrant................................................24
   Item 11.   Executive Compensation............................................................................24
   Item 12.   Security Ownership of Certain Beneficial Owners and Management....................................24
   Item 13.   Certain Relationships and Related Transactions....................................................24


PART IV
   Item 14.   Exhibits, Financial Statement Schedules and Reports on Form 8-K...................................25

</TABLE>
<PAGE>


                                     PART I

Item 1.  Business.

GE Global Insurance  Holding  Corporation ("GE Global  Insurance" and,  together
with  its  subsidiaries,   "the  Company"),  through  its  direct  and  indirect
subsidiaries,  is principally engaged in the reinsurance  business in the United
States and  throughout  the world.  All  outstanding  common  stock of GE Global
Insurance  is owned by General  Electric  Capital  Services,  Inc.  ("GE Capital
Services"),  which in turn is  wholly-owned  by General  Electric  Company  ("GE
Company").

The  principal  executive  offices of GE Global  Insurance  are  located at 5200
Metcalf, Overland Park, Kansas 66202 (Telephone number (913) 676-5200).

Overview of the Reinsurance Industry

Reinsurance  is a form of insurance in which a reinsurer  indemnifies  a primary
insurer  against  part or all of the  liability  assumed by the primary  insurer
under one or more insurance policies.  Reinsurance may provide a primary insurer
with several major benefits:  a reduction in net liability of individual  risks,
protection  against  catastrophic  losses,  reduction of financial  leverage and
stabilization  of  operating  results.  Reinsurance  may also  provide a primary
insurer the  ability to  increase  its  underwriting  capacity  by allowing  the
primary  insurer to accept  larger risks and to more rapidly  expand its book of
business.

The global reinsurance industry is operating in an unprecedented  environment in
the aftermath of the events of September 11. After years of the effect of excess
market  capacity,  the global market finds itself in a capacity  crunch and with
many market  participants  declining to write coverage that includes  terrorism.
The challenges associated with quantifying terrorism risk today are significant.
Primary insurers continue to consider alternatives to traditional risk transfer,
including insurance  captives,  structured  securities and derivative  products.
Global  reinsurers are offering ways to meet the demands of this changing global
market  by  expanding  their  markets,  entering  into new  reinsurance  niches,
offering new reinsurance products and spreading their risks geographically. This
changing reinsurance environment may affect the industry's profitability,  which
has historically been influenced by the insurance industry's underwriting cycle,
changes in interest rates and catastrophic events.

General

GE Global Insurance is one of the largest  reinsurance groups in the world, with
subsidiaries  providing risk management  solutions for well over a century.  The
Company writes substantially all types of property and casualty,  healthcare and
life  reinsurance  and some lines of primary  health,  property and casualty and
excess workers' compensation insurance.

The Company  conducts  business and  services its accounts  through a network of
local offices located in cities throughout the world.

As one of the largest direct  writers of  reinsurance in the world,  the Company
works directly with its clients which enhances the Company's ability to evaluate
its  clients  and their  respective  risks and  allows  the  Company  to be more
responsive to the individual  needs of its customers.  The Company  utilizes its
network of local offices throughout the world to service the particular needs of
its  reinsurance  clients.  This  system  enables the Company to provide a wider
range of services targeted at the needs of a particular market.

The Company also competes in the reinsurance broker market throughout the world.
In  early  1999,  the  Company  significantly   expanded  its  presence  in  the
reinsurance  broker market by acquiring Eagle Star  Reinsurance  Company Limited
("Eagle Star Re"). The acquisition of Eagle Star Re  significantly  enhanced the
Company's  distribution  channel in the worldwide  reinsurance broker market and
further enables the Company to respond to the growing risk management needs of a
wider and more diverse  group of  customers.  The  acquisition  of Eagle Star Re
positions the Company as one of the largest  reinsurance  broker  writers in the
world.

                                        1


<PAGE>
The Company manages and diversifies its risk through the careful underwriting of
risks,  active claims  management and the purchase of  retrocessional  coverage,
including  aggregate  covers  on  portions  of  risk.   Retrocessional  coverage
represents a form of secondary  reinsurance  where a reinsurer seeks reinsurance
coverage on a specified  portion of assumed risks. The Company  maintains strict
underwriting  controls  whereby  individual  underwriters  are assigned  maximum
levels of  underwriting  authority  based on specified  lines of  business.  The
assumption of risks greater than the specified maximum amount requires approvals
of  designated  individuals.  Adherence  to  these  underwriting  guidelines  is
monitored through pre-renewal account reviews,  periodic underwriting audits and
computer  edit  controls.  In addition to  transactional  controls,  the Company
employs  portfolio  monitoring  of key risks for all  products  and controls new
product   introductions   through  the  use  of  required   management   reviews
("tollgates") to approve such new products and related underwriting guidelines.

The  Company's  business  strategy  is  to  continue  to  increase  revenues  by
concentrating   on  select   profitable   customer   segments   and   delivering
comprehensive risk transfer and risk management solutions.  The Company does not
intend,  however,  to increase premium income at the expense of its underwriting
results.

On March 4,  1999,  the  Company  completed  the  acquisition  of Eagle  Star Re
(subsequently  merged with GE Frankona  Reinsurance  Limited,  an affiliate),  a
leading London Market non-life  reinsurance  company  principally doing business
through  intermediaries.  This acquisition  significantly enhanced the Company's
worldwide  reinsurance broker  distribution  channel.  The cash consideration of
approximately $346 million was provided through existing funds.

Unless otherwise  indicated,  all financial data has been prepared in accordance
with accounting  principles  generally  accepted in the United States of America
("GAAP").

                                        2


<PAGE>
Lines of Business

The   Company's   two   business   segments   are  (1)   property  and  casualty
insurance/reinsurance and (2) life reinsurance.  The Company's principal product
lines under the  property  and  casualty  segment are  traditional  property and
casualty reinsurance, healthcare reinsurance and commercial insurance (generally
primary property and casualty  insurance) and its principal  product lines under
the life  reinsurance  segment are  traditional  life  reinsurance and financial
reinsurance.  The Company also provides primary insurance products to hospitals,
health  maintenance  organizations  and  medical  professionals  as  part of its
healthcare  product  line  and to  niche  customers  as part  of its  commercial
insurance product line.

Unless  otherwise  indicated,  the Company's  domestic  results include business
written in the United States  (including  business  written in the United States
where  the  reinsured  is  outside  the  United  States)  and  Canada,  and  the
international  results  include all other business  written by the Company.  The
geographic breakdown,  based on net premiums written, of the Company's principal
product lines is summarized as follows:
<TABLE>
<CAPTION>


                                                                   Year ended December 31,
                                       -------------------------------------------------------------------------------
(In millions)                                   2001                         2000                        1999
                                       -------------------------------------------------------------------------------
                                                      Inter-                      Inter-                       Inter-
                                        Domestic     national      Domestic      national       Domestic      national
                                       ------------ -----------    ------------- ----------    ------------ -----------
<S>                                       <C>          <C>           <C>          <C>            <C>           <C>

Property and Casualty Segment
   Property and Casualty.............     $1,955       $1,797        $2,103       $2,677         $2,102        $2,470
   Healthcare........................      1,383           67         1,294           76            851            43
   Commercial........................        349            -           404            -            417             -
Life Segment.........................        790        1,051           832          805            615           649
                                          ------       ------        ------       ------         ------        ------
   Total.............................     $4,477       $2,915        $4,633       $3,558         $3,985        $3,162
                                          ======       ======        ======       ======         ======        ======
</TABLE>

The  following  is  a  summary   description  of  the  Company's   domestic  and
international business based on principal product lines:

Property and Casualty Insurance/Reinsurance Segment

Property  and  Casualty   Reinsurance.   The  Company's  largest  product  line,
traditional property and casualty  reinsurance,  accounted for approximately 51%
of the Company's  worldwide net premiums written in 2001. The Company's  premium
volume in the property and casualty  segment is derived  principally from treaty
agreements,  which enable the Company to maintain lower  operating costs because
fewer  personnel are required to  administer  treaty  business than  facultative
business.  Most of the  Company's  casualty  business is written on an excess of
loss basis  because it better  enables the  Company to control  its  exposure on
business that has a relatively longer claim settlement pattern.

The  Company's  property  business  is  written  on both an excess of loss and a
proportional  basis.  Generally,  the  Company  is the  lead  reinsurer  for any
domestic program in which it participates, enabling it to negotiate the terms of
the reinsurance. The Company also acts as the lead reinsurer on a portion of its
international business.

The Company's  international  property and casualty business services  worldwide
markets, including most European countries and countries in the Middle East, Far
East and Latin America. For the year ended December 31, 2001,  approximately 48%
of the Company's  international  net premiums written from property and casualty
reinsurance  was  derived  from  property  reinsurance,  approximately  20% from
casualty reinsurance and approximately 32% from aviation and marine reinsurance.
Based  on  2001  net  premiums  written,  approximately  45%  of  the  Company's
international property and casualty business was written on a direct basis, with
the remainder written through brokers.





                                        3

<PAGE>
In  recent  years,  insurance  companies  have  directed  more  business  to the
better-capitalized,   more   highly-rated   reinsurers,   which  has  led  to  a
consolidation in the reinsurance industry. In competing with a smaller number of
global  reinsurers,  the Company has found that a number of its global customers
are increasingly demanding that reinsurers provide a broader range of coverages.
In response to this trend,  the Company has  expanded  the property and casualty
risks it reinsures beyond its more traditional property and casualty reinsurance
business  to include  risks  such as errors  and  omissions  and  directors  and
officers exposures. In addition to the expansion of lines of business,  property
and  casualty  reinsurance  has  aligned  its  marketing  efforts  with its core
expertise in areas such as  aviation,  national  accounts  and global  accounts.
Management  believes that the Company is well  positioned to compete on a global
basis in these markets.

The property and casualty  reinsurance  industry has  experienced  a significant
increase in  catastrophic  exposure and loss during the last  decade.  Increased
population  density,  particularly in regions  susceptible to tropical storms or
earthquakes, and the higher incidence and greater severity of catastrophes,  has
increased the losses incurred in many recent catastrophes.  As a result of these
developments,  the Company has taken  steps to limit its  exposure by  carefully
monitoring  and  allocating  its  property  and  casualty  exposure  to specific
geographic zones, especially the U.S., Europe, Japan and the Carribeans.

The September  11, 2001 attack on America has also had a dramatic  affect on the
insurance  and  reinsurance  industry  with the  tragic  loss of more than 1,000
insurance  professionals,  including  many business  associates and brokers with
whom the Company worked. None of the Company's staff suffered any injury.

The industry is playing a key role in the recovery and rebuilding  effort. It is
estimated that insurers and reinsurers  will pay claims of more than $35 billion
during the next several years. The Company estimated that its net pre-tax losses
will be $575 million from that attack.  The Company has paid or anticipates that
it  will  pay  claims  for  coverage  on the  World  Trade  Center  complex  and
surrounding  buildings,  its portion of aviation  coverage for the four aircraft
involved,  life reinsurance claims and business  interruption claims. The attack
has led to significant  changes in underwriting  guidelines,  and the Company no
longer provides terrorism coverage in many treaties and policies.

Healthcare. As part of the Company's property and casualty business segment, the
Company  provides  insurance and  reinsurance  for the  healthcare  industry and
targets employers, public entities, manufacturers and others for certain product
lines.   Coverages   include  primary  insurance  and  reinsurance  for  medical
professional  liability and insurance  protecting  primary  insurers  (including
self-insurers)  in the healthcare  market (e.g.,  excess workers'  compensation,
stop loss insurance, HMO reinsurance and provider excess coverages).

The Company is a leader in  providing  primary  medical  professional  liability
insurance  through  its  subsidiary-Medical   Protective  Corporation  ("Medical
Protective")-one  of the oldest  professional  liability  carriers in the United
States.  The  Company's  comprehensive  line of medical  malpractice  insurance,
written  on a  national  basis,  covers  the  needs  of  individual  physicians,
dentists,  physician partnerships,  corporations and large group practices on an
occurrence and claims-made basis.

The  healthcare  industry  continues  to  change  and  evolve  due to  voluntary
healthcare reform, managed healthcare initiatives,  deteriorating profits driven
by the  competitive  marketplace  and the  uncertainty  related to the extent of
government regulation.  In addition,  companies that historically specialized in
one line of  business  and one  geographic  area have  expanded  their  lines of
business and are now writing multiple lines of business in a broader territory.

The Company  believes that it is well  positioned  to compete in the  healthcare
market because of its wide range of experience in providing healthcare liability
coverage  and  excess  protection  for  self-insured  employers,  and  utilizing
multiple products and services to provide healthcare solutions.

Commercial Insurance. An additional component of the Company's domestic property
and casualty business is its commercial  insurance product line, which generally
consists of primary  commercial  property  and casualty  policies  written on an
admitted and non-admitted  basis in niche markets.  Commercial  products include
professional  liability  programs and niche programs in the general property and
casualty area. This coverage  provides  insurance for errors and omissions (E&O)
arising  out of the  professional  activities  of the  insureds  and  commercial
property and casualty coverages for niche programs.

                                        4

<PAGE>
Professional  classes  underwritten  include  lawyers,   property  and  casualty
insurance  agents and  brokers,  life and health  insurance  agents and brokers,
accountants  and a few  miscellaneous  classes.  The  majority of this  business
provides coverage to lawyers and property and casualty and life insurance agents
and brokers.

Competition  for the  classes of  business  underwritten  within  the  Company's
commercial  insurance product line has recently increased as more companies have
redirected  their  resources to the targeted niche markets.  In order to compete
for this  business,  the Company has provided  value-added  services,  including
enhanced  underwriting and automated processing services, to its wholesalers and
managing general agents producing such business.

Life Reinsurance Segment

Life  Reinsurance.  The Company is engaged in the  reinsurance  of various  life
insurance products,  including term, whole and universal life, annuities,  group
life, group and individual long-term health and disability products and provides
financial  reinsurance to life  insurers.  Based on net premiums  written,  life
reinsurance  accounted for approximately 25% of the Company's worldwide business
in 2001.

With respect to life  reinsurance,  the Company  writes mostly on a direct basis
with  primary  insurers.   The  Company's  life  reinsurance  business  consists
principally of treaty business and is written generally on a pro-rata basis. The
Company's  domestic life  reinsurance  business is written in every state in the
United States. The Company's  international  life reinsurance  business services
worldwide  markets  with an  emphasis  in  Western  Europe.  For the year  ended
December  31,  2001,  approximately  57% of  the  Company's  international  life
reinsurance net premiums written were for traditional life reinsurance, with the
balance for health and disability reinsurance.

The Company  believes  that  continued  increases in life  expectancy,  consumer
trends to shift to more investment types of life insurance  products,  decreases
in public  funding for social  programs in Europe and  deregulation  of the life
reinsurance markets in Europe and Japan present increased  opportunities for the
Company's life reinsurance business line.

Financial  Reinsurance.  Financial  reinsurance  does not  transfer  significant
underwriting  risk to the  reinsurer  and is designed  primarily  to enhance the
current  statutory surplus of the ceding company while reducing future statutory
earnings as amounts are repaid to the reinsurer.  These  financial  transactions
are  effectively  collateralized  by  anticipated  future  income  streams  from
selected insurance policies.  Financial  reinsurance typically has a duration of
three to five years.

Property and Casualty Reserves for Unpaid Claims and Claim Expenses

The  Company's  insurance/reinsurance  subsidiaries  maintain  reserves to cover
their  estimated  ultimate  liability for unpaid claims and claim  expenses with
respect  to  reported  and  unreported  claims  incurred  as of the  end of each
accounting  period (net of estimated  related salvage and  subrogation  claims).
These reserves are estimates that involve actuarial and statistical  projections
of the expected cost of the ultimate  settlement  and  administration  of unpaid
claims based on facts and circumstances  then known,  estimates of future trends
in claims severity and other variable factors such as inflation, new concepts of
liability and changes in claim settlement procedures. The inherent uncertainties
of estimating  claim reserves are  exacerbated for reinsurers by the significant
periods of time that often elapse  between the  occurrence of an insured  claim,
the  reporting  of the claim to the  primary  insurer  and,  ultimately,  to the
reinsurer,  and the  primary  insurer's  payment  of that  claim and  subsequent
indemnification  by the  reinsurer.  As a  consequence,  actual claims and claim
expenses paid may deviate,  perhaps  substantially,  from estimates reflected in
the insurance companies' reserves in their financial statements.  Adjustments to
previously  reported  reserves for net claims and claim  expenses are considered
changes in estimates for accounting  purposes and are reflected in the financial
statements in the period in which the adjustment occurs.

                                        5

<PAGE>
When a claim is  reported  to a ceding  company,  the  ceding  company's  claims
personnel  establish a "case  reserve" for the estimated  amount of the ultimate
payment.  The estimate reflects the informed judgment of such personnel based on
general  insurance  reserving  practices and on the  experience and knowledge of
such personnel regarding the nature and value of the specific type of claim. The
Company, in turn,  typically  establishes a case reserve when it receives notice
of a claim from the ceding  company.  Such reserves are based on an  independent
evaluation  by the  Company's  claims  departments,  taking  into  consideration
coverage,  liability,  severity of injury or damage, jurisdiction, an assessment
of the ceding company's  ability to evaluate and handle the claim and the amount
of reserves  recommended  by the ceding  company.  Case  reserves  are  adjusted
periodically  by the claims  departments  based on subsequent  developments  and
audits of ceding  companies.  The Company has  reorganized  its claim teams into
integrated groups to align with the Company's business structure.  In the course
of this reorganization,  the team recognized that best practices existed in many
of the original claims teams.  In order to leverage these best practices  across
the new claims  organization,  the Global  Claims Team  launched  the Claims Six
Sigma initiative.  Claims Six Sigma has focused on establishing common processes
in areas such as claims adjudication, subrogation, auditing, alternative dispute
resolution and use of structured settlements.

In accordance with GAAP, the Company also maintains reserves for claims incurred
but not reported  ("IBNR").  Such reserves are established to provide for future
case  reserves  and loss  payments  on  incurred  claims  that have not yet been
reported to an insurer or reinsurer.  In calculating IBNR reserves,  the Company
uses generally  accepted actuarial  reserving  techniques that take into account
quantitative loss experience data, together with, where appropriate, qualitative
factors.  IBNR  reserves are based on claim  experience  and are grouped both by
class of business and by accident year.  IBNR reserves are also adjusted to take
into  account  certain  additional  factors,  such as  changes  in the volume of
business  written,  reinsurance  contract  terms  and  conditions,  the  mix  of
business,  claims  processing and inflation,  that can be expected to affect the
Company's liability for claims over time.

The  potential  for  adverse  development  of the  Company's  reserves  for  its
international business, as compared to that of its domestic business, is reduced
because the international  operations have a relatively low proportion of longer
tail exposures.

Reserve Development. The development of the Company's net balance sheet property
and casualty liabilities for unpaid claims and claim expenses for accident years
1991 through 2001 is summarized in the following table.

Net  Liability.  The first row of data shows the  estimated  net  liability  for
unpaid claims and claim expenses at December 31 for each year from 1991 to 2001.
The liability includes both case and IBNR reserves as of each year-end date, net
of anticipated recoveries from other reinsurers.  The rows immediately following
the first row of data show  cumulative paid data at December 31, as of one year,
two years, . . ., 10 years of subsequent payments.

Net Liability Re-estimated. The middle rows of data show the re-estimated amount
for previously  reported net liability based on experience as of the end of each
subsequent calendar year's results. This estimate is changed as more information
becomes known about the underlying  claims for individual  years. The cumulative
redundancy  (deficiency)  shown in the  table is the  aggregate  net  change  in
estimates over the period of years  subsequent to the calendar year reflected at
the top of the  respective  columns.  The amount in the line titled  "Redundancy
(Deficiency) at December 31, 2001," represents for each calendar year (the "Base
Year")  the  aggregate  change in (i) the  Company's  original  estimate  of net
liability  for  unpaid  claims  and claim  expenses  for all years  prior to and
including  the Base  Year  compared  to (ii)  the  Company's  re-estimate  as of
December 31, 2001, of net liability for unpaid claims and claim expenses for all
years prior to and including the Base Year. A redundancy means that the original
estimate  was  greater  than the  re-estimate  and a  deficiency  means that the
original estimate was less than the re-estimate.

                                        6

<PAGE>
<TABLE>
<CAPTION>

                                              Changes in Historical Reserves for Unpaid Claims and Claim Expenses
                                                  For the Last Ten Years - GAAP Basis as of December 31, 2001

                                                                   Year ended December 31,
                           ---------------------------------------------------------------------------------------------------------
(In millions)                1991      1992      1993      1994      1995      1996      1997      1998      1999     2000     2001
                           ---------------------------------------------------------------------------------------------------------

<S>                         <C>       <C>       <C>       <C>       <C>       <C>       <C>      <C>       <C>      <C>      <C>
Net liability for unpaid
   claims and claim
   expenses                 $3,596    $3,991    $4,525    $5,071    $9,351    $9,458    $9,114   $12,495   $13,210  $12,202  $12,303
Cumulative paid as of:
One year later.......          665       802       949     1,115     1,964     1,949     2,176     2,867     4,811    4,758      ---
Two years later......        1,103     1,274     1,602     1,804     3,130     3,189     3,241     5,803     7,782      ---      ---
Three years later....        1,499     1,739     2,054     2,341     3,933     3,881     4,863     7,263       ---      ---      ---
Four years later.....        1,784     2,036     2,424     2,708     4,464     5,294     5,648       ---       ---      ---      ---
Five years later.....        2,008     2,293     2,690     2,988     5,686     5,919       ---       ---       ---      ---      ---
Six years later......        2,208     2,485     2,952     3,318     6,151       ---       ---       ---       ---      ---      ---
Seven years later....        2,362     2,688     3,181     3,540       ---       ---       ---       ---       ---      ---      ---
Eight years later....        2,531     2,841     3,353       ---       ---       ---       ---       ---       ---      ---      ---
Nine years later.....        2,653     2,985       ---       ---       ---       ---       ---       ---       ---      ---      ---
Ten years later......        2,772       ---       ---       ---       ---       ---       ---       ---       ---      ---      ---

Net liability
   re-estimated
   as of:
One year later.......       $3,625    $3,919    $4,612    $5,173    $9,192    $9,229    $9,179   $12,410   $13,749  $13,314      ---
Two years later......        3,587     4,066     4,656     5,313     8,959     9,127     8,655    12,115    14,504      ---      ---
Three years later....        3,701     4,095     4,793     5,256     8,907     8,549     8,453    11,987       ---      ---      ---
Four years later.....        3,687     4,238     4,747     5,155     8,392     8,252     8,601       ---       ---      ---      ---
Five years later.....        3,818     4,154     4,668     4,902     8,029     8,389       ---       ---       ---      ---      ---
Six years later......        3,771     4,075     4,487     4,804     8,180       ---       ---       ---       ---      ---      ---
Seven years later....        3,711     3,942     4,402     4,854       ---       ---       ---       ---       ---      ---      ---
Eight years later....        3,592     3,906     4,461       ---       ---       ---       ---       ---       ---      ---      ---
Nine years later.....        3,591     3,946       ---       ---       ---       ---       ---       ---       ---      ---      ---
Ten years later......        3,643       ---       ---       ---       ---       ---       ---       ---       ---      ---      ---
Redundancy (Deficiency)
   at December 31, 2001        (47)       45        64       217     1,171     1,069       513       508    (1,294)  (1,112)     ---
Effect of foreign
   exchange (1)                (41)      (21)        2       (25)     (708)     (672)     (344)     (729)     (589)     216      ---
                            ------    ------     ------   ------    ------    ------    ------    ------    ------   ------   ------
Redundancy (Deficiency)
   at December 31, 2001,
   excluding foreign
   exchange                 $  (88)   $   24     $   66   $  192    $  463    $  397    $  169    $ (221)  $(1,883)  $ (896)  $  ---
                            ======    ======     ======   ======    ======    ======    ======    ======   =======   ======   ======
</TABLE>

<TABLE>
<CAPTION>

(In millions)                         1992     1993     1994      1995      1996      1997      1998      1999     2000      2001
                                     ----------------------------------------------------------------------------------------------

<S>                                   <C>      <C>      <C>      <C>       <C>       <C>       <C>       <C>       <C>       <C>
Balance at December 31 - gross.....  $4,815   $5,312   $6,020   $11,145   $10,869   $10,936   $15,342   $17,435   $16,932   $20,882
Less reinsurance recoverables......    (824)    (787)    (949)   (1,794)   (1,411)   (1,822)   (2,847)   (4,225)   (4,730)   (8,579)
                                     ------   ------   ------   -------   -------   -------   -------   -------   -------   -------
Balance at December 31 - net.......   3,991    4,525    5,071     9,351     9,458     9,114    12,495    13,210    12,202    12,303
                                     ------   ------   ------   -------   -------   -------   -------   -------   -------   -------
Latest re-estimated liability -
   gross...........................   5,079    5,546    5,958     9,724     9,888    10,336    15,520    20,340    19,364       ---
Less re-estimated reinsurance
   recoverables....................  (1,133)  (1,085)  (1,104)   (1,544)   (1,499)   (1,735)   (3,533)   (5,836)   (6,050)      ---
                                     ------   ------   ------   -------   -------   -------   -------   -------   -------   -------
Latest re-estimated liability -
    net............................   3,946    4,461    4,854      8,180     8,389     8,601    11,987    14,504    13,314       ---
                                     ------   ------   ------    ------    ------    ------   -------   -------   -------   -------
Gross redundancy (deficiency)......    (264)    (234)      62      1,421       981       600      (178)   (2,905)   (2,432)      ---
Effect of foreign exchange (1).....     (30)      (3)     (35)      (859)     (816)     (402)   (1,091)     (934)      382       ---
                                     -------   ------   ------     ------   -------   -------   -------   -------   -------   ------
Gross redundancy (deficiency),
   excluding foreign exchange......  $ (294)  $ (237)  $   27     $  562   $   165   $   198   $(1,269)  $(3,839)  $(2,050)  $   ---
                                     ======   ======   ======     ======   =======   =======   =======   =======   =======   =======
</TABLE>
(1)  The results of  the  Company's  international  operations  translated  from
     functional  currencies  into U.S.  dollars are included  with the Company's
     U.S.   underwriting   operations  in  this  table.   The  foreign  currency
     translation impact on the cumulative  redundancy  (deficiency)  arises from
     the  difference  between  reserve  developments  translated at the exchange
     rates at the end of the  year in  which  the  liabilities  were  originally
     estimated  and the  exchange  rates  at the end of the  year in  which  the
     liabilities were re-estimated.

Note:  For a description of the purpose of the above table and the various table
sections,  please refer to the immediately  preceding  section entitled "Reserve
Development."
                                        7
<PAGE>
A number of major  trends  that  occurred  within the  insurance  industry,  the
economy in general and several  Company-specific  factors have had a significant
effect on the Company's  liabilities for unpaid claims and claim expenses during
the period covered by the preceding table.

Claims and claim expense  reserve  development  in the mid 1980's  reflected the
inadequate  premium rates which resulted from intense  competition in the market
during that period. In the late 1980's, the reinsurance market generally reacted
to the rate  deficiencies  and the resulting  claims and claim  expense  reserve
development  by  increasing  rates and  strengthening  claims and claim  expense
reserves.  This is reflected,  with respect to the Company,  in the  significant
improvements in the overall reserve  adequacy in the early 1990's.  The increase
in reserve  redundancies  indicated for 1995 through 1997 is attributable to the
favorable claim environment that existed during that period.

The indicated  deficiency in the 1998 reserve position is attributable to higher
than  normal  claim and claim  expense  development  across a number of lines of
business,  including  property coverages (which was most highly impacted by much
higher than expected  industry-wide  losses with respect to Hurricane  Georges),
long-term disability and communications/media liability.

The significant indicated deficiency that has developed with respect to the 1999
recorded reserves is primarily attributable to the combination of the effects of
continued   insufficient  pricing  within  the  overall  property  and  casualty
insurance/reinsurance  industry and the insurance  industry's  undervaluing  the
initial  loss  estimates  for  certain  European  windstorms  occurring  late in
December 1999. Based on the continued  escalation in reported losses relative to
associated  premiums,  it became  more  apparent  during  2000 that the level of
general  price  erosion  that  occurred in the  primary  property  and  casualty
insurance  industry  in recent  years was  significantly  greater  than had been
previously  contemplated.  In  response  to  this  new  information,  it  became
necessary  for the  Company to  increase  claim  reserves  to reflect the higher
ultimate  loss  projections  resulting  from  this  increasing  trend  of  claim
development on these more recent underwriting years.

Unfortunately, the escalation in reported losses relative to associated premiums
that  emerged in 2000  continued  in 2001,  and at a pace  greater than had been
anticipated  in the  actuarial  reserve  studies  completed  in late 2000.  As a
result,  in 2001, it again became  necessary  for the Company to increase  claim
reserves to reflect the higher  ultimate  loss  projections  for prior year loss
events. The majority of the adverse  development in 2001, and to a lesser extent
in 2000, related to higher projected losses on liability  coverages,  especially
in the hospital liability, nonstandard automobile (automobile insurance extended
to higher-risk drivers) and commercial general liability lines of business.  The
total  adverse  development  on  prior  year  loss  events  recognized  in  2001
aggregated approximately $800 million.

To a lesser  degree,  development  of  asbestos  and  environmental  claims  has
affected the Company's  results.  Higher than anticipated levels of inflation in
certain  lines of  reinsurance  businesses  has also had an  adverse  effect  on
liabilities  for  claims  and  claim  expenses,  particularly  in excess of loss
reinsurance.





                                        8


<PAGE>
The Company's  reconciliation  of its beginning and ending property and casualty
reserves for unpaid  claims and claim  expenses on a GAAP basis is summarized as
follows:
<TABLE>
<CAPTION>


                                                                 Year ended December 31,
                                                          -----------------------------------
(In millions)                                              2001           2000         1999
                                                          -----------------------------------

<S>                <C>                                    <C>           <C>           <C>
Balance at January 1 - gross............................. $16,932       $17,435       $15,342
Less reinsurance recoverables............................  (4,730)       (4,225)       (2,847)
                                                          -------       -------       -------
Balance at January 1 - net...............................  12,202        13,210        12,495
                                                          -------       -------       -------

Claims and expenses incurred:
   Current year..........................................   4,579         4,401         4,162
   Prior years...........................................     811           934           233
                                                          -------       -------       -------
                                                            5,390         5,335         4,395
                                                          -------       -------       -------

Claims and expenses paid:
   Current year..........................................    (761)       (1,290)       (1,228)
   Prior years...........................................  (4,758)       (4,811)       (2,867)
                                                          -------       -------       -------
                                                           (5,519)       (6,101)       (4,095)
                                                          -------       -------       -------

Claim reserves related to acquired companies.............       -           279           793

Claim reserves related to disposed companies.............       -             -          (202)

Foreign exchange and other...............................     230          (521)         (176)
                                                          -------       -------       -------
Balance at December 31 - net.............................  12,303        12,202        13,210
Add reinsurance recoverables.............................   8,579         4,730         4,225
                                                          -------       -------       -------
Balance at December 31 - gross........................... $20,882       $16,932       $17,435
                                                          =======       =======       =======
</TABLE>


The  liabilities  for claims and claim  expenses in the preceding  table include
long-term  disability  claims  that are  discounted  at a 6% rate for all  years
presented. As a result of discounting the Company's long-term disability claims,
total  liabilities  for  claims  and  claim  expenses  have been  reduced  by an
estimated  1% at  December  31,  2001 and 2000.  The  accretion  of  discount is
included in current  operating  results as part of the development of prior year
liabilities.  Discounts amortized as a percentage of claims,  claim expenses and
policy benefits were less than 1% for each of the years ended December 31, 2001,
2000 and 1999.

The Company's  reconciliation  of its property and casualty  reserves for unpaid
claims and claim expenses  between  statutory basis and GAAP basis is summarized
as follows:
<TABLE>
<CAPTION>

                                                                                December 31,
                                                               ------------------------------------------------
(In millions)                                                         2001           2000            1999
                                                               ---------------- --------------- ---------------

<S>                                                                <C>             <C>            <C>
Statutory basis reserves for U.S. companies - net.........         $ 5,786         $ 6,213        $ 7,204
Adjustments to arrive at GAAP basis (1)...................             664             500            636
                                                                   -------         -------        -------
GAAP basis reserves for U.S. companies - net..............           6,450           6,713          7,840
GAAP basis reserves for non-U.S. companies - net..........           5,853           5,489          5,370
                                                                   -------         -------        -------
Total GAAP basis reserves - net...........................          12,303          12,202         13,210
Add reinsurance recoverables..............................           8,579           4,730          4,225
                                                                   -------         -------        -------
GAAP basis reserves - gross...............................         $20,882         $16,932        $17,435
                                                                   =======         =======        =======
</TABLE>


(1)  Statutory  basis  reserve  offsets and  reserves  reclassified  to contract
     deposit assets or liabilities based on risk transfer provisions of SFAS No.
     113.

                                        9


<PAGE>
Asbestos and  Environmental  Exposure.  Included in the Company's  liability for
claims  and claim  expenses  are  liabilities  for  asbestos  and  environmental
exposures.  These claims and claim  expenses are  primarily  related to policies
written  prior  to 1986 as the  policies  written  since  1986  have  tended  to
explicitly  exclude asbestos and  environmental  risks from coverage and most of
the asbestos and environmental  exposures arise from risks located in the United
States.

The three-year  development of claims and claim expense reserves associated with
the  Company's  asbestos  and  environmental  claims,  including  case  and IBNR
reserves, is summarized as follows:
<TABLE>
<CAPTION>


                                                                          Year ended December 31,
                                                                --------------------------------------------
(In millions)                                                       2001           2000            1999
                                                                -------------- -------------- --------------

<S>                <C>                                              <C>            <C>             <C>
Balance at January 1 - gross..............................          $829           $800            $995
Less reinsurance recoverables.............................          (183)          (195)           (206)
                                                                    ----           ----            ----
Balance at January 1 - net................................           646            605             789

Claims and expenses incurred..............................            23             99              (7)
Claims and expenses paid..................................           (48)           (58)           (210)
Claim reserves related to acquired companies..............             -              -              33
                                                                    ----           ----            ----

Balance at December 31 - net..............................           621            646             605
Add reinsurance recoverables..............................           165            183             195
                                                                    ----           ----            ----
Balance at December 31 - gross............................          $786           $829            $800
                                                                    ====           ====            ====
</TABLE>


The amounts in the preceding  table are  management's  best  estimate,  based on
currently  available  information,  of claims  and claim  expense  payments  and
recoveries for asbestos and environmental exposures that are expected to develop
in future years.

The  Company  monitors  evolving  case law and its  effect  on  asbestos-related
illness and toxic waste cleanup claims. Changing domestic and foreign government
regulations and legislation, including continuing congressional consideration of
federal   Superfund   legislation,   newly   reported   claims,   new   contract
interpretations  and other  factors  could  significantly  affect  future  claim
development. While the Company has recorded its best estimate of its liabilities
for  asbestos-related  illness and toxic waste cleanup claims based on currently
available  information,  it is possible that additional liabilities may arise in
the future.  It is not  possible to estimate  with any  certainty  the amount of
additional net claims and claim  expenses,  or the range of net claims and claim
expenses,  if any,  that is  reasonably  possible;  therefore,  there  can be no
assurance  that future  liabilities  will not  materially  affect the  Company's
results of operations, financial position or cash flows.

Other Mass Tort Exposures. In addition to asbestos and environmental  exposures,
the Company  also may have  exposures  to other mass torts  involving  primarily
product  liability  issues  such as  tobacco  products,  gun  manufacturers  and
silicone breast implants.  The Company has, in the past,  generally  avoided the
products  liability  reinsurance  business,  and,  based on currently  available
information, future liabilities resulting from these matters are not expected to
be material to the Company's results of operations,  financial  position or cash
flows.

Life and Health  Reserves for Future Policy  Benefits and  Accumulated  Contract
Values

Future policy benefits for  traditional  life and health  reinsurance  contracts
represent  the  present  value of such  benefits  based on  mortality  and other
assumptions  which were  appropriate at the time the policies were issued or, in
the event the policies were acquired by the Company from another insurer, at the
date of acquisition.  Interest rate  assumptions used in calculating the present
value  generally  ranged  from 3-9% per annum at  December  31,  2001.  Payments
received from sales of universal life and investment contracts are recognized by
providing   liabilities  equal  to  the  accumulated   contract  values  of  the
policyholders'  contracts.  Interest  rates  credited to such universal life and
investment  contracts are generally  guaranteed for a specified time period with
renewal  rates  determined  by the issuing  insurance  company.  Such  crediting
interest rates ranged from 3-9% per annum in 2001.


                                       10

<PAGE>
Regulatory Matters

GE Global  Insurance  and its domestic  subsidiaries  are subject to  regulation
under the insurance statutes,  including insurance holding company statutes,  of
various  states,   including  Missouri,   Kansas,   Illinois  and  Indiana,  the
domiciliary states of GE Global Insurance's principal domestic insurance company
subsidiaries.   The   international   subsidiaries   of  Employers   Reinsurance
Corporation  (the "GE  Frankona  Re  Group")  are  subject to  regulation  under
insurance statutes of various foreign countries.

General.   The  regulation  and  supervision  to  which  GE  Global  Insurance's
subsidiaries  are  subject  relate   primarily  to  licensing   requirements  of
reinsurers,  the  standards  of solvency  that must be met and  maintained,  the
amount of  dividends  that may be paid by such  subsidiaries,  the nature of and
limitations  on  investments,  restrictions  on the  size of  risks  that may be
insured  or  reinsured,  deposits  of  securities  for  the  benefit  of  ceding
companies,  periodic  examinations  of the  financial  condition  and affairs of
reinsurers,  the form and content of financial  statements  required to be filed
with regulatory authorities and reserves for unearned premiums, losses and other
purposes.  In  general,  such  regulation  is for the  protection  of the ceding
companies and, ultimately, their policyholders,  rather than security holders of
the  regulated  reinsurer.  GE Global  Insurance  believes  it is,  and that its
subsidiaries   are,  in  material   compliance  with  all  applicable  laws  and
regulations pertaining to their business and operations.

U.S.  Insurance  Regulation.  U.S.  domestic  property  and  casualty  and  life
insurers,  including  reinsurers,  are subject to  regulation by their states of
domicile  and by those states in which they are  licensed.  The rates and policy
terms of primary  insurance  policies  generally are closely  regulated by state
insurance departments.  While reinsurance is not regulated as closely as primary
insurance,  some states do impose  control over certain terms and  conditions of
reinsurance  agreements by virtue of their authority to grant or deny credit for
ceded reinsurance by its domiciled primary insurers. In addition, as a practical
matter, the rates permitted to be charged by primary insurers can have an effect
on the rates that are charged by reinsurers.

Effective January 1, 2001, the National  Association of Insurance  Commissioners
("NAIC")  required  that  insurance  companies  prepare  their  statutory  basis
financial  statements  in  accordance  with the NAIC  Accounting  Practices  and
Procedures  Manual  subject to any  deviations  prescribed  or  permitted by the
domiciliary  state  insurance   departments.   Statutory   accounting  practices
determine,  among other things,  the statutory  surplus of an insurance  company
and, therefore, the amount of funds that can be paid as dividends. For statutory
reporting  purposes,  accounting  changes adopted to conform to these accounting
practices are reported as changes in accounting principles,  with the cumulative
effect  reported  as an  adjustment  to 2001  unassigned  funds  (surplus).  The
cumulative effect is the difference between the amount of capital and surplus at
the  beginning of the year and the amount of capital and surplus that would have
been  reported at that date if the new  accounting  principles  had been applied
retroactively  for all periods.  As a result of adoption of the model  statutory
accounting  practices,  aggregate  cumulative  adjustments totaling $234 million
were  recorded by Employers  Reinsurance  Corporation  ("ERC"),  GE  Reinsurance
Corporation ("GE Re") and Medical  Protective as an increase to unassigned funds
(surplus) at January 1, 2001, primarily related to the recording of deferred tax
assets.

Risk-Based Capital. The NAIC has adopted minimum risk-based capital requirements
to  evaluate  the  adequacy of  statutory  capital and surplus in relation to an
insurance  company's  risks.   Regulatory  compliance  with  risk-based  capital
requirements  is defined by a ratio of a  company's  regulatory  total  adjusted
capital to its authorized  control level risk-based  capital,  as defined by the
NAIC. At December 31, 2001,  each of GE Global  Insurance's  domestic  insurance
company subsidiaries exceeded the minimum risk-based capital requirements.

Insurance  Holding Company  Regulations.  The insurance holding company laws and
regulations vary from state to state, but generally require an insurance holding
company to register with its domiciliary  state insurance  regulatory agency and
file certain  reports that include  current  information  concerning the capital
structure,  ownership,  management,  financial  condition  and general  business
operations of the insurance holding company and its subsidiary insurers that are
licensed in the state.  State insurance  holding  company laws and  regulations,
with  respect to domestic  insurers,  also require  prior  notice or  regulatory
approval  of changes in control  of an  insurer or its  holding  company  and of
material inter-affiliate transactions within the holding company structure.


                                       11


<PAGE>
Dividends by  Subsidiaries.  Because the  operations of GE Global  Insurance are
conducted  primarily  through  ERC,  GE Re and  Medical  Protective,  GE  Global
Insurance  is  dependent  upon  dividends,  tax  allocation  and other  payments
primarily  from ERC, GE Re and Medical  Protective  to service its debt and meet
its other obligations.  The payment of dividends and other payments to GE Global
Insurance  by ERC,  GE Re and  Medical  Protective  are  subject to  limitations
imposed by the Missouri, Illinois and Indiana Insurance Codes, respectively. The
payment of  dividends to ERC by its  principal  life  reinsurance  subsidiaries,
Employers  Reassurance  Corporation and ERC Life  Reinsurance  Corporation,  are
subject to  limitations  imposed by the Kansas  and  Missouri  Insurance  Codes,
respectively.  No prediction can be made as to whether any legislative proposals
relating  to dividend  rules in Kansas,  Missouri,  Illinois or Indiana  will be
made,  whether any such legislative  proposal will be adopted in the future,  or
the effect, if any, any such proposal would have on the Company.

The maximum  amount  available for the payment of dividends by ERC without prior
regulatory  approval is $273  million at  December  31,  2001.  Such amount will
increase to $341 million by December 31,  2002.  Of this amount,  $88 million is
committed to pay  dividends on the  preferred  stock issued by ERC to GE Capital
Corporation.  GE Re will not be able to make any dividend  payments  during 2002
without  the  prior  approval  of the  Director  of  Insurance  for the State of
Illinois.  The maximum amount available for the payment of dividends during 2002
by Medical  Protective  without prior  regulatory  approval is $74 million after
December 27, 2002.

International Regulations. Based on 2001 net premiums written, approximately 39%
of the Company's business is carried on outside of the United States. The degree
of regulation and  supervision in foreign  jurisdictions  varies from minimal in
some to stringent in others.  Licenses  issued by foreign  authorities to the GE
Frankona Re Group are subject to modification or revocation by such authorities,
and such subsidiaries could be prevented from conducting  business in certain of
the jurisdictions  where they currently operate. In the past, the GE Frankona Re
Group has been allowed to modify their  operations to conform with new licensing
requirements   in  all   jurisdictions   that  are  material  to  the  Company's
international operations.

In addition to licensing requirements,  the GE Frankona Re Group is regulated in
various  jurisdictions  with respect to, among other  things,  currency,  policy
language  and terms,  methods of  accounting  and  auditing,  amount and type of
security  deposits,  amount  and  type of  reserves,  amount  and  type of local
investment  and  the  share  of  profits  to be  returned  to  policyholders  on
participating policies. Regulations governing constitution of technical reserves
(including  equalization reserves) in some countries could hinder the remittance
of profits and repatriation of assets and the payment of dividends; however, the
Company does not believe that these  regulations  will have a material impact on
the GE Frankona Re Group's operations.

Effective  January 1, 2001,  certain of the Company's  international  operations
(licensed in the European  Union  ("EU")  member  states) are required to comply
with the EU Directive on Supplementary  Supervision of Insurance Undertakings in
an Insurance  Group.  This directive is designed to address  solvency issues for
groups of insurance  companies and supplements  the solvency tests  historically
performed on individual insurance companies.  The main goal of this directive is
to  assess  the  overall  capital  available  to the  group,  rather  than on an
individual company basis, and identify potential risks. The Company is currently
in the process of performing such required solvency tests in anticipation of the
first filing in 2002.


Item 2.  Properties.

The Company conducts business from various facilities, most of which are leased.
In  addition,  the Company  owns its  administrative  offices in Overland  Park,
Kansas, Fort Wayne, Indiana and Munich, Germany.


                                       12


<PAGE>
Item 3.  Legal Proceedings.

There are no pending legal  proceedings  beyond the ordinary  course of business
that in the opinion of the Company's management,  based on information available
at the  date of  this  report,  would  have a  material  adverse  effect  on the
Company's  consolidated results of operation or financial  condition,  except as
noted in the following paragraph.

As a result of the  September  11, 2001  terrorist  attacks,  both towers of the
World  Trade  Center  in  New  York  City  ("WTC")  were  completely  destroyed.
Industrial  Risk Insurers  ("IRI"),  an affiliate of ERC, was one of the primary
insurers  of the WTC  with an  occurrence  policy  limit  of  $237  million.  In
addition,  ERC reinsured part of the various other primary  insurers of the WTC,
limits of which are also written on a per occurrence basis. The principal lessee
of the WTC is alleging  that the damage to (i.e.,  the loss of) each tower was a
separate  occurrence.  It is the  contention of all insurers of the WTC that the
policies  were  written  in such a way  that  the  loss of both  towers  in this
instance  constituted one  occurrence.  Suit has been filed in the United States
District Court in New York seeking a declaratory judgment on this question.  IRI
is a party to this suit,  as are several of ERC's  reinsureds.  Discovery in the
suit(s) is  underway.  Both IRI and ERC have  retrocessional  coverage  on their
exposure  to WTC  losses  covering  a  portion  of losses  incurred.  Management
believes that there is compelling  evidence supporting their contention that the
loss of both towers  constituted a single  occurrence of loss and is prepared to
defend  this  position  vigorously   (including  litigation  if  required)  and,
accordingly, has established claim reserves on this basis.



Item 4.  Submission of Matters to a Vote of Security Holders.

Omitted



                                     PART II


Item 5.  Market  for the  Registrant's  Common  Equity and  Related  Stockholder
         Matters.

All of the common stock of GE Global Insurance,  its sole class of common equity
on the date hereof,  is owned by GE Capital Services.  Accordingly,  there is no
public trading market for the Company's common equity.


Item 6.  Selected Financial Data.

                           Consolidated Financial Data
<TABLE>
<CAPTION>


                                                                    Year ended December 31,
                                                -----------------------------------------------------------------
(In millions)                                       2001         2000        1999        1998           1997
                                                -----------------------------------------------------------------

<S>                                             <C>          <C>           <C>           <C>           <C>
Total revenues...............................   $9,191       $10,131       $ 9,031       $ 7,203       $ 5,784
Net Premiums Written.........................    7,392         8,191         7,147         5,984         4,545
Net investment income........................    1,202         1,315         1,151           985           910
Net realized gains on investments............      436           522           699           432           303
Earnings (loss) before income taxes and
   cumulative effect of change in
   accounting principle .....................     (466)          605           988         1,070           882
Net earnings (loss)..........................     (195)          581           720           779           648
Total investments............................   22,495        21,191        21,539        21,987        18,343
Total assets.................................   45,118        38,564        37,561        35,047        27,532
Stockholder's equity.........................  $ 6,362       $ 6,025       $ 5,575       $ 6,020       $ 5,374
Return on equity (average)...................     (3.1%)        10.0%         12.4%         13.7%         12.8%
Stockholder's equity, excluding unrealized
   gains (losses) on investment securities...  $ 6,339       $ 5,882       $ 5,524       $ 5,088       $ 4,628
Return on equity (average), excluding
   unrealized gains (losses) on investment
   securities................................     (3.2%)        10.2%         13.6%         16.0%         14.6%
</TABLE>


                                       13


<PAGE>
Item 7. Management's  Discussion and Analysis of Financial Condition and Results
        of Operations

Overview

Year Ended December 31, 2001 Compared to Year Ended December 31, 2000

Net premiums written and net premiums earned decreased $798 million (or 10%) and
$816 million (also 10%), respectively, in 2001. The majority of this decrease is
attributable to the $698 million of premiums ceded in connection with the events
of  September  11 as  discussed  below.  The  remaining  decrease in premiums is
attributable  to (1) the decision to exit certain lines of business and customer
relationships as part of a reunderwriting initiative undertaken in 2000/2001 and
(2)  additional  ceded  premiums  resulting  from  claims  made  on  prior  year
retrocession  coverages in place as a result of the adverse development on prior
year losses  recognized in 2001,  somewhat  offset by general growth in premiums
due to the  combination  of recent  hardening  of  pricing  within  the  overall
property  and  casualty  insurance/reinsurance  industry  and a focus on  growth
within certain niche markets.

Excluding the decrease in net premiums earned,  the remaining revenue categories
decreased  $124 million,  principally  as a result of lower levels of investment
income  resulting  from the  general  decline  in  interest  rates in 2001 and a
reduction in net realized gains on  investments,  somewhat offset by an increase
in other revenues.

GE  Global  Insurance  incurred  a loss  before  cumulative  effect of change in
accounting principle (see further discussion of this accounting change in note 2
to the accompanying  consolidated financial statements) of $184 million in 2001,
as compared to earnings of $581 million in 2000.  Operating  results for 2001 as
compared to 2000 were adversely  impacted by approximately  $575 million related
to the  insurance  losses  arising from the events of September 11. This amount,
which primarily  resulted from contingent  premium payments contained in certain
retrocession  agreements,  comprises $698 million recorded as a reduction in net
premiums earned,  and $78 million reflecting  additional claims,  claim expenses
and policy benefits,  partially offset by $201 million reflecting a reduction in
insurance  acquisition  costs.  The  gross  losses  arising  from the  events of
September 11  (estimated  to be $3.3  billion)  relate to  underlying  insurance
policies  and  reinsurance   contracts   providing  general  property,   general
liability,  aviation,  business interruption,  workers compensation and life and
health-related  coverages.  Historical  experience related to large catastrophic
events has shown that a broad range of total  insurance  industry loss estimates
often  exists  following  such an event  and it is not  unusual  for there to be
significant subsequent revisions in such estimates. $575 million is management's
best estimate of its existing net liability based on the  information  currently
available,  and is net of estimated recoveries under retrocession  arrangements,
under  which a  portion  of  losses  is  routinely  ceded to  other  reinsurance
entities. Further information regarding potential litigation associated with the
events of September 11 is  discussed  in note 13 to the  consolidated  financial
statements.

The Company's  retrocession  program includes aggregate excess of loss coverages
in which  accident  year losses  exceeding  a specified  loss ratio are ceded to
retrocessionaires.  These contracts also contain  contingent  premium provisions
whereby the Company is required to cede additional premiums equal to a specified
portion of the covered  losses.  As described in the  preceding  paragraph,  the
accident  year losses  incurred in 2001,  primarily as a result of the insurance
losses  arising from the events of September  11,  exceeded the  specified  loss
ratio and, accordingly,  accruals for reinsurance recoverables and ceded premium
payables were reflected in the accompanying consolidated financial statements in
accordance  with  the  terms  of  the  underlying  retrocession  contracts.  The
associated  accrued   reinsurance   recoverables  will  be  collected  when  the
underlying paid losses exceed the specified loss ratios.

Substantially  all of the Company's  retrocessionaires  are large,  highly rated
reinsurance  entities.  At this time,  management  does not anticipate  that any
significant portion of its estimated recoveries will be uncollectible.

Operating  results  in  2001  were  also  adversely  affected  by the  continued
deterioration   of  underwriting   results,   reflecting   higher  property  and
casualty-related losses (principally as a result of adverse development relating
to  prior-year  loss  events) and the  continued  effects of low premiums in the
property and casualty  insurance/reinsurance  industry in recent  years.  As the
Company's  underwriting  results in 2001,  typical of the  global  property  and
casualty industry, were realized, management began underwriting initiatives that
increased  premium  prices  for given  levels  of  coverage.  These  initiatives
resulted in management reconsidering and clarifying the product lines, policies,
contracts and specific  customers for which,  given the risk,  acceptable future
levels of profit seem achievable.  For these businesses,  the Company has sought
to  retain or even  expand  its  business.  On the other  hand,  management  has
identified particular property and casualty business channels from which returns
do not appear to justify the risks.  For these  channels,  new business  will be
significantly curtailed or exited.


                                       14
<PAGE>
The  majority of the adverse  development  in 2001  related to higher  projected
ultimate losses for liability  coverages,  especially in the hospital liability,
nonstandard  automobile  (automobile  insurance extended to higher-risk drivers)
and commercial general liability lines of business.

Income tax benefits  partially  offset the  significant  pre-tax  operating loss
generated in 2001. Such recorded tax benefits  include the impact of the Company
holding a significant portion of its overall investment  portfolio in securities
that are  substantially  exempt from U.S.  taxation and the treatment of certain
proceeds  received  in  connection  with the  resolution  of issues  involving a
previous acquisition as a purchase price adjustment for tax purposes.


Year Ended December 31, 2000 Compared to Year Ended December 31, 1999

Net  premiums  written  increased  $1,044  million  or  15% in  2000,  primarily
attributable to the combination of hardening pricing within the overall property
and casualty insurance/reinsurance  industry, a focus on growth within the niche
direct commercial market and the impact of a full year of operating activity for
the March 1999  acquisition of Eagle Star Re. This growth was somewhat offset by
the 2000 decisions to exit certain lines of business and customer  relationships
as part of a reunderwriting  initiative  undertaken during the year, an increase
in  contingently  payable ceded premiums  related to recorded  recoveries  under
aggregate  excess  retrocession  programs  and the  impact of  foreign  currency
translation in connection  with the continued  strengthening  of the U.S. dollar
compared to most major European currencies.

Net  earnings  decreased  $139  million or 19% in 2000,  including a decrease in
after-tax net realized gains on investments of $100 million. Excluding after-tax
net realized gains on investments,  net earnings decreased $39 million or 14% in
2000. This decrease reflects  deterioration of underwriting  results,  including
adverse  development on prior year recorded  losses.  The  significant  level of
adverse  development on prior year recorded losses is primarily  attributable to
the  combination  of the effects of continued  insufficient  pricing  within the
overall property and casualty  insurance/reinsurance  industry and the insurance
industry's   undervaluing  the  initial  loss  estimates  for  certain  European
windstorms occurring late in December 1999. Based on the continued escalation in
reported losses relative to associated premiums,  it became more apparent during
2000 that the level of  general  price  erosion  that  occurred  in the  primary
property  and  casualty  insurance  industry in recent  years was  significantly
greater  than  had  been  previously  contemplated.  In  response  to  this  new
information,  it became  necessary for the Company to increase claim reserves to
reflect the higher  ultimate loss  projections  resulting  from this  increasing
trend of claim development on these more recent underwriting years.

Partially  offsetting  these reductions in net earnings were: (1) an increase in
net investment income due to the combination of higher average investment yields
(as a result of the increasing U.S. interest rate environment throughout most of
2000)  and  repositioning  of the  investment  portfolio  to  include  a  higher
proportion of fixed maturity  securities and (2) tax benefits  attributable to a
step-up  in the tax  basis of  certain  assets  following  the  conversion  of a
corporate subsidiary to a partnership for German tax purposes.


                                       15
<PAGE>
Domestic Property and Casualty Business
<TABLE>
<CAPTION>


                                                     Year ended December 31,
                                                 -------------------------------
(In millions)                                      2001         2000       1999
                                                 -------------------------------

<S>                                               <C>         <C>        <C>
Net premiums written...........................   $3,687      $3,801     $3,370
Net underwriting loss..........................   (1,305)       (419)      (423)
Net investment income..........................      530         606        513
Earnings (loss) before income taxes and
    cumulative effect of change in accounting
    principle..................................     (586)        250        533
Net realized gains on investments..............      268         128        516
Earnings (loss) before income taxes and
    cumulative effect of change in accounting
    principle, excluding net realized gains
    on investments.............................     (854)        122         17
GAAP ratios (1):
   GAAP claims and claim expense ratio.........    102.2%       77.4%      79.5%
   GAAP underwriting expense ratio.............     33.1%       34.4%      33.6%
                                                   -----       -----      -----
   GAAP combined ratio.........................    135.3%      111.8%     113.1%
                                                   =====       =====      =====
</TABLE>


(1) Represents  data for the applicable  periods  calculated in accordance  with
    GAAP.  Claims  and  claim  expense  ratio  represents  incurred  claims  and
    claim expenses as  a  percentage  of  net  premiums   earned.   Underwriting
    expense  ratio   represents   acquisition   costs  and   other  underwriting
    expenses  (excluding  amortization  of   intangibles,  interest  expense and
    minority  interest  in  net  earnings  of  consolidated  subsidiaries)  as a
    percentage of net premiums earned.  The  combined  ratio  represents the sum
    of the claims and claim expense ratio and the underwriting expense ratio.

Net  premiums  written   decreased  $114  million  or  3%  in  2001,   primarily
attributable  to (1)  higher  levels  of ceded  losses  under  aggregate  excess
retrocession  programs (both current year  principally as a result of the events
of September 11 and prior years due to continued adverse claim  development) and
(2) the decision to exit certain lines of business and customer relationships as
part of a reunderwriting initiative undertaken in 2000/2001,  somewhat offset by
general growth in premiums due to the combination of recent hardening of pricing
within the overall  property and casualty  insurance/reinsurance  industry and a
focus on growth within certain niche  markets.  Net premiums  written  increased
$431  million  or 13% in 2000,  primarily  attributable  to the  combination  of
hardening pricing within the overall property and casualty insurance/reinsurance
industry and a focus on growth within the niche direct commercial  market.  This
increase was  partially  offset by the 2000  decision to exit  certain  lines of
business  and  customer  relationships  as part of a  reunderwriting  initiative
undertaken  during the year and higher levels of ceded premiums under  aggregate
excess retrocession programs.

Typically,  the  underwriting  performance of property and casualty  business is
measured in terms of a combined ratio. The combined ratio is the sum of the loss
ratio  and  the  underwriting  expense  ratio,  with a  ratio  lower  than  100%
indicating an  underwriting  profit and a ratio greater than 100%  indicating an
underwriting  loss.  Although the combined  ratio has been greater than 100% for
the three years presented above, the operating results of  insurance/reinsurance
companies  include  net  investment  income  which  generally  yields an overall
operating profit.

The significant increase in the 2001 combined ratio is partially attributable to
higher levels of ceded premiums and incurred losses resulting from the events of
September 11.  Excluding  this impact,  the 2001 combined  ratio would have been
126.6%. The relatively high combined ratios in 2001 (excluding the impact of the
events  of  September  11),  2000 and 1999  primarily  reflect  the  effects  of
continued   insufficient  pricing  within  the  overall  property  and  casualty
insurance/reinsurance  industry in recent years and adverse development on prior
year recorded losses. The majority of the adverse development in 2001 related to
higher  projected  ultimate  losses for liability  coverages,  especially in the
hospital liability,  nonstandard  automobile  (automobile  insurance extended to
higher-risk drivers) and commercial general liability lines of business.

Net  investment  income  decreased  $76  million  or  13%  in  2001,   primarily
attributable  to  the  general  decline  in  interest  rates  during  2001.  Net
investment income increased $93 million or 18% in 2000,  primarily  attributable
to the  combination  of higher  average  investment  yields  (as a result of the
increasing  U.S.  interest  rate  environment   throughout  most  of  2000)  and
repositioning  of the  investment  portfolio to include a higher  proportion  of
fixed maturity securities.


                                       16
<PAGE>
Earnings  (loss)  before  income  taxes  and  cumulative  effect  of  change  in
accounting  principle,  excluding net realized gains on  investments,  decreased
$976  million in 2001,  primarily  attributable  to the increase in the combined
ratio  (including the significant  impact of the events of September 11) and the
decrease in net investment income discussed above.  Earnings before income taxes
and cumulative effect of change in accounting principle,  excluding net realized
gains on investments,  increased $105 million in 2000, primarily attributable to
the decrease in the combined  ratio and the  increase in net  investment  income
discussed above.

International Property and Casualty Business
<TABLE>
<CAPTION>


                                                      Year ended December 31,
                                                  ------------------------------
(In millions)                                      2001       2000        1999
                                                  ------------------------------

<S>                                               <C>        <C>         <C>
Net premiums written............................  $1,864     $2,754      $2,513
Net underwriting loss...........................    (618)      (509)       (238)
Net investment income...........................     303        347         340
Earnings (loss) before income taxes
     and cumulative effect of change in
     accounting principle.......................    (140)       117         211
Net realized gains on investments...............     112        297         101
Earnings (loss) before income taxes and
   cumulative effect of change in accounting
   principle, excluding net realized gains
   on investments...............................    (252)      (180)        110
GAAP ratios (1):
   GAAP claims and claim expense ratio..........   100.5%      91.6%       76.3%
   GAAP underwriting expense ratio..............    38.1%      26.4%       33.6%
                                                   -----      -----       -----
   GAAP combined ratio............................ 138.6%     118.0%      109.9%
                                                   =====      =====       =====
</TABLE>


 (1) Represents  data for the applicable  periods  calculated in accordance with
     GAAP.  Claims and  claim  expense  ratio  represents  incurred  claims  and
     claim expenses as a percentage of net premiums earned. Underwriting expense
     ratio  represents   acquisition  costs  and  other  underwriting   expenses
     (excluding  amortization  of  intangibles,  interest  expense and  minority
     interest in net earnings of consolidated  subsidiaries)  as a percentage of
     net premiums  earned.  The combined ratio  represents the sum of the claims
     and claim expense ratio and the underwriting expense ratio.

Net  premiums  written  decreased  $890  million  or  32%  in  2001,   primarily
attributable  to (1) higher  levels of ceded losses under the  aggregate  excess
retrocession  program  principally as a result of the events of September 11 and
(2) the decision to exit certain lines of business and customer relationships as
part of a reunderwriting initiative undertaken in 2000/2001,  somewhat offset by
general growth in premiums due to the combination of recent hardening of pricing
within the overall  property and casualty  insurance/reinsurance  industry.  Net
premiums written increased $241 million or 10% in 2000,  primarily  attributable
to the combination of hardening pricing within the overall property and casualty
insurance/reinsurance  industry  and the  impact  of a full  year  of  operating
activity  for the March 1999  acquisition  of Eagle Star Re. This  increase  was
somewhat  offset by the 2000  decision to exit  certain  lines of  business  and
customer relationships as part of a reunderwriting  initiative undertaken during
the year.

Consistent with experience in the domestic property and casualty  business,  the
significant  increase in the 2001 combined  ratio is primarily  attributable  to
higher levels of ceded premiums and incurred losses resulting from the events of
September 11.  Excluding  this impact,  the 2001 combined  ratio would have been
114.8%. The relatively high combined ratios in 2001 (excluding the impact of the
events  of  September  11),  2000 and 1999  primarily  reflect  the  effects  of
continued   insufficient  pricing  within  the  overall  property  and  casualty
insurance/reinsurance  industry in recent years and adverse development on prior
year recorded  losses.  The increase in the combined  ratio in 2000 includes the
impact  of  significant  adverse   development   relating  to  certain  European
windstorms occurring late in 1999.

Net  investment  income  decreased  $44  million  or  13%  in  2001,   primarily
attributable  to  the  general  decline  in  interest  rates  during  2001.  Net
investment income increased $7 million or 2% in 2000, primarily  attributable to
the repositioning of the investment  portfolio to include a higher proportion of
fixed maturity securities.


                                       17

<PAGE>
Earnings  (loss)  before  income  taxes  and  cumulative  effect  of  change  in
accounting principle, excluding net realized gains on investments, decreased $72
million in 2001,  primarily  attributable  to the increase in the combined ratio
(including  the  significant  impact  of the  events  of  September  11) and the
decrease in net investment income discussed above.  Earnings before income taxes
and cumulative effect of change in accounting principle,  excluding net realized
gains on investments,  decreased $290 million in 2000, primarily attributable to
the significant increase in the combined ratio discussed above.

Life Reinsurance Business
<TABLE>
<CAPTION>


                                                        Year ended December 31,
                                                       -------------------------
(In millions)                                            2001      2000    1999
                                                       -------------------------

<S>                                                     <C>      <C>      <C>
Revenues.......................................         $2,466   $2,207   $1,789
Earnings before income taxes and cumulative
   effect of change in accounting
   accounting principle .......................            260      238      244
</TABLE>


Revenues,  which consist of net premiums  earned,  net  investment  income,  net
realized gains on investments and other revenues,  including fees generated from
investment-related   life   reinsurance   products  and  financial   reinsurance
transactions, increased $259 million or 12% in 2001. This increase was primarily
attributable to growth in the international traditional life and health business
(principally in Europe and Latin America),  somewhat offset by a decrease in net
realized gains on investments.  Revenues  increased $418 million or 23% in 2000.
This increase was primarily  attributable to growth in the domestic  traditional
life  and  credit  life  business  and an  increase  in net  realized  gains  on
investments.

Earnings  before  income  taxes and  cumulative  effect of change in  accounting
principle increased $22 million or 9% in 2001,  including a $41 million decrease
in  net  realized  gains  on  investments.   Excluding  net  realized  gains  on
investments,  earnings  before income taxes and  cumulative  effect of change in
accounting   principle   increased  $63  million  or  45%  in  2001,   primarily
attributable  to the  increase in revenues  discussed  above and more  favorable
claim  experience  as  compared  to  2000  (particularly  in  the  international
individual  disability  line of  business).  Earnings  before  income  taxes and
cumulative effect of change in accounting  principle  decreased $6 million or 2%
in 2000,  including a $15 million increase in net realized gains on investments.
Excluding net realized gains on  investments,  earnings  before income taxes and
cumulative effect of change in accounting principle decreased $21 million or 13%
in 2000, primarily attributable to an increase in claims experience.

Liquidity and Capital Resources

GE Global  Insurance's  ability to meet its obligations,  including debt service
and operating  expenses,  and pay dividends to its shareholder depends primarily
upon the  receipt of  sufficient  funds  from its  insurance  subsidiaries.  The
payment  of  dividends  by ERC,  GE Re and  Medical  Protective  are  subject to
restrictions set forth in the insurance laws of Missouri,  Illinois and Indiana,
respectively,  as  well  as  other  restrictions.  Historically,  the  Company's
liquidity  requirements have been met by funds provided from operations and from
the maturity and sales of investments.

Cash flows from  operating  activities,  which  primarily  consists  of premiums
collected  during the period and  payments  made for claims and claim  expenses,
increased  $74 million in 2001,  primarily  attributable  to a decrease in claim
settlements  relative  to the  collection  of  premiums,  somewhat  offset by an
increase  in  reinsurance  recoverables  under the  Company's  aggregate  excess
retrocession  programs.  Cash flows from operating  activities  decreased $1,030
million  in  2000,  primarily  as a result  of an  escalation  in  claim-related
payments  attributable to higher levels of incurred claims and claim expenses in
recent years.

Cash flows from investing activities decreased $1,307 million in 2001, primarily
attributable  to a net increase in the purchase of  investment  securities  as a
result of the cash inflows from higher volumes of contract  deposits  within the
life reinsurance operations and the capital contributions  discussed below under
cash flows from  financing  activities.  Cash  flows from  investing  activities
increased $447 million in 2000, primarily  attributable to a net decrease in the
purchases of investment securities as a result of the decrease in operating cash
flows discussed above.


                                       18
<PAGE>
Cash flows from financing  activities  increased $944 million in 2001, primarily
attributable  to an increase  in contract  deposit  liabilities  resulting  from
growth within the life reinsurance  business  segment and capital  contributions
received to replenish  capital  sufficient to cover losses  associated  with the
events of September 11, somewhat offset by a decrease in short-term  borrowings.
Cash flows from financing  activities  increased $520 million in 2000, primarily
attributable to the following factors: (1) an increase in short-term borrowings,
(2) a  reduction  in  dividends  paid on  common  stock and (3) an  increase  in
contract  deposit  liabilities  resulting  from growth in financial  reinsurance
business volumes. The $691 million of proceeds from long-term borrowings in 2000
were  substantially  all used to repay  outstanding  borrowings under an interim
loan  agreement  with GE Capital  Corporation  used to fund the  Company's  1998
acquisition of Medical Protective.

The Company has a one-year  $600  million  revolving  credit  agreement  with GE
Capital Services which enables the Company to borrow from GE Capital Services at
an interest rate per annum equal to GE Capital Services' cost of funds for a one
year period. The agreement is automatically extended for successive terms of one
year each unless terminated in accordance with terms of the agreement. The total
amount outstanding on this credit facility,  including accrued interest payable,
was  $108   million  and  $129  million  as  of  December  31,  2001  and  2000,
respectively.

Off-Balance Sheet Arrangements

The Company has not utilized forms of off-balance  sheet  arrangements,  such as
asset securitizations, involving special purpose entities to facilitate improved
share owner returns and securities transactions,  transfer selected credit risk,
or engage in speculative  activities and has not provided  financial  support to
special purpose entities under any liquidity or credit support agreements.

Investments

General. The Company follows a conservative  investment strategy that emphasizes
maintaining  a high quality  investment  portfolio.  The primary goals include a
growing stream of investment income and improving total investment returns.  All
investments are administered  under  guidelines  established and approved by the
Company's Board of Directors.  The Company's  guidelines  specify credit quality
and  concentration  limits  with  respect  to both  fixed  maturity  and  equity
securities.

In structuring its fixed maturity portfolios, the Company considers the duration
of its  assets  and  claims and claim  expense  reserves.  Most  fixed  maturity
portfolios have total return  benchmarks  against which relative  performance is
measured. The total return benchmarks include investment income and realized and
unrealized  gains and losses on investments.  Equity  portfolios are managed for
total return and performance is measured against equity benchmarks.

On a worldwide basis, based on data as of December 31, 2001, the Company manages
73%  of  its  investments  internally.  GE  Asset  Management  Incorporated,  an
affiliate of the Company, manages an additional 8% of the Company's investments,
and the balance is managed by unaffiliated outside managers.

The Company's investment results are summarized as follows:
<TABLE>
<CAPTION>


                                                                  Year ended December 31,
                                                -----------------------------------------------------------
(In millions)                                     2001         2000         1999        1998         1997
                                                -----------------------------------------------------------

<S>                                             <C>          <C>          <C>          <C>          <C>
Average invested assets (at cost).............  $21,697      $21,197      $20,940      $18,794      $16,417
Net investment income.......................      1,202        1,315        1,151          985          910
Net effective yield.........................        5.5%         6.2%         5.5%         5.2%         5.5%
Net realized gains on investments...........    $   436      $   522      $   699      $   432      $   303
Net unrealized gains on investment securities,
   before deferred income taxes.............         49          244           92        1,554        1,189
</TABLE>


The decrease in unrealized gains on investment securities before deferred income
taxes in 2001 is  primarily  due to the  impact of  realized  gains  recognized,
somewhat offset by the  concentration  of fixed maturity debt securities held in
the investment portfolio and the effects of a general decrease in interest rates
which occurred in 2001.

                                       19
<PAGE>
The Company continues to seek  opportunities to enhance investment yield through
a  conservative,  primarily  fixed  maturity  investment  strategy.  Its current
investment  strategy does not  contemplate  material  additional  investments in
non-investment  grade  debt  securities,   commercial  real  estate,  commercial
mortgages or derivatives.

Domestic  Investment  Operations.  The Company's  domestic property and casualty
investment portfolios are principally invested in tax-exempt state and municipal
bonds,  which the Company believes provide the most attractive  after-tax yield.
The  Company's  domestic  life  investment  portfolios  are largely  invested in
taxable debt securities.

The Company's domestic fixed maturity portfolios, categorized by rating based on
market values, are summarized as follows:
<TABLE>
<CAPTION>


                                                       Domestic Property
                                                         and Casualty               Domestic Life
                                                       -----------------------------------------------
                                                                         December 31,
                                                       -----------------------------------------------
                                                         2001         2000          2001         2000
                                                       -----------------------------------------------

<S>                                                       <C>          <C>          <C>          <C>
U.S. government and government agency securities.....     1.0%         0.5%         2.0%         2.6%
Aaa..................................................    40.5         45.2          2.1          1.7
Aa...................................................    26.0         29.4          9.1          9.0
A....................................................    12.0         10.8         29.3         27.9
Baa..................................................     2.0          1.5         13.1         13.1
Ba...................................................     0.5          0.5          1.1          0.8
Canadian securities..................................     4.1          3.6         10.1          7.2
Mortgage-backed and other asset-backed securities....    11.1          6.7         32.0         36.0
Other................................................     2.8          1.8          1.2          1.7
                                                        -----        -----        -----        -----
   Total.............................................   100.0%       100.0%       100.0%       100.0%
                                                        =====        =====        =====        =====
</TABLE>


Ratings are as assigned by Moody's when  available,  or by S&P and  converted to
the generally comparable Moody's rating.

The  Company's  emphasis on  investment  quality is evidenced  by the  preceding
table, which indicates that the bonds in the Company's investment portfolios are
principally  invested in either U.S. government and government agency securities
or issues rated "Baa" or above. The Canadian  securities held by the Company are
similar in quality to the other securities held in its domestic portfolio. Fixed
maturity  securities held by the Company in its domestic life portfolios include
mortgage-backed  and  other  asset-backed  securities  that are  matched  to the
liability  profile  of  specific  life  reinsurance  contracts.  Investments  in
mortgage-backed  and other  asset-backed  securities  are  limited to lower risk
tranches and do not include any  interest  only or  principal  only  securities.
Mortgage-backed  and other asset-backed  securities in the Company's  investment
portfolio  were  principally  issued by Federal  agencies.  The  majority of the
balance of other securities held in both the domestic  property and casualty and
domestic life portfolios represent investments in non-rated debt securities. The
Company does not contemplate significant additional investment in non-investment
grade securities in either the property and casualty or life portfolios.

International Investment Operations.  The investment portfolios of the Company's
international  operations  (other  than  certain  equity  portfolios,  which are
managed  by  outside  managers)  are  managed  by the  GE  Frankona  Re  Group's
investment  personnel  based in Munich,  within  guidelines  established  by the
management  of the GE Frankona Re Group and under the  overall  supervision  and
review of ERC's investment department.

The principal  objective of the GE Frankona Re Group's  investment  policy is to
manage  the   investment   portfolios  on  a  total  return  basis  taking  into
consideration the duration and currency  structure of the GE Frankona Re Group's
reinsurance  liabilities.  The GE Frankona Re Group's investment  portfolios are
geographically  diversified with investments principally from the major European
markets and the United States.

                                       20

<PAGE>
As of  December  31,  2001,  the  fair  value  of the  GE  Frankona  Re  Group's
investments totaled $6,597 million, a decrease of $143 million from December 31,
2000.  The  composition  of GE Frankona Re Group's  investments is summarized as
follows:
<TABLE>
<CAPTION>


                                                                  December 31,
                                                                ----------------
                                                                  2001     2000
                                                                ----------------

<S>                                                               <C>      <C>
          Fixed maturity securities............................   89.1%    89.5%
          Equity securities....................................    8.1      7.5
          Other invested assets................................    2.8      3.0
                                                                 -----    -----
          Total................................................  100.0%   100.0%
                                                                 =====    =====
</TABLE>


Most fixed  maturity  securities  within the GE Frankona  Re Group's  investment
portfolios  have a term of less than ten years.  The fixed  maturity  securities
consist of high credit quality  securities,  and almost all bonds are investment
grade securities with a comparable average rating equal to or above a Moody's or
S&P  "AA"  rating.   Fixed  maturity   securities   include  German  and  Danish
mortgage-backed  securities,  although  these  mortgage-backed  securities  have
significantly less prepayment risk than typical U.S. mortgage-backed securities,
as the German and Danish tax and social  environments are not conducive to risks
of prepayment of interest and  principal.  Equity  securities and other invested
assets were internationally  diversified with principal holdings in Germany, the
United Kingdom and the United States.

Interest Rate and Currency Risk Management

Interest rate and currency risk  management is important in the normal  business
activities  of GE  Global  Insurance.  The  Company  uses  derivative  financial
instruments  to  mitigate  or  eliminate  certain  financial  and market  risks,
including  those  related to changes in  interest  rates and  currency  exchange
rates.  As a matter of  policy,  the  Company  does not  engage  in  derivatives
trading,   derivatives  market-making  or  other  speculative  activities.  More
detailed  information  regarding  these  financial   instruments,   as  well  as
strategies  and  policies  for their use, is  contained in notes 2 and 14 to the
consolidated financial statements.

The Company manages its exposure to currency  principally by matching investment
assets with the underlying  reinsurance  liabilities.  Any remaining significant
net  asset/liability  positions  in a given  currency  are hedged  with  forward
currency purchase or sale contracts to further mitigate currency exposures.  The
Company also hedges its  currency  risk by utilizing  cross  currency  swaps and
currency   forwards.   The  Company  manages  its  exposure  to  interest  rates
principally by matching  floating rate liabilities with  corresponding  floating
rate assets and by matching fixed rate liabilities with corresponding fixed rate
assets.  Certain of the products reinsured within the life segment include fixed
rate interest rate  features that are matched with fixed rate  investments  of a
similar duration.

On a limited basis, and as part of ongoing customer activities, the Company uses
equity options to minimize its exposure to movements in equity markets that have
a direct correlation with certain of its reinsurance products. Additionally, the
Company has entered into a limited  number of credit default swaps to lessen its
exposure on certain financial guarantee reinsurance business.

Substantially all derivative transactions are executed by the Company's Treasury
Department,  which works closely with GE Capital Treasury  personnel to maintain
controls on all exposures, adhere to stringent counterparty credit standards and
actively  monitor  marketplace  exposures.  Although  the  Company is exposed to
credit risk that the  counterparty  may not be able to comply with the terms and
conditions of the contracts,  the Company uses only highly rated institutions as
counterparties to the derivative transactions.

The U.S.  Securities and Exchange  Commission  requires that registrants provide
information  about  potential  effects of changes in interest rates and currency
exchange. Although the rules offer alternatives for presenting this information,
none of the  alternatives is without  limitations.  The following  discussion is
based on  so-called  "shock  tests,"  which model  effects of interest  rate and
currency shifts on the reporting  company.  Shock tests, while probably the most
meaningful analysis permitted, are constrained by several factors, including the
necessity to conduct the  analysis  based on a single point in time and by their
inability to include the complex market reactions that normally would arise from
the market  shifts  modeled.  While the  following  results  of shock  tests for
interest  rates and  currencies  may have some limited use as  benchmarks,  they
should not be viewed as forecasts.


                                       21

<PAGE>
     One  means  of   assessing   exposure  to  interest   rate   changes  is  a
     duration-based  analysis that  measures the potential  loss in net earnings
     resulting  from a  hypothetical  decrease  in  interest  rates of 100 basis
     points across all maturities (sometimes referred to as a "parallel shift in
     the yield curve"). Under this model with all else constant, it is estimated
     that such a decrease,  including  repricing  in the  securities  portfolio,
     would  reduce the 2002 net earnings of the Company  based on year-end  2001
     positions by an insignificant  amount. Based on positions at year-end 2000,
     the pro forma  effect on 2001 net  earnings  of such a decrease in interest
     rates was also estimated to be an insignificant amount.

     The geographic  distribution  of the Company's  operations is diverse.  One
     means of  assessing  exposure to changes in currency  exchange  rates is to
     model effects on reported earnings using a sensitivity  analysis.  Year-end
     2001  consolidated  currency  exposures,  including  financial  instruments
     designated  and  effective  as hedges,  were  analyzed to identify  Company
     assets and liabilities  denominated in other than their relevant functional
     currencies.  Net unhedged  exposures in each currency were then  remeasured
     assuming  a  10  percent  decrease  (substantially  greater  decreases  for
     hyperinflationary  currencies) in currency exchange rates compared with the
     U.S. dollar.  Under this model,  management estimated at year-end 2001 that
     such a decrease would have an insignificant  effect on 2002 earnings of the
     Company.

Cyclicality

The  property  and  casualty  reinsurance  industry  has been  highly  cyclical.
Underwriting  results of primary property and casualty  insurance  companies and
prevailing  general  economic  and  reinsurance   premium  rates   significantly
influences  demand for reinsurance.  The cyclical trends in the industry and the
industry's  profitability  can also be affected  significantly  by volatile  and
unpredictable developments, including changes in what the Company believes to be
the  propensity  of courts to grant large  awards,  natural  disasters and other
catastrophic events (such as hurricanes, windstorms,  earthquakes, floods, fires
and,  as  experienced  in 2001,  intentional  events  such as  terrorist  acts),
fluctuations  in interest rates and other changes in the investment  environment
which affect  inflationary  pressures that may tend to affect the size of losses
experienced by ceding primary insurance companies.

Effects of Inflation

The Company's  ultimate claims and claim expense costs on claims not yet settled
is  increased by the effects of  inflation,  and changes in the  inflation  rate
therefore could become a significant  factor in determining  appropriate  claims
and claim expense reserves, as well as reinsurance premium rates. Generally, the
Company's  methods  used to estimate  claims and claim  expense  reserves and to
calculate reinsurance premium rates take into account the anticipated effects of
inflation in estimating the ultimate claims and claim expense costs. The Company
uses both insurance industry data and government  economic indices in estimating
the  effects of  inflation  on  reinsurance  premium  rates and claims and claim
expense reserves.  However, until claims are ultimately settled, the full effect
of inflation on the Company's results cannot be known.

Critical Accounting Policies

High quality financial  statements require rigorous  application of high quality
accounting  policies.  The policies discussed below are considered by management
critical to an understanding of the Company's financial statements because their
application places the most significant demands on management's  judgment,  with
reporting  results  relying on  estimation  about the effect of matters that are
inherently uncertain.  Specific risks for these critical accounting policies are
described in the following  paragraphs.  For all of these  policies,  management
cautions  that future events rarely  develop  exactly as forecast,  and the best
estimates routinely require adjustment.

Insurance  related  liabilities  and reserves differ for short and long duration
insurance  contracts.  Short-duration  contracts  such as property  and casualty
policies are  accounted  for based on actuarial  estimates of the amount of loss
inherent in that period's claims, including losses for which claims have not yet
been  reported.   Short-duration  contract  loss  estimates  rely  on  actuarial
observations  of  ultimate  loss  experience  for  similar   historical  events.
Measurement of long-duration  insurance liabilities (such as term and whole life
insurance  policies)  also  is  based  on  approved  actuarial  techniques,  but
necessarily includes  assumptions about mortality,  lapse rates and future yield
on related investments. The Company's insurance related liabilities and reserves
totaled $31 billion at year-end 2001. Of that total,  approximately  $20 billion
related to unpaid  claims  and claims  adjustment  expenses  for  short-duration
insurance  coverage.  As  discussed on page 14, there has been a recent shift in
the source of adverse loss development away from property to liability coverage.
Management  continually  evaluates the potential for changes in loss  estimates,
both positive and negative,  and uses the results of these  evaluations  both to
adjust  recorded  provisions  and to adjust  underwriting  criteria  and product
offerings. The potential for further adverse loss

                                       22

<PAGE>
development  in these  areas is  highly  uncertain.  Further  information  about
insurance  liabilities  is  provided  in  note 6 to the  consolidated  financial
statements.

Impairment of  investment  securities  results in a charge to operations  when a
market decline below cost is other than temporary.  Management regularly reviews
each  investment  security  for  impairment  based on criteria  that include the
extent to which cost exceeds  market value,  the duration of that market decline
and the financial health of and specific prospects for the issuer. The Company's
investment  securities  amounted to approximately  $22 billion at year-end 2001.
Gross  unrealized  gains and losses  included in that carrying amount related to
debt  securities  were  $317  million  and  $249  million,  respectively.  Gross
unrealized  gains and  losses  of equity  securities  were $19  million  and $38
million,  respectively.  Of thoses securities whose carrying amount exceeds fair
value at year-end 2001,  and based on  application  of the Company's  accounting
policy for impairment,  approximately  $30 million of portfolio value is at risk
of  being  charged  to  earnings  in  2002.   The  Company   actively   performs
comprehensive  market  research,  monitors  market  conditions  and segments its
investments  by  credit  risk in order to  minimize  impairment  risks.  Further
information  is  provided  in  notes  2  and  4 to  the  consolidated  financial
statements and pages 19-21, which discusses the investment securities portfolio.

Provision for uncollectible premium receivables and reinsurance recoverables are
recognized  when  they  are  incurred.   Measurement  of  such  losses  requires
consideration  of historical loss  experience,  including the need to adjust for
current  conditions,  and  judgments  about the  probable  effects  of  relevant
observable  data,  including  present  economic  conditions  such as delinquency
rates, financial health of specific customers, collateral value (such as letters
of credit and funds held  balances) and legal  right-of-offset  of related claim
liabilities.  The Company's  exposure to uncollectible  premium  receivables and
reinsurance recoverables was approximately $15 billion at year-end 2001, against
which an allowance for losses of approximately $159 million was provided.  While
collection  prospects  depend to a large  degree on future  economic  conditions
(including the impact of future claims experience), management does not forecast
significant  receivable  write-offs in 2002. Further  information is provided in
notes 2 and 6 to the consolidated financial statements.

Other  significant   accounting  policies,  not  involving  the  same  level  of
measurement  uncertainties as those discussed above, are nevertheless  important
to an  understanding  of the financial  statements.  Policies related to revenue
recognition,  financial  instruments and consolidation  policy require difficult
judgments  on complex  matters  that are often  subject to  multiple  sources of
authoritative  guidance.  Certain of these  matters are among  topics  currently
under reexamination by accounting standards setters and regulators.  Although no
specific  conclusions reached by these standard setters appear likely to cause a
material change in the  Corporation's  accounting  policies,  outcomes cannot be
predicted with  confidence.  Also see note 2, Summary of Significant  Accounting
Policies,   which  discusses  accounting  policies  that  must  be  selected  by
management when there are acceptable alternatives.

New Accounting Standards

Major  provisions of new  accounting  standards  that may be  significant to the
Company's  financial  statements  in the future are  described in the  following
paragraphs.

Statement of Financial Accounting Standards ("SFAS") 141, Business Combinations,
and SFAS 142,  Goodwill and Other Intangible  Assets,  modify the accounting for
business  combinations,  goodwill  and  identifiable  intangible  assets.  As of
January 1, 2002,  all goodwill and  indefinite-lived  intangible  assets must be
tested for impairment and a transition adjustment will be recognized. Management
believes no goodwill  impairment  will be recognized  under these new standards.
Amortization of goodwill will cease as of January 1, 2002, and, thereafter,  all
goodwill  and any  indefinite-lived  intangible  assets  must be tested at least
annually for impairment.  The effect of the non-amortization  provisions on 2002
operations will be affected by 2002 acquisitions and cannot be forecast,  but if
these rules had applied to goodwill in 2001,  management believes that full year
2001 net earnings would have increased by approximately $81 million.

SFAS 143, Accounting for Asset Retirement  Obligations,  requires recognition of
the fair value of  obligations  associated  with the  retirement  of  long-lived
assets  when there is a legal  obligation  to incur such  costs.  This amount is
accounted for like an additional element of the corresponding  asset's cost, and
is depreciated over that asset's useful life. SFAS 143 will be effective for the
Company on January 1, 2003.  Management  has not yet  determined  the effects of
adopting  this  standard  on the  Company's  financial  position  and results of
operations.


                                       23


<PAGE>
Item 7A.  Quantitative and Qualitative Disclosures About Market Risk.

Information  about  potential  effects of changes in interest rates and currency
exchange on the Company is discussed on pages 21-22.


Item 8.  Financial Statements and Supplementary Data.

The Company's  Consolidated  Financial Statements and the Independent  Auditors'
Report thereon and the Supplementary Financial Statement Schedules listed on the
accompanying Index to Financial Statements and Financial Statement Schedules are
filed as part of this report.


Item  9.  Changes  in and  Disagreements  with  Accountants  on  Accounting  and
          Financial Disclosure.

Not applicable.



                                    PART III


Item 10.    Directors and Executive Officers of the Registrant.

Omitted


Item 11.    Executive Compensation.

Omitted


Item 12.    Security Ownership of Certain Beneficial Owners and Management.

Omitted


Item 13.    Certain Relationships and Related Transactions.

Omitted






                                       24





<PAGE>

                                     PART IV


Item 14.  Exhibits, Financial Statement Schedules and Reports on Form 8-K.

   (a) 1.  Financial Statements and Schedules.

           The consolidated financial statements of the Company filed as part of
           this  report  are  listed  in  the Index  to  Consolidated  Financial
           Statements and Financial Statement Schedules (page 27).

   (a) 2.  Financial Statement Schedules.

           The  consolidated  financial statement schedules of the Company filed
           as part of  this  report  are  listed  in  the  Index to Consolidated
           Financial Statements and Financial Statement Schedules (page 27).

   (a) 3.  Listing of Exhibits.

           3.1    A  complete copy of  the  Articles  of  Incorporation  of  the
                  Company,  as last amended on  August 30, 1995,  and  currently
                  in  effect.  (Incorporated  by reference to Exhibit 3.1 of the
                  Company's Form 10-K for the year ended December 31, 1995.)

           3.2    A  complete  copy  of  the By-laws of  the  Company,  as  last
                  amended  on  February  26,  1995,  and  currently  in  effect.
                  (Incorporated  by  reference  to Exhibit 3.2 of the  Company's
                  Registration Statement on Form 10, File No. 0-27394.)

           10.1   Whole   Account   Aggregate   Excess  of   Loss   Retrocession
                  Reinsurance    Agreement,   between    Employers   Reinsurance
                  Corporation  and  National Indemnity Company, dated January 1,
                  2001  (material   omitted   and   separately  filed  with  the
                  Securities and Exchange Commission  pursuant  to a request for
                  confidential treatment).

           10.2   Whole   Account    Aggregate   Excess  of  Loss   Retrocession
                  Reinsurance   Agreement,    between    Employers   Reinsurance
                  Corporation and Scandinavian  Reinsurance  Company Ltd., dated
                  January 1, 2001 (material  omitted  and  separately filed with
                  the Securities and Exchange Commission  pursuant  to a request
                  for confidential treatment).

           10.3   Whole   Account   Aggregate   Excess  of   Loss   Retrocession
                  Reinsurance    Agreement,    between   Employers   Reinsurance
                  Corporation  and  National  Union  Fire  Insurance  Company of
                  Pittsburgh,  PA, dated  January 1, 2001  (material omitted and
                  separately filed  with  the Securities and Exchange Commission
                  pursuant to a request for confidential treatment).


           10.4   Whole   Account   Aggregate   Excess  of   Loss   Retrocession
                  Reinsurance   Agreement,   between    Employers    Reinsurance
                  Corporation  and  Underwriters  Reinsurance Company (Barbados)
                  Inc., dated  January 1, 2001  (material omitted and separately
                  filed with the  Securities and  Exchange  Commission  pursuant
                  to a request for confidential treatment).

           12     Computation of ratio of earnings to fixed charges.


    (b)    Reports on Form 8-K.

           None.


                                       25
<PAGE>


                                   ITEM 14(a)

                     GE Global Insurance Holding Corporation
                                and Subsidiaries

                                    Index to
                        Consolidated Financial Statements
                                       and
                          Financial Statement Schedules


                                                                            Page
                                                                            ----
Consolidated Financial Statements
   Independent Auditors' Report..............................................27
   Consolidated Statement of Earnings........................................28
   Consolidated Statement of Financial Position..............................29
   Consolidated Statement of Stockholder's Equity............................31
   Consolidated Statement of Cash Flows......................................32
   Notes to Consolidated Financial Statements................................33

Financial Statement Schedules
   Schedule II - Condensed Financial Information of Registrant...............58
   Schedule III - Supplementary Insurance Information........................62



                                       26
<PAGE>



                          INDEPENDENT AUDITORS' REPORT


The Board of Directors and Stockholder
GE Global Insurance Holding Corporation:


We have audited the accompanying  consolidated  statements of financial position
of GE Global Insurance  Holding  Corporation and subsidiaries as of December 31,
2001  and  2000,   and  the  related   consolidated   statements   of  earnings,
stockholder's  equity  and cash  flows for each of the  years in the  three-year
period  ended  December  31,  2001.  In  connection   with  our  audits  of  the
consolidated  financial  statements,  we also  audited the  financial  statement
schedules listed in the Index at Item 14(a) as of December 31, 2001 and 2000 and
for each of the years in the three-year  period ended  December 31, 2001.  These
consolidated  financial  statements and schedules are the  responsibility of the
Company's  management.  Our  responsibility  is to  express  an opinion on these
consolidated financial statements and financial statement schedules based on our
audits.

We conducted our audits in accordance with auditing standards generally accepted
in the  United  States of  America.  Those  standards  require  that we plan and
perform the audit to obtain  reasonable  assurance  about  whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material respects,  the financial position of GE Global Insurance
Holding  Corporation and  subsidiaries as of December 31, 2001 and 2000, and the
results  of their  operations  and their cash flows for each of the years in the
three-year  period ended  December  31,  2001,  in  conformity  with  accounting
principles  generally  accepted in the United  States of America.  Also,  in our
opinion, the related financial statement schedules,  when considered in relation
to the basic consolidated financial statements taken as a whole, present fairly,
in all material respects, the information set forth therein.

As discussed in note 2 to the consolidated financial statements,  the Company in
2001 changed its method of accounting  for  derivative  instruments  and hedging
activities.

                                                                        KPMG LLP


Kansas City, Missouri
January 24, 2002



                                       27

<PAGE>

                     GE GLOBAL INSURANCE HOLDING CORPORATION
                                AND SUBSIDIARIES

                       Consolidated Statement of Earnings
<TABLE>
<CAPTION>



                                                                             Year ended December 31,
                                                                         -------------------------------
(In millions)                                                             2001        2000        1999
                                                                         -------------------------------
<S>                                                                      <C>        <C>          <C>
Revenues
Net premiums written                                                     $7,392     $ 8,191      $7,147
                                                                         ======      ======      ======

Net premiums earned                                                      $7,185     $ 8,001      $6,896
Net investment income                                                     1,202       1,315       1,151
Net realized gains on istments                                              436         522         699
Other revenues                                                              368         293         285
                                                                         ------     -------      ------
Total revenues                                                            9,191      10,131       9,031
                                                                         ------     -------      ------

Costs and Expenses
Claims, claim expenses and policy benefits                                6,975       6,727       5,385
Insurance acquisition costs                                               1,830       1,913       1,839
Amortization of intangibles                                                  92         143         111
Interest expense                                                            102         126         102
Other operating costs and expenses                                          569         529         518
Minority interest in net earnings of consolidated
   subsidiaries                                                              89          88          88
                                                                         ------     -------      ------
Total costs and expenses                                                  9,657       9,526       8,043
                                                                         ------     -------      ------

Earnings (loss) before income taxes and cumulative effect of
   change in accounting principle                                          (466)        605         988
                                                                         ------     -------      ------

Provision for income taxes:
   Current                                                                 (297)       (109)        216
   Deferred                                                                  15         133          52
                                                                         ------     -------      ------
                                                                           (282)         24         268
                                                                         ------     -------      ------
Earnings (loss) before cumulative effect of change in
   accounting principle                                                    (184)        581         720
                                                                         ------     -------      ------

Cumulative effect of change in accounting principle                         (11)          -           -
                                                                         ------     -------      ------

Net earnings (loss)                                                      $ (195)    $   581      $  720
                                                                         ======     =======      ======
</TABLE>


See Notes to Consolidated Financial Statements.


                                       28

<PAGE>

                     GE GLOBAL INSURANCE HOLDING CORPORATION
                                AND SUBSIDIARIES

                  Consolidated Statement of Financial Position
<TABLE>
<CAPTION>



                                                                                        December 31,
                                                                                -------------------------
(In millions)                                                                      2001             2000
                                                                                -------------------------
<S>                                                                              <C>              <C>
Assets
Investments:
   Fixed maturity securities available-for-sale, at fair value                   $19,769          $18,761
   Equity securities, at fair value                                                  641              718
   Short-term investments, at amortized cost                                       1,748            1,348
   Other invested assets                                                             337              364
                                                                                 -------          -------
   Total investments                                                              22,495           21,191

Cash                                                                                 470              196

Securities and indebtedness of related parties                                       296              676

Accrued investment income                                                            386              407

Premiums receivable                                                                4,376            3,844

Funds held by reinsured companies                                                    720              740

Reinsurance recoverables                                                          10,367            6,436

Deferred insurance acquisition costs                                               1,615            1,494

Intangible assets                                                                  1,585            1,640

Other assets                                                                       2,808            1,940
                                                                                 -------          -------

Total assets                                                                     $45,118          $38,564
                                                                                 =======          =======
</TABLE>


                                       29

<PAGE>
<TABLE>
<CAPTION>



                                                                                      December 31,
                                                                                --------------------------
(In millions)                                                                     2001               2000
                                                                                --------------------------
<S>                                                                             <C>               <C>

Liabilities and equity
Claims and claim expenses                                                       $22,033           $17,678
Accumulated contract values                                                       2,909             2,161
Future policy benefits for life and health contracts                              2,965             2,636
Unearned premiums                                                                 2,763             2,584
Other reinsurance balances                                                        2,935             2,062
Contract deposit liabilities                                                        915             1,169
Other liabilities                                                                 1,181               840
Long-term borrowings                                                              1,655             1,654
Indebtedness to related parties                                                     217               578
                                                                                -------           -------
   Total liabilities                                                             37,573            31,362
                                                                                -------           -------

Minority interest in equity of consolidated
   subsidiaries                                                                   1,183             1,177
                                                                                -------           -------

Preferred stock, $100,000 par value; authorized,
   issued and outstanding - 1,500 shares                                            150               150
Common stock, $5,000 par value; authorized,
   issued and outstanding - 1,000 shares                                              5                 5
Paid-in capital                                                                   1,425               845
Retained earnings                                                                 5,002             5,204
Accumulated unrealized gains on investment securities - net (a)                      23               143
Accumulated foreign currency translation adjustments (a)                           (241)             (322)
Derivatives qualifying as hedges (a)                                                 (2)                -
                                                                                -------           -------
   Total stockholder's equity                                                     6,362             6,025
                                                                                -------           -------

Total liabilities and equity                                                    $45,118           $38,564
                                                                                =======           =======
</TABLE>


(a)  The  sum  of  accumulated   unrealized  gains  on  investment   securities,
     accumulated  foreign  currency  translation   adjustments  and  derivatives
     qualifying  as  hedges  constitutes  "Accumulated  nonowner  changes  other
     than earnings," as shown in  the  Consolidated  Statement of  Stockholder's
     Equity,  and  was $(220) million  and $(179) million  at year-end  2001 and
     2000, respectively.

See Notes to Consolidated Financial Statements.


                                       30

<PAGE>

                     GE GLOBAL INSURANCE HOLDING CORPORATION
                                AND SUBSIDIARIES

                 Consolidated Statement of Stockholder's Equity
<TABLE>
<CAPTION>


                                                                                                           Accumulated
                                                                                                            Nonowner
                                                                                                             Changes
                                                                Preferred   Common   Paid-In    Retained   Other Than
(In millions)                                                     Stock     Stock    Capital    Earnings    Earnings      Total
                                                                --------------------------------------------------------------------

<S>                                                                <C>        <C>    <C>          <C>         <C>         <C>
Balances, January 1, 1999                                          $150       $5     $  845       $4,161      $859        $6,020
   Changes other than transactions with share owner:
     Net earnings                                                     -        -          -          720         -           720
     Net unrealized losses on investment securities (a)               -        -          -            -      (408)         (408)
     Foreign currency translation adjustments (b)                     -        -          -            -       (33)          (33)
     Reclassification adjustments (c)                                 -        -          -            -      (473)         (473)
                                                                                                                           -----
       Total changes other than transactions with share owner                                                               (194)
                                                                                                                           -----


   Dividends paid on preferred stock                                  -        -          -           (8)        -            (8)
   Dividends paid on common stock                                     -        -          -         (243)        -          (243)
                                                                   ----       --     ------       ------     -----        ------

Balances, December 31, 1999                                         150        5        845        4,630       (55)        5,575
                                                                                                                          ------
   Changes other than transactions with share owner:
     Net earnings                                                     -        -          -          581         -           581
     Net unrealized gains on investment securities (a)                -        -          -            -       452           452
     Foreign currency translation adjustments (b)                     -        -          -            -      (216)         (216)
     Reclassification adjustments  (c)                                -        -          -            -      (360)         (360)
                                                                                                                          ------
        Total changes other than transactions with share owner                                                               457
                                                                                                                          ------

   Dividends paid on preferred stock                                  -        -          -           (7)        -            (7)
                                                                   ----       --      -----       ------     -----        ------

Balances, December 31, 2000                                         150        5        845        5,204      (179)        6,025
                                                                                                                          ------
   Changes other than transactions with share owner:
     Capital contribution received                                    -        -        580            -         -           580
     Net loss                                                         -        -          -         (195)        -          (195)
     Net unrealized gains on investment securities (a)                -        -          -            -       162           162
     Foreign currency translation adjustments (b)                     -        -          -            -        81            81
     Derivatives qualifying as hedges (d)                             -        -          -            -        (2)           (2)
     Reclassification adjustments (c)                                 -        -          -            -      (282)         (282)
                                                                                                                          ------
        Total changes other than transactions with share owner                                                               344
                                                                                                                          ------

   Dividends paid on preferred stock                                  -        -          -           (7)        -            (7)
                                                                   ----       --     ------       ------     -----        ------

Balances, December 31, 2001                                        $150       $5     $1,425       $5,002     $(220)       $6,362
                                                                   ====       ==     ======       ======     =====        ======
</TABLE>


(a)  Presented net of taxes of $(78) million, $(195) million and $233 million in
     2001, 2000 and 1999, respectively.

(b)  Presented  net of taxes of $(62)  million,  $113 million and $17 million in
     2001, 2000 and 1999, respectively.

(c) Presented  net of taxes of $154  million,  $189 million and  $274 million in
    2001,  2000 and 1999,  respectively.  (Note:  In addition  to  net  realized
    gains  on   investment  securities,   the  2000  and  1999  reclassification
    adjustments  include $27 million and $48 million,  respectively,  in pre-tax
    gains  related  to  available-for-sale  investment  securities  held  by  an
    investee  accounted for under the equity method;  these gains were  included
    in other revenues in the accompanying  consolidated statement of  earnings.)
    (d) Presented net of taxes of $1 million in 2001.

See Notes to Consolidated Financial Statements.

                                     Page 31
<PAGE>
<TABLE>
<CAPTION>

                     GE GLOBAL INSURANCE HOLDING CORPORATION
                                AND SUBSIDIARIES

                      Consolidated Statement of Cash Flows

                                                                              Year ended December 31,
                                                                         -------------------------------
(In millions)                                                               2001      2000      1999
                                                                        -------------------------------
<S>                                                                     <C>          <C>       <C>

Cash Flows From Operating Activities
Net earnings (loss)                                                     $   (195)    $  581    $   720
Adjustments to reconcile net earnings (loss) to cash
     from (used for) operating activities:
         Claims and claim expenses                                         3,863      1,084      1,574
         Future policy benefits for life and health contracts                271        589        182
         Unearned premiums                                                   129        207        400
         Funds held by reinsured companies                                    47       (103)         5
         Reinsurance recoverables                                         (3,697)    (1,579)    (1,409)
         Deferred income taxes                                                15        133         52
         Income taxes payable (receivable)                                  (133)      (120)        10
         Amortization of insurance acquisition costs                       1,830      1,913      1,839
         Insurance acquisition costs deferred                             (1,916)    (2,200)    (1,915)
         Net realized gains on investments                                  (436)      (522)      (699)
         Other, net                                                          155       (124)       130
                                                                         -------    -------    -------
     Cash from (used for) operating activities                               (67)      (141)       889
                                                                         -------    -------    -------

Cash Flows From Investing Activities
Fixed maturity securities available-for-sale:
     Purchases                                                           (17,706)    (9,823)    (7,995)
     Sales                                                                14,797      7,235      6,399
     Maturities                                                            2,337        940      1,566
Equity securities:
     Purchases                                                              (459)    (1,175)    (2,812)
     Sales                                                                   191      3,522      2,812
Net purchases of short-term investments                                     (400)      (560)      (216)
Net cash paid for acquisitions and in-force reinsurance
     transactions                                                              -          -       (258)
Net cash received from dispositions                                            -          -         88
Other investing activities                                                   100         28        136
                                                                         -------    -------    -------
     Cash from (used for) investing activities                            (1,140)       167       (280)
                                                                         -------    -------    -------

Cash Flows From Financing Activities
Change in contract deposits                                                  (33)        38       (171)
Net contract accumulation payments                                           746          6        (87)
Proceeds from short-term borrowings                                          289        105        132
Principal payments on short-term borrowings                                 (339)      (721)      (426)
Proceeds from long-term borrowings                                             -        691        395
Capital contribution received                                                400          -          -
Dividends paid                                                                (7)        (7)      (251)
                                                                         -------    -------    -------
     Cash from (used for) financing activities                             1,056        112       (408)
                                                                         -------    -------    -------

Effect of exchange rate changes on cash                                      425       (301)      (100)
                                                                         -------    -------    -------

Increase (decrease) in cash                                                  274       (163)       101
Cash at beginning of year                                                    196        359        258
                                                                         -------     ------    -------
Cash at end of year                                                      $   470     $  196    $   359
                                                                         =======     ======    =======
</TABLE>


See Notes to Consolidated Financial Statements.


                                       32

<PAGE>


                     GE GLOBAL INSURANCE HOLDING CORPORATION
                                AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements


1.   Basis of Presentation

Principles of Consolidation

GE  Global  Insurance   Holding   Corporation  ("GE  Global   Insurance")  is  a
wholly-owned  subsidiary of General Electric Capital Services, Inc. ("GE Capital
Services"),  which is a wholly-owned subsidiary of General Electric Company ("GE
Company").  The  accompanying  consolidated  financial  statements  of GE Global
Insurance include the accounts and operations,  after intercompany eliminations,
of  GE  Global  Insurance,   Employers   Reinsurance   Corporation  ("ERC"),  GE
Reinsurance  Corporation  ("GE Re" - formerly  Kemper  Reinsurance  Company) and
Medical  Protective  Corporation  ("Medical  Protective").  ERC  and  GE Re  are
reinsurance  companies and Medical Protective is an insurance company, with each
having various property and casualty  insurance/reinsurance and life reinsurance
subsidiaries.  GE Global  Insurance  owns 100% of the common stock of ERC, GE Re
and Medical Protective,  representing 89.5%, 100% and 100% of ERC's, GE Re's and
Medical  Protective's  voting rights,  respectively.  General  Electric  Capital
Corporation ("GE Capital Corporation" - a wholly-owned  subsidiary of GE Capital
Services) owns 100% of ERC's preferred stock, representing 10.5% of ERC's voting
rights.  GE Global Insurance and its consolidated  subsidiaries are collectively
referred to as "the Company."

Other affiliates, generally companies in which the Company owns 20 to 50 percent
of the voting rights or otherwise  has  significant  influence,  are included in
other invested assets and valued at the  appropriate  share of equity plus loans
and advances.

Basis of Accounting

The  accompanying  consolidated  financial  statements have been prepared on the
basis of  accounting  principles  generally  accepted  in the  United  States of
America  ("GAAP"),  which, as to the insurance company  subsidiaries,  vary from
statutory  accounting  practices prescribed or permitted by insurance regulatory
authorities.  The  preparation of financial  statements in conformity  with GAAP
requires  management to make  estimates  and  assumptions  that affect  reported
amounts  and  related  disclosures.  Actual  results  could  differ  from  those
estimates.

Certain  reclassifications  of prior year  balances have been made to conform to
the current year presentation.

2.   Summary of Significant Accounting Policies

Investments

Substantially  all of the Company's  fixed  maturity  securities  and marketable
equity securities have been designated as  available-for-sale,  and are reported
at fair value with net unrealized  gains or (losses)  included in  stockholder's
equity,  net of applicable  taxes and certain other  adjustments.  Such reported
fair values are based primarily on quoted market prices or, if quoted prices are
not available, are valued by third party pricing vendors.  Investment securities
are regularly  reviewed for impairment based on criteria that include the extent
to which cost exceeds  market value,  the duration of the market decline and the
financial  health of and specific  prospects for the issuer.  Realized  gains or
(losses) on sales of investments  are determined on the  specific-identification
method and include  adjustments to the net realizable  value of investments  for
declines in value that are  considered  to be other than  temporary.  Investment
income is  recognized  as earned and  includes the  accretion  of discounts  and
amortization of premiums related to fixed maturity securities.


                                       33

<PAGE>

                     GE GLOBAL INSURANCE HOLDING CORPORATION
                                AND SUBSIDIARIES

             Notes to Consolidated Financial Statements (continued)


2.   Summary of Significant Accounting Policies (continued)

Property and Casualty Insurance/Reinsurance Segment

Premiums   are   reported   as   earned   over   the   terms   of  the   related
insurance/reinsurance  treaties or  policies.  In general,  earned  premiums are
calculated on a pro rata basis,  are determined  based on reports  received from
reinsureds or are estimated if reports are not received timely from  reinsureds.
Premium  adjustments  under  retrospectively  rated  reinsurance  contracts  are
recorded based on estimated  claims and claim expenses,  including both case and
incurred but not yet reported liabilities.

Certain insurance acquisition costs, principally commissions, brokerage expenses
and premium taxes,  are deferred and amortized over the contract period in which
the related  premiums are earned.  Future  investment  income is  considered  in
determining the recoverability of deferred insurance acquisition costs.

The  liabilities   for  claims  and  claim  expenses   represent  the  estimated
liabilities for reported claims plus those incurred but not yet reported and the
related  estimated  claim  settlement  expenses.  The liabilities for claims and
claim expenses are  determined  using  case-basis  evaluations  and  statistical
analyses and  represent  estimates of the ultimate  cost of all claims  incurred
through December 31 of each year. Although considerable  variability is inherent
in such estimates, management believes that the liabilities for claims and claim
expenses are adequate.  The estimates are  continually  reviewed and adjusted as
necessary; such adjustments are included in current operations and are accounted
for as changes in estimates.  Included in the  liabilities  for claims and claim
expenses  are $820  million  and $823  million at  December  31,  2001 and 2000,
respectively,  of long-term  disability  claims that are discounted at a 6% rate
(See Note 12).

Amounts  recoverable  from reinsurers  related to the liabilities for claims and
claim expenses are estimated in a manner consistent with the related liabilities
associated with the reinsured policies.

Life Reinsurance Segment

The Company  provides  reinsurance for life and health  insurance and annuities.
These  products  can be  classified  into three  groups:  traditional  insurance
contracts,   universal  life  insurance  contracts  and  investment   contracts.
Insurance  contracts are broadly defined to include  contracts with  significant
mortality and/or morbidity risk, while investment  contracts are broadly defined
to include contracts without significant  mortality or morbidity risk. Universal
life insurance  contracts are insurance  contracts with terms that are not fixed
and guaranteed.

Revenues from  traditional  insurance  contracts are recognized as revenues when
due or over  the  terms  of the  policies.  For  universal  life  contracts  and
investment   contracts,   premiums   received   are   reported  as   liabilities
("accumulated contract values"),  not as revenues.  Revenues from universal life
contracts and investment  contracts are recognized for assessments  made against
the   policyholder's   accumulated   contract   values  for  insurance,   policy
administration, surrenders and other authorized charges.

Future policy benefits for traditional life and health  contracts  represent the
present value of such benefits  based on mortality and other  assumptions  which
were  appropriate  at the  time  the  policies  were  issued  or at the  date of
purchase.  Interest  rate  assumptions  used in  calculating  the present  value
generally  ranged  from  3-9% at  December  31,  2001 and 2000.  Interest  rates
credited to universal  life  contracts  and  investment  contracts are generally
guaranteed  for a specified  time period with renewal  rates  determined  by the
issuing insurance  company.  Such crediting interest rates generally ranged from
3-9% in 2001, 2000 and 1999.


                                       34

<PAGE>


                     GE GLOBAL INSURANCE HOLDING CORPORATION
                                AND SUBSIDIARIES

             Notes to Consolidated Financial Statements (continued)


2.   Summary of Significant Accounting Policies (continued)

Acquisition  costs include costs and expenses that vary with,  and are primarily
related to, the  acquisition  of insurance  and  investment  contracts,  such as
commissions and certain support costs,  such as underwriting and policy issuance
expenses.  For  traditional  insurance  contracts,  the  acquisition  costs  are
amortized  over the premium  paying  periods or, in the case of  limited-payment
contracts,   over  the  estimated  benefit  payment  periods  using  assumptions
consistent  with those used in computing  future policy  benefit  reserves.  For
universal life contracts and investment contracts,  the amortization is based on
the anticipated gross profits from investments,  surrender and other charges net
of interest  credited,  mortality  and  maintenance  expenses.  As actual  gross
profits  vary from  projected  gross  profits,  the  impact on  amortization  is
included in net income.

The  actuarially  determined  present value of anticipated  net cash flows to be
realized from insurance,  annuity and investment  contracts in force at the date
of acquisition of life insurance enterprises is recorded as the present value of
future  profits and is amortized  over the  respective  policy terms in a manner
similar to  deferred  insurance  acquisition  costs.  Unamortized  balances  are
adjusted to reflect experience and impairment, if any.

Funds Held by Reinsured Companies

Funds held by  reinsured  companies  represent  ceded  premiums  retained by the
ceding companies  according to contractual  terms.  The Company  generally earns
investment income on these balances during the periods that the funds are held.

Allowance for Doubtful Accounts

The Company  establishes  an allowance for  uncollectible  premiums  receivable,
reinsurance recoverables and other doubtful accounts at the time such losses are
estimated  to  have  been  incurred.   Measurement   of  such  losses   requires
consideration  of historical loss  experience,  including the need to adjust for
current  conditions,  and  judgments  about the  probable  effects  of  relevant
observable  data,  including  present  economic  conditions  such as delinquency
rates, financial health of specific customers, collateral value (such as letters
of credit and funds held  balances) and legal  right-of-offset  of related claim
liabilities.  The allowance is recorded as a valuation  account that reduces the
corresponding  asset.  The  allowance  totaled  $159  million and $74 million at
December 31, 2001 and 2000, respectively.

Goodwill

The  Company  amortizes  goodwill  recorded  in  connection  with  its  business
combinations  over periods  ranging from 15 to 30 years using the  straight-line
method.  If goodwill is identified with long-lived assets that are subject to an
impairment  loss,  and an  adjustment  is to be made to reflect fair value,  the
goodwill is reduced or eliminated  before the carrying value of such  long-lived
assets is written down to fair value.  Goodwill in excess of associated expected
operating  cash flows is  considered  to be impaired and is written down to fair
value.

Statement of Cash Flows

Cash includes cash on hand,  demand deposits and  certificates  of deposit.  All
highly liquid  investments with an original maturity of three months or less are
classified as short-term  investments in the consolidated statement of financial
position,  and transactions as such are considered  investing  activities in the
consolidated statement of cash flows.

                                       35

<PAGE>

                     GE GLOBAL INSURANCE HOLDING CORPORATION
                                AND SUBSIDIARIES

             Notes to Consolidated Financial Statements (continued)


2.   Summary of Significant Accounting Policies (continued)

Reinsurance

Reinsurance  contracts that do not both transfer significant  insurance risk and
result in the reasonable  possibility  that the reinsurer (or  retrocessionaire)
may realize a significant loss from the transaction are required to be accounted
for as deposits.  These  contract  deposits are  classified as contract  deposit
assets  (included in "other assets") or "contract  deposit  liabilities" and are
generally  accounted for similar to financing  transactions with interest income
or expense credited or charged to the contract deposits.

Income Taxes

GE  Global   Insurance,   together  with  its  domestic  property  and  casualty
insurance/reinsurance  subsidiaries,  various non-insurance subsidiaries and its
parent, GE Capital Services, are included in the consolidated federal income tax
return  of GE  Company.  GE  Global  Insurance's  two  domestic  life  insurance
subsidiaries are taxed as life insurance companies,  and those subsidiaries each
file separate federal income tax returns.

The  international  insurance  company  subsidiaries of GE Global Insurance file
separate  income  tax  returns  in the  countries  where  the  subsidiaries  are
domiciled or operate.

The Company  utilizes  the  liability  method in  accounting  for income  taxes,
whereby  deferred tax assets and liabilities are determined based on differences
between the financial  reporting and tax bases of assets and liabilities and are
measured  using  the  enacted  tax rates and laws.  The  Company  establishes  a
"valuation  allowance" for any portion of the deferred tax asset that management
believes will not be realized.

Foreign Currency Translation

The  Company  operates in a multiple  functional  currency  environment  whereby
revenues and expenses in functional  currencies  are  translated  using periodic
weighted average  exchange rates during the year and functional  currency assets
and  liabilities  are translated at the rates of exchange in effect at the close
of  the  year.  Gains  or  losses  resulting  from  translating  the  functional
currencies  into  U.S.  dollars  are  accumulated  in a  separate  component  of
stockholder's   equity,   entitled  "accumulated  foreign  currency  translation
adjustments." It is the Company's general policy to offset currency risk related
to insurance  claims and claim  expenses by  maintaining  investment  securities
matched to the major  currencies  represented in its recorded net  claim-related
liabilities.  This approach to reducing currency risk is sometimes  supplemented
by the use of foreign currency forward purchase or sale contracts.  In addition,
the Company partially hedges the foreign currency risk on its foreign subsidiary
investments  and certain  foreign  currency  denominated  intercompany  loans by
utilizing  cross currency swaps and foreign  currency  forward  purchase or sale
contracts  (See  Note  14).  As  a  result,  while  foreign  currency  may  have
significantly  impacted  individual  asset,   liability,   revenue  and  expense
categories, the net effect of foreign currency transactions on operating results
during 2001, 2000 and 1999 was not material.

Benefit Plans

Prior  to  September  30,  1999,  employees  of the  Company  and  its  domestic
subsidiaries were covered by trusteed,  noncontributory  defined benefit pension
plans and unfunded  postretirement plans that provided medical benefits and life
insurance   benefits  to  substantially  all  employees  and  their  dependents.
Effective  October 1, 1999,  the majority of the  Company's  domestic  employees
began  participating  in a trusteed,  contributory  defined benefit pension plan
sponsored by the Company's ultimate parent, GE Company. Additionally,  effective
September 30, 1999,  the Company  terminated  substantially  all of its domestic
postretirement  plans, with covered employees  becoming  participants in similar
plans sponsored by GE Company. The existing accumulated postretirement benefit


                                       36
<PAGE>



                     GE GLOBAL INSURANCE HOLDING CORPORATION
                                AND SUBSIDIARIES

             Notes to Consolidated Financial Statements (continued)


2.       Summary of Significant Accounting Policies (continued)

obligations under the terminated plans were also transferred to GE Company, with
no gain or loss resulting from this transaction. GE Company charges the Company,
in turn,  for its  relative  share of the costs  associated  with the overall GE
Company  Group  Pension  and  Postretirement  Plans.  Certain  of the  Company's
international  subsidiaries also sponsor noncontributory defined benefit pension
plans for their  employees or participate in GE Company  sponsored  contributory
defined benefit plans.  The net effect of all benefit plans on the  consolidated
statement of financial  position  and  statement of earnings for 2001,  2000 and
1999 was not material.

Accounting Changes

At January 1, 2001,  the  Company  adopted  Statement  of  Financial  Accounting
Standards  ("SFAS")  133,  Accounting  for  Derivative  Instruments  and Hedging
Activities,  as amended.  Under SFAS 133, all derivative  instruments (including
certain  derivative  instruments  embedded in other contracts) are recognized in
the balance sheet at their fair values and changes in fair value are  recognized
immediately in earnings, unless the derivatives qualify as hedges of net foreign
investments or future cash flows.  For  derivatives  qualifying as hedges of net
foreign investments,  the effective portion of changes in fair value is recorded
in a separate component of stockholder's  equity entitled  "accumulated  foreign
currency  translation  adjustments."  For  derivatives  qualifying  as hedges of
future cash flows,  the  effective  portion of changes in fair value is recorded
temporarily  in equity,  then  recognized  in  earnings  along with the  related
effects of the hedged items.  Any  ineffective  portion of hedges is reported in
earnings as it occurs.  Further  information  about  derivatives  and hedging is
provided in note 14.

The cumulative effect of adopting this accounting change at January 1, 2001, was
as follows:
<TABLE>


      (In millions)                                    Earnings (a)
                                                       -----------
<S>                                                      <C>

      Adjustment to fair value of derivatives            $(17)
      Income tax effect                                     6
      Total                                              ----
                                                         $(11)
                                                         ====
</TABLE>

     (a) For earnings effect, amount shown is net of adjustment to hedged items.

The  cumulative  effect on  earnings  was due to the effect of marking to market
options and currency contracts used for hedging. Decreases in the fair values of
these  instruments  were  attributable  to movements in embedded  interest rates
since inception of the hedging arrangements.

This accounting change did not involve cash, and management expects that it will
have no more than a modest effect on future results.

3.   Acquisitions and Dispositions

On  March  4,  1999,  the  Company  completed  the  acquisition  of  Eagle  Star
Reinsurance  Company  Limited  ("Eagle  Star Re",  subsequently  merged  with GE
Frankona Reinsurance Limited, an affiliate) from Zurich Financial Services for a
cash  consideration of approximately  $346 million.  The cash  consideration was
provided  through  existing  funds.  Eagle  Star Re is a leading  London  Market
non-life reinsurance company principally doing business through  intermediaries.
The transaction  excludes  substantially  all business  written by Eagle Star Re
before 1993. The acquisition has been accounted for as a purchase;  accordingly,
the  operating  results of Eagle  Star Re have been  included  in the  Company's
consolidated financial statements since the date of acquisition.

In late  1999,  the  Company  sold its  reinsurance  brokerage  subsidiary.  The
resulting gain from this  transaction was not material to the 1999  consolidated
statement of earnings.


                                       37

<PAGE>


                     GE GLOBAL INSURANCE HOLDING CORPORATION
                                AND SUBSIDIARIES

             Notes to Consolidated Financial Statements (continued)

4.   Investments

The amortized cost,  estimated fair value and gross  unrealized gains and losses
of fixed maturity  securities,  equity  securities,  short-term  investments and
other invested assets are summarized as follows:
<TABLE>
<CAPTION>


                                                                                    December 31, 2001
                                                                     ------------------------------------------------
                                                                                    Gross        Gross      Estimated
                                                                     Amortized    Unrealized  Unrealized      Fair
(In millions)                                                           Cost        Gains       Losses        Value
                                                                     ------------------------------------------------
<S>                                                                      <C>         <C>         <C>          <C>

Fixed maturity securities:
   U.S. government                                                       $ 237       $ 4         $ (1)        $ 240
   International government                                              3,565        65          (26)        3,604
   Tax-exempt                                                            6,068        73          (76)        6,065
   Corporate                                                             6,341       114         (130)        6,325
   U.S. mortgage-backed and other asset-backed                           2,551        49          (13)        2,587
   International mortgage-backed and other asset-backed                    939        12           (3)          948
                                                                       -------      ----         ----       -------
   Total fixed maturity securities                                      19,701       317         (249)       19,769
Equity securities                                                          660        19          (38)          641
Short-term investments                                                   1,748         -            -         1,748
Other invested assets                                                      337         -            -           337
                                                                       -------      ----        -----       -------
Total investments                                                      $22,446      $336        $(287)      $22,495
                                                                       =======      ====        =====       =======
</TABLE>

<TABLE>
<CAPTION>


                                                                                   December 31, 2000
                                                                     ------------------------------------------------
                                                                                    Gross         Gross     Estimated
                                                                     Amortized    Unrealized   Unrealized     Fair
(In millions)                                                           Cost        Gains        Losses       Value
                                                                     -------------------------------------------------
 <S>                                                                    <C>          <C>         <C>         <C>

Fixed maturity securities:
  U.S. government                                                      $   474      $  5        $   (4)     $   475
  International government                                               2,183        44           (28)       2,199
  Tax-exempt                                                             6,756       254           (13)       6,997
  Corporate                                                              6,462        91          (160)       6,393
  U.S. mortgage-backed and other asset-backed                            1,899        34           (11)       1,922
  International mortgage-backed and other asset-backed                     772        10            (7)         775
                                                                       -------      ----         -----       ------
  Total fixed maturity securities                                       18,546       438          (223)      18,761
Equity securities                                                          689        68           (39)         718
Short-term investments                                                   1,348         -             -        1,348
Other invested assets                                                      364         -             -          364
                                                                       -------      ----         -----      -------
Total investments                                                      $20,947      $506         $(262)     $21,191
                                                                       =======      ====         =====      =======
</TABLE>


                                       38

<PAGE>

                     GE GLOBAL INSURANCE HOLDING CORPORATION
                                AND SUBSIDIARIES

             Notes to Consolidated Financial Statements (continued)

4.   Investments (continued)

The amortized  cost and  estimated  fair value of fixed  maturity  securities at
December 31, 2001 are summarized, by stated maturity, as follows:
<TABLE>
<CAPTION>


                                                                       Estimated
                                                          Amortized      Fair
(In millions)                                                Cost        Value
                                                          ----------------------
<S>       <C>                                               <C>          <C>

Maturity:
   Due in 2002                                            $   792      $   799
   Due in 2003-2006                                         3,476        3,519
   Due in 2007-2011                                         5,826        5,807
   Due after 2011                                           6,117        6,109
                                                          -------      -------
                                                           16,211       16,234
Mortgage-backed and other asset-backed securities           3,490        3,535
                                                          -------      -------
Total fixed maturity securities                           $19,701      $19,769
                                                          =======      =======
</TABLE>


The foregoing data is based on the stated  maturities of the securities.  Actual
maturities will differ for some securities  because borrowers may have the right
to call or prepay obligations with or without call or prepayment penalties.

Major categories of investment income are summarized as follows:
<TABLE>
<CAPTION>


                                                            Year ended December 31,
                                                         ----------------------------
(In millions)                                             2001       2000        1999
                                                         ----------------------------
<S>                                                     <C>        <C>        <C>

Gross investment income:
   Fixed maturity securities                            $1,049     $1,081     $   997
   Equity securities                                        14         82          58
   Short-term investments                                   73         66          45
   Securities and indebtedness of related parties           23         22          21
   Other                                                    64         79          47
                                                        ------     ------     -------
                                                         1,223      1,330       1,168
Investment expenses                                        (21)       (15)        (17)
                                                        ------     ------      ------
Net investment income                                   $1,202     $1,315      $1,151
                                                        ======     ======      ======
</TABLE>

                                       39


<PAGE>

                     GE GLOBAL INSURANCE HOLDING CORPORATION
                                AND SUBSIDIARIES

             Notes to Consolidated Financial Statements (continued)

4.   Investments (continued)

The  Company's  sales  proceeds  and  realized  gains and  losses on  investment
securities are summarized as follows:
<TABLE>
<CAPTION>


                                                                 Year ended December 31,
                                                              -----------------------------
(In millions)                                                   2001       2000      1999
                                                              -----------------------------

<S>                                                           <C>        <C>        <C>
Sales proceeds from investment securities                     $14,988    $10,757    $9,211
                                                              =======    =======    ======

Net realized gains on investments before income taxes:
 Fixed maturity securities:
     Gross realized gains                                        $517       $194      $119
     Gross realized losses                                        (81)       (87)      (87)
  Equity securities:
     Gross realized gains                                          43        696       734
     Gross realized losses                                        (43)      (281)      (67)
                                                                 ----       ----      ----
  Total net realized gains before income taxes                    436        522       699
Provision for income taxes                                       (154)      (178)     (255)
                                                                 ----       ----      ----
Net realized gains on investments, after income taxes            $282       $344      $444
                                                                 ====       ====      ====

</TABLE>


The change in net  unrealized  gains  (losses),  before income  taxes,  on fixed
maturity  securities was $(147)  million,  $511 million and $(1,179)  million in
2001,  2000  and  1999,  respectively;  the  corresponding  amounts  for  equity
securities  were $(48) million,  $(330) million and $(209) million in 2001, 2000
and 1999, respectively;  and the corresponding amounts for other invested assets
were $(29) million and $(74) million in 2000 and 1999, respectively.

The Company had investments in fixed maturity  securities with a carrying amount
of $1,090 million and $857 million at December 31, 2001 and 2000,  respectively,
on deposit with state and provincial insurance departments to satisfy regulatory
requirements.

5.       Intangible Assets

The Company's intangible assets are summarized as follows:
<TABLE>
<CAPTION>


                                                             December 31,
                                                      --------------------------
(In millions)                                           2001              2000
                                                      --------------------------

<S>                                                   <C>                <C>
Goodwill                                              $1,313             $1,327
Present value of future profits (" PVFP")                165                200
Other                                                    107                113
                                                      ------             ------
                                                      $1,585             $1,640
                                                      ======             ======

</TABLE>

The Company's  intangible  assets are shown net of accumulated  amortization  of
$668 million and $568 million at December 31, 2001 and 2000, respectively.

The PVFP was  determined  using risk adjusted  discount rates from 8% to 15% and
the interest  rates  selected for the  valuation  were  determined  based on the
applicable  interest  rates in the country of risk and the risk  inherent in the
realization of the estimated  future profits.  PVFP is being amortized using the
interest method over the duration of the related life business, approximately 20
years, as the premiums or gross profits on the books of business are recognized.

                                       40
<PAGE>


                     GE GLOBAL INSURANCE HOLDING CORPORATION
                                AND SUBSIDIARIES

             Notes to Consolidated Financial Statements (continued)

6.   Claims and Claim Expenses

The  Company's  reconciliation  of its  beginning  and  ending  claims and claim
expense liabilities, net of reinsurance, is summarized as follows:

<TABLE>
<CAPTION>



                                                                             Year ended December 31,
                                                                        ---------------------------------
(In millions)                                                             2001        2000        1999
                                                                        ---------------------------------

<S>                <C>                                                   <C>         <C>         <C>
Balance at January 1 - gross                                             $17,678     $18,134     $15,852
Less reinsurance recoverables                                            (4,924)      (4,314)     (2,936)
                                                                         ------      -------     -------
Balance at January 1 - net                                                12,754      13,820      12,916
                                                                         -------     -------     -------

Claims and expenses incurred:
  Current year                                                             6,164       5,525       4,789
  Prior years                                                                811         934         340
                                                                         -------     -------     -------
                                                                           6,975       6,459       5,129
                                                                         -------     -------     -------

Claims and expenses paid:
  Current year                                                            (1,076)     (1,650)     (1,672)
  Prior years                                                             (5,596)     (5,290)     (2,997)
                                                                         -------     -------     -------
                                                                          (6,672)     (6,940)     (4,669)
                                                                         -------     -------     -------

Claim reserves related to acquired companies (See Note 3)                      -         279         793

Claim reserves related to disposed companies                                   -           -        (202)

Foreign exchange and other                                                    15        (864)       (147)
                                                                         -------     -------     -------
Balance at December 31 - net                                              13,072      12,754      13,820
Add reinsurance recoverables                                               8,961       4,924       4,314
                                                                         -------     -------     -------
Balance at December 31 - gross                                           $22,033     $17,678     $18,134
                                                                         =======     =======     =======
</TABLE>


Prior-year  claims  and  expenses  incurred  in  the  preceding  table  resulted
principally  from settling  claims  established  in earlier  accident  years for
amounts  that  differed  from  expectations  and  due to  changes  in  estimates
associated with a lag in receiving  underwriting  reports from ceding  companies
that causes development of both premiums and claims, especially as it relates to
the international operations.

Unfortunately, the escalation in reported losses relative to associated premiums
that emerged in 2000 as discussed below continued in 2001, and at a pace greater
than had been  anticipated in the actuarial  reserve  studies  completed in late
2000.  As a result,  in 2001,  it again  became  necessary  for the  Company  to
increase  claim  reserves to reflect the higher  ultimate loss  projections  for
prior year loss events. The majority of the adverse  development in 2001, and to
a lesser  extent in 2000,  related  to  higher  projected  losses  on  liability
coverages,   especially  in  the  hospital  liability,   nonstandard  automobile
(automobile  insurance  extended to higher-risk  drivers) and commercial general
liability lines of business.

                                       41

<PAGE>

                     GE GLOBAL INSURANCE HOLDING CORPORATION
                                AND SUBSIDIARIES

             Notes to Consolidated Financial Statements (continued)

6.   Claims and Claim Expenses (continued)

The high level of claims and expenses  incurred related to prior years reflected
in the above table for 2000 is primarily  attributable to the combination of the
effects of  continued  insufficient  pricing  within the  overall  property  and
casualty   insurance/reinsurance   industry   and   the   insurance   industry's
undervaluing  the  initial  loss  estimates  for  certain  European   windstorms
occurring late in December 1999.  Based on the continued  escalation in reported
losses relative to associated premiums, it became more apparent during 2000 that
the level of general  price  erosion that  occurred in the primary  property and
casualty insurance  industry in recent years was significantly  greater than had
been previously  contemplated.  In response to this new  information,  it became
necessary  for the  Company to  increase  claim  reserves  to reflect the higher
ultimate  loss  projections  resulting  from  this  increasing  trend  of  claim
development on these more recent underwriting years.

The 1999 claims and expenses  incurred related to prior years is attributable to
higher than normal  claim and  expense  development  across a number of lines of
business,  including  property coverages (which was most highly impacted by much
higher than expected  industry-wide  losses with respect to Hurricane  Georges),
long-term disability and communications/media liability.

In  establishing  the  liabilities  for  claims  and claim  expenses  related to
asbestos-related  illnesses and toxic waste cleanup,  management considers facts
currently  known  and the  current  state  of the law and  coverage  litigation.
Liabilities  are  recognized  for known  claims  (including  the cost of related
litigation)  when  sufficient  information  has been  developed  to indicate the
involvement of specific  insurance or  reinsurance  contracts and management can
reasonably estimate its liability. In addition, amounts have been established to
cover additional exposures on both known and unasserted claims, and estimates of
the liabilities are reviewed and updated continually.

The gross  liabilities  for  asbestos-related  illness and toxic  waste  cleanup
claims and claim  expenses and the related  reinsurance  recoverables  were $786
million and $165 million,  respectively, at December 31, 2001. These amounts are
management's best estimate, based on currently available information,  of future
claim and claim expense  payments and recoveries that are expected to develop in
future  years.  The  Company  monitors  evolving  case  law  and its  effect  on
asbestos-related   illness  and  toxic  waste  cleanup  claims.   Changing  U.S.
government  regulations  and  legislation,  including  continuing  Congressional
consideration of a Federal  Superfund law, newly reported  claims,  new contract
interpretations  and other  factors  could  significantly  affect  future  claim
development. While the Company has recorded its best estimate of its liabilities
for  asbestos-related  illness and toxic waste cleanup claims based on currently
available  information,  it is possible that additional liabilities may arise in
the future.  It is not  possible to estimate  with any  certainty  the amount of
additional  net loss,  or the range of net loss,  that is  reasonably  possible;
therefore, there can be no assurance that future liabilities will not materially
affect the Company's results of operations, financial position or cash flows.

Operating  results  for 2001 as  compared  to 2000 were  adversely  impacted  by
approximately  $575 million  ($386  million  after tax) related to the insurance
losses  arising from the events of September  11. This amount,  which  primarily
resulted from  contingent  premium  payments  contained in certain  retrocession
agreements,  comprises  $698  million  recorded as a reduction  in net  premiums
earned, and $78 million reflecting  additional claims, claim expenses and policy
benefits,  partially offset by $201 million  reflecting a reduction in insurance
acquisition  costs.  The gross  losses  arising  from the events of September 11
(estimated  to be $3.3  billion)  relate to  underlying  insurance  policies and
reinsurance contracts providing general property,  general liability,  aviation,
business   interruption,   workers  compensation  and  life  and  health-related
coverages.  Historical experience related to large catastrophic events has shown
that a broad range of total  insurance  industry  loss  estimates  often  exists
following  such an event  and it is not  unusual  for  there  to be  significant
subsequent  revisions  in such  estimates.  $575  million is  management's  best
estimate  of its  existing  net  liability  based on the  information  currently
available,  and is net of estimated recoveries under retrocession  arrangements,
under  which a  portion  of  losses  is  routinely  ceded to  other  reinsurance
entities. Further information regarding potential litigation associated with the
events of September 11 is discussed in note 13.

                                       42
<PAGE>


                     GE GLOBAL INSURANCE HOLDING CORPORATION
                                AND SUBSIDIARIES

             Notes to Consolidated Financial Statements (continued)

6.       Claims and Claim Expenses (continued)

The   Company's   insurance   company   subsidiaries   remain  liable  to  their
policyholders  if  the  reinsurers  they  cede  to  are  unable  to  meet  their
contractual obligations under the applicable reinsurance agreements. To minimize
its exposure to significant  losses from reinsurance  insolvencies,  the Company
evaluates the financial condition of its reinsurers and monitors  concentrations
of credit risk arising from similar geographic  regions,  activities or economic
characteristics  of  the  reinsurers.  Of  the  $10.4  billion  of  consolidated
reinsurance  recoverables at December 31, 2001,  approximately 33% is due from 4
specific retrocessionaires, primarily in connection with the Company's aggregate
excess of loss retrocession  program. All of these  retrocessionaires are large,
highly rated reinsurance  entities. At this time, management does not anticipate
that any significant  portion of its recorded  reinsurance  recoverables will be
uncollectible.

7.   Income Taxes

The Company's provision for income taxes is summarized as follows:
<TABLE>
<CAPTION>


                                                   Year ended December 31,
                  ----------------------------------------------------------------------------------------
                             2001                             2000                         1999
                  --------------------------      -------------------------      -------------------------
                  United     Inter-               United    Inter-               United    Inter-
(In millions)     States    national   Total      States   National   Total      States   national   Total
                  --------------------------      -------------------------      -------------------------

<S>               <C>       <C>        <C>        <C>       <C>       <C>         <C>       <C>       <C>
Current           $(206)     $(91)     $(297)     $(73)    $ (36)     $(109)      $138      $ 78      $216
Deferred            (49)       64         15       202       (69)       133         27        25        52
                  -----      ----      -----      ----     -----      -----       ----      ----      ----
Total             $(255)     $(27)     $(282)     $129     $(105)     $  24       $165      $103      $268
                  =====      ====      =====      ====     =====      =====       ====      ====      ====
</TABLE>


Income taxes paid (received) by the Company totaled $(177) million,  $22 million
and $244 million in 2001, 2000 and 1999, respectively.

The  Company's  effective  income tax rate on pre-tax  income  differs  from the
prevailing U.S. corporate federal income tax rate and is summarized as follows:
<TABLE>
<CAPTION>


                                                                 Year ended December 31,
                                                               ---------------------------
                                                               2001       2000       1999
                                                               ---------------------------

<S>                                                            <C>          <C>        <C>
Corporate federal income tax rate                              (35)%        35%        35%
Tax-exempt investment income                                   (22)        (20)       (12)
Purchase price adjustment related to recent acquisition         (7)         (1)         -
German restructuring resulting in step-up of tax basis           -         (12)         -
Election to permanently defer certain foreign earnings          (4)         (1)         -
Increase in foreign tax credit capacity                          -          (4)         -
Intercompany dividend payment                                    5           4          3
Other items, net                                                 2           3          1
                                                               ---          --         --
Effective tax rate                                             (61)%         4%        27%
                                                               ===          ==         ==
</TABLE>


The Company holds a significant  portion of its overall investment  portfolio in
securities that are substantially  exempt from U.S. taxation  (principally state
and  municipal  bonds).  This is the  most  significant  factor  for  all  years
presented in reconciling  the prevailing 35% U.S.  corporate  federal income tax
rate to the Company's lower effective tax rate.  Additional  significant factors
contributing  to the lower  effective  tax rate  include (1) 2001 - treatment of
certain proceeds  received in connection with the resolution of issues involving
a recent  acquisition  as a purchase  price  adjustment for tax purposes and (2)
2000 - tax benefits attributable to a step-up in the tax basis of certain assets
following the conversion of a corporate  subsidiary to a partnership  for German
tax purposes.

                                       43
<PAGE>

                     GE GLOBAL INSURANCE HOLDING CORPORATION
                                AND SUBSIDIARIES

             Notes to Consolidated Financial Statements (continued)

7.        Income Taxes (continued)

The  significant  components  of the  Company's  net  deferred  tax  assets  and
liabilities are summarized as follows:
<TABLE>
<CAPTION>


                                                                  December 31,
                                                              --------------------
(In millions)                                                   2001        2000
                                                              --------------------

<S>                                                            <C>          <C>

Deferred tax assets:
   Claims and claim expenses                                   $ 362        $206
   Unearned premiums                                             119         169
   Foreign tax credit carryforwards                               37          20
   Foreign currency translation                                  361         320
   Contract deposit assets                                       103         113
   Other                                                         126         135
                                                              ------        ----
   Total deferred tax assets                                   1,108         963
                                                              ------        ----

Deferred tax liabilities:
   Deferred insurance acquisition costs                          510         527
   Net unrealized gains on investment securities                 106          79
    Software                                                      42          45
   Contract deposit liabilities                                  154          41
    Cross currency swaps                                         113         121
   Other                                                         170         181
                                                              ------        ----
   Total deferred tax liabilities                              1,095         994
                                                              ------        ----
Net deferred tax asset (liability)                            $   13        $(31)
                                                              ======        ====
</TABLE>



Income taxes  payable  (receivable)  totaled  $(122)  million and $11 million at
December 31, 2001 and 2000, respectively.

                                       44


<PAGE>

                     GE GLOBAL INSURANCE HOLDING CORPORATION
                                AND SUBSIDIARIES

             Notes to Consolidated Financial Statements (continued)

8.   Indebtedness to/from Related Parties

The Company and GE Capital  Corporation are  participants in a revolving  credit
agreement that involves an international  cash pooling  arrangement on behalf of
certain European  affiliates of the Company.  In such roles,  either participant
may make short-term loans to the other as part of the cash pooling  arrangement.
Each such borrowing shall be repayable upon demand,  but not to exceed 364 days.
This unsecured line of credit has an interest rate per annum equal to GE Capital
Services'  cost of funds for the currency in which such borrowing is denominated
and is available  for an initial term of five years  expiring  October 21, 2002,
and shall be  automatically  extended  for  successive  terms of one year  each,
unless  terminated  in  accordance  with the terms of the  agreement.  The total
amount  outstanding on this credit  facility was $110 million and $32 million as
of December 31, 2001 and 2000, respectively.

The Company has in place a revolving  credit  agreement with GE Capital Services
for an amount up to $600 million that expires  January 1, 2003, with an interest
rate per annum equal to GE Capital  Services'  cost of funds.  This agreement is
automatically  extended for successive terms of one year each, unless terminated
in accordance with the terms of the agreement.  The total amount  outstanding on
this credit facility,  including accrued interest payable,  was $108 million and
$129 million as of December 31, 2001 and 2000, respectively. Interest accrued on
such borrowings at an annual  weighted-average  interest rate of 4.07% and 6.70%
for the years ended  December 31, 2001 and 2000,  respectively.  No interest was
paid in 2001 or 2000.

In October  1998,  the Company  entered into an interim loan  agreement  with GE
Capital  Corporation  for  $625  million  to fund  its  acquisition  of  Medical
Protective  Corporation.  This interim loan  agreement  had an interest rate per
annum  equal to GE  Capital  Corporation's  cost of  funds.  The  total  balance
outstanding  under this  interim  loan  agreement,  including  accrued  interest
payable,  was $666  million as of December  31,  1999,  which was repaid in 2000
using proceeds from long-term  borrowings (See Note 9). Interest accrued on such
borrowings  at an annual  weighted-average  interest  rate of 6.16% for the year
ended December 31, 2000. Total interest paid in 2000 was $62 million.

9.   Borrowings

In February  1996,  the Company  issued $600  million of senior  unsecured  debt
securities  at 7% per  annum,  which are not  redeemable  prior to  maturity  on
February 15, 2026. The Company  received $556 million in net proceeds from these
notes  (after  deduction  of  underwriting  discounts  and  commissions  and the
original issue discount and cost of an interest rate "lock"  contract) which was
used to repay short-term borrowings.

In March 1999,  the Company issued $400 million of redeemable  senior  unsecured
debt  securities  at 6.45% per annum,  that are  scheduled to mature on March 1,
2019.  The Company  received  $395 million in net proceeds  from the issuance of
these notes (after deduction of underwriting  discounts and  commissions)  which
was used to repay  outstanding  short-term  borrowings  under  the  intercompany
revolving credit agreement with GE Capital Services (See Note 8).

In June 2000,  the Company  issued $350 million of redeemable  senior  unsecured
debt securities at 7.5% per annum, that are scheduled to mature on June 15, 2010
and $350 million of redeemable  senior  unsecured  debt  securities at 7.75% per
annum,  that are scheduled to mature on June 15, 2030. The Company received $691
million in net proceeds  from the  issuance of these notes  (after  deduction of
underwriting  discounts  and  commissions)  which was used to repay  outstanding
short-term   borrowings   under  an  interim  loan  agreement  with  GE  Capital
Corporation (See Note 8).

Total interest paid on borrowings was $121 million,  $93 million and $55 million
in 2001, 2000 and 1999, respectively.

                                       45


<PAGE>

                     GE GLOBAL INSURANCE HOLDING CORPORATION
                                AND SUBSIDIARIES

             Notes to Consolidated Financial Statements (continued)

10.  Supplemental Financial Statement and Reinsurance Data

Insurance  premiums written and earned in 2001, 2000 and 1999 and life insurance
in-force as of December 31, 2001, 2000 and 1999 are summarized as follows:
<TABLE>
<CAPTION>


                                     Insurance Premiums Written
                                  ---------------------------------
                                    Property/
(In millions)                     Casualty      Life       Total
                                 ---------------------------------
<S>                                <C>         <C>        <C>

2001:
  Direct                           $1,857      $    9     $1,866
  Assumed                           6,092       2,408      8,500
  Ceded                            (2,398)       (576)    (2,974)
                                   ------      ------     ------
  Net                              $5,551      $1,841     $7,392
                                   ======      ======     ======

2000:
  Direct                           $1,455      $    6     $1,461
  Assumed                           6,644       2,044      8,688
  Ceded                            (1,545)       (413)    (1,958)
                                   ------      ------     ------
  Net                              $6,554      $1,637     $8,191
                                   ======      ======     ======

1999:
  Direct                           $  999      $    5     $1,004
  Assumed                           6,373       1,525      7,898
  Ceded                            (1,489)       (266)    (1,755)
                                   ------      ------     ------
  Net                              $5,883      $1,264     $7,147
                                   ======      ======     ======
</TABLE>

<TABLE>
<CAPTION>



                                   Insurance Premiums Earned
                               ----------------------------------
                                                                       Life
                                 Propterty/                          Insurance
(In millions)                     Casualty      Life      Total      In-Force
                               -------------------------------------------------

<S>                                <C>         <C>        <C>         <C>
2001:
  Direct                           $1,812      $   10     $1,822     $      -
  Assumed                           5,916       2,448      8,364      624,668
  Ceded                            (2,426)       (575)    (3,001)    (176,593)
                                   ------      ------     ------     --------
  Net                              $5,302      $1,883     $7,185     $448,075
                                   ======      ======     ======     ========

2000:
  Direct                           $1,228      $    6     $1,234     $  3,284
  Assumed                           6,753       2,025      8,778      583,279
  Ceded                            (1,604)       (407)    (2,011)    (174,206)
                                   ------      ------     ------     --------
  Net                              $6,377      $1,624     $8,001     $412,357
                                   ======      ======     ======     ========

1999:
  Direct                           $  890      $    5     $  895     $  2,724
  Assumed                           6,285       1,534      7,819      500,568
  Ceded                            (1,553)       (265)    (1,818)    (165,094)
                                   ------      ------     ------     --------
  Net                              $5,622      $1,274     $6,896     $338,198
                                   ======      ======     ======     ========
</TABLE>


                                       46

<PAGE>

                     GE GLOBAL INSURANCE HOLDING CORPORATION
                                AND SUBSIDIARIES

             Notes to Consolidated Financial Statements (continued)

10.  Supplemental Financial Statement and Reinsurance Data (continued)

Claims,  claim expenses and policy benefits  incurred in 2001, 2000 and 1999 are
summarized as follows:
<TABLE>
<CAPTION>


                                     Property/
       (In millions)                 Casualty      Life        Total
                                     -----------------------------------

<S>                                  <C>          <C>           <C>
       2001
          Direct                     $2,689       $    -        $2,689
          Assumed                     7,588        2,073         9,661
          Ceded                      (4,888)        (487)       (5,375)
                                     ------       ------        ------
          Net                        $5,389       $1,586        $6,975
                                     ======       ======        ======

       2000:
          Direct                     $  682       $    -        $  682
          Assumed                     7,113        1,754         8,867
          Ceded                      (2,460)        (362)       (2,822)
                                     ------       ------        ------
          Net                        $5,335       $1,392        $6,727
                                     ======       ======        ======

       1999:
          Direct                     $  279       $    -        $  279
          Assumed                     6,075        1,289         7,364
          Ceded                      (1,960)        (298)       (2,258)
                                     ------       ------        ------
          Net                        $4,394       $  991        $5,385
                                     ======       ======        ======
</TABLE>


The Company's  insurance company  subsidiaries both assume  reinsurance from and
cede  reinsurance  to other  insurance  companies.  That  portion  of the  risks
exceeding each  subsidiary's  retention  limit is reinsured with other insurers.
The Company also acquires other reinsurance coverages with retentions and limits
that  management  believes  are  appropriate  for  the  circumstances.   In  the
accompanying consolidated financial statements, premiums, claims, claim expenses
and policy benefits and deferred insurance acquisition costs are reported net of
reinsurance  ceded;  claim  liabilities,  unearned  premiums  and  accruals  are
reported gross of reinsurance ceded.

The Company's  retrocession  program includes aggregate excess of loss coverages
in which  accident  year losses  exceeding  a specified  loss ratio are ceded to
retrocessionaires.  These contracts also contain  contingent  premium provisions
whereby the Company is required to cede additional premiums equal to a specified
portion of the covered losses.  In 2001, 2000 and 1999, the accident year losses
incurred  exceeded  the  specified  loss ratio and,  accordingly,  accruals  for
reinsurance  recoverables  and ceded  premium  payables  were  reflected  in the
accompanying  consolidated  financial statements in accordance with the terms of
the  underlying  retrocession  contracts.  The  associated  accrued  reinsurance
recoverables  will be  collected  when the  underlying  paid  losses  exceed the
specified loss ratios.


                                       47
<PAGE>


                     GE GLOBAL INSURANCE HOLDING CORPORATION
                                AND SUBSIDIARIES

             Notes to Consolidated Financial Statements (continued)

10.   Supplemental Financial Statement and Reinsurance Data (continued)

For financial  reinsurance  assumed,  premiums received are reported as contract
deposit  liabilities,  not as revenues-the  Company reports revenue for the risk
fees charged for those services.  Statutory  policyholder's  surplus of the life
insurance company  subsidiaries has been reduced  approximately  $154 million at
December 31, 2001 in connection with financial reinsurance assumed,  principally
due to  ceding  commissions  paid in  connection  with such  transactions  being
expensed as incurred for statutory reporting purposes.  Such amounts are secured
by future  profits on the  reinsured  business.  The  Company's  life  insurance
subsidiaries  are also subject to the risk that the ceding  companies may become
insolvent  and the right of offset would not be permitted;  however,  management
does not believe such risk is significant.

11.  Stockholder's Equity

ERC has  issued  11,673  shares of  $100,000  par value,  nonredeemable,  voting
preferred  stock  to  GE  Capital  Corporation.  This  preferred  stock  accrues
preferential  and cumulative  dividends at an annual rate of 7.5%. ERC may, upon
approval by its Board of Directors,  redeem the preferred  stock, in whole or in
part, at 100% of the par value of the preferred stock plus all dividends accrued
thereon to the date of redemption. Preferred stock dividends paid by ERC totaled
$88 million in 2001, 2000 and 1999.  These dividends are classified as "Minority
interest  in net  earnings of  consolidated  subsidiaries"  in the  Consolidated
Statement of Earnings.

GE Global  Insurance  has issued 1,500 shares of $100,000 par value,  nonvoting,
cumulative preferred stock to GE Capital Corporation. Dividends on the preferred
stock are paid at a rate of 5% per annum if, as and when  declared  by the Board
of Directors of the Company, and totaled $7.5 million in 2001, 2000 and 1999.

During 2001, the Company  received  capital  contributions  from its parent,  GE
Capital  Services,  totaling $580  million-$400  million in the form of cash and
$180 million in the form of other assets. The $400 million capital  contribution
was made to replenish  capital  sufficient to cover estimated losses  associated
with the events of September 11, 2001.

12.   Statutory Accounting Practices

ERC and its domestic  insurance  company  subsidiaries are domiciled in Missouri
and Kansas,  GE Re is domiciled in Illinois and Medical  Protective is domiciled
in Indiana. Statutory-basis financial statements are prepared in accordance with
accounting  practices  prescribed or permitted by the respective state insurance
departments.  "Prescribed"  statutory  accounting  practices include state laws,
regulations  and  general   administrative  rules,  as  well  as  a  variety  of
publications of the National  Association of Insurance  Commissioners  ("NAIC").
"Permitted"  statutory  accounting  practices encompass all accounting practices
that are not  prescribed;  such  practices  may differ from state to state,  may
differ  from  company  to company  within a state and may change in the  future.
There  are  no  significant   permitted  accounting  practices  that  vary  from
prescribed  accounting  practices  being  utilized  by  the  Company's  domestic
insurance company subsidiaries, except as noted on page 50.

Effective  January 1, 2001, the NAIC required that insurance  companies  prepare
their  statutory  basis  financial   statements  in  accordance  with  the  NAIC
Accounting Practices and Procedures Manual subject to any deviations  prescribed
or  permitted  by  the  domiciliary  state  insurance   departments.   Statutory
accounting practices determine,  among other things, the statutory surplus of an
insurance  company  and,  therefore,  the  amount  of funds  that can be paid as
dividends.  For statutory  reporting  purposes,  accounting  changes  adopted to
conform to these  accounting  practices  are  reported as changes in  accounting
principles,  with  the  cumulative  effect  reported  as an  adjustment  to 2001
unassigned funds (surplus).  The cumulative effect is the difference between the
amount of capital  and  surplus at the  beginning  of the year and the amount of
capital  and  surplus  that  would  have been  reported  at that date if the new
accounting  principles  had been applied  retroactively  for all  periods.  As a
result  of  adoption  of the model  statutory  accounting  practices,  aggregate
cumulative  adjustments  of $234 million were recorded by ERC, GE Re and Medical
Protective  as an increase to  unassigned  funds  (surplus)  at January 1, 2001,
primarily related to the recording of deferred tax assets.

                                       48

<PAGE>

                     GE GLOBAL INSURANCE HOLDING CORPORATION
                                AND SUBSIDIARIES

             Notes to Consolidated Financial Statements (continued)


12.  Statutory Accounting Practices (continued)

Stockholder's equity and net income (loss), as reported to the domiciliary state
insurance  departments in accordance with its prescribed or permitted  statutory
accounting practices,  for the Company's domestic insurance company subsidiaries
are summarized as follows:
<TABLE>
<CAPTION>


                                                                 December 31,
                                                            --------------------
(In millions)                                                 2001         2000
                                                            --------------------
<S>                                                         <C>          <C>

Stockholder's equity:
   ERC                                                      $4,858       $4,050
   Property and casualty subsidiaries of ERC                   263          225
   Life and annuity subsidiaries of ERC                      2,568        2,517
   GE Re                                                       735          775
   Medical Protective                                          408          373
</TABLE>

<TABLE>
<CAPTION>



                                                        Year ended December 31,
                                                      --------------------------
(In millions)                                         2001        2000      1999
                                                      --------------------------

<S>                                                  <C>          <C>       <C>

Net income (loss):
   ERC                                               ($40)        $263      $349
   Property and casualty subsidiaries of ERC           40            9        22
   Life and annuity subsidiaries of ERC               270          665        (9)
   GE Re                                              (71)          80        40
   Medical Protective                                  74           81        66
</TABLE>



The payment of stockholder dividends by domestic insurance companies without the
prior  approval  of  regulators  is  limited  to  formula  amounts  based on net
investment  income  and/or  net  income,   capital  and  surplus  determined  in
accordance with statutory accounting practices, as well as the timing and amount
of dividends paid in the preceding 12 months.  The maximum amount  available for
the  payment of  dividends  by ERC  without  prior  regulatory  approval is $273
million at December  31,  2001.  Such amount  will  increase to $341  million by
December 31, 2002. Of this amount,  $88 million is committed to pay dividends on
the preferred stock issued by ERC to GE Capital  Corporation.  GE Re will not be
able to make any dividend payments during 2002 without the prior approval of the
Director of Insurance for the State of Illinois.  The maximum  amount  available
for the payment of dividends  during 2002 by Medical  Protective  without  prior
regulatory approval is $74 million after December 27, 2002.

Prescribed  statutory  accounting  practice  permits  claims  and claim  expense
liabilities  associated  with  long-term  disability  to be  accounted  for on a
discounted  basis  although the Missouri  Department of Insurance  requires that
insurance  companies  obtain written  permission to discount  certain claims and
claim expense  liabilities.  ERC has received written approval from the Missouri
Department  of Insurance to discount  its claims and claim  expense  liabilities
related to long-term  disability  business.  The total  discount  recognized for
statutory  purposes  was $235  million and $244 million at December 31, 2001 and
2000, respectively.

ERC has also received written approval from the Missouri Department of Insurance
to take credit for certain  otherwise  unauthorized  reinsurance  by obtaining a
parental guarantee from GE Global Insurance (See Note 14).

                                       49

<PAGE>

                     GE GLOBAL INSURANCE HOLDING CORPORATION
                                AND SUBSIDIARIES

             Notes to Consolidated Financial Statements (continued)


12.   Statutory Accounting Practices (continued)

The NAIC has adopted  minimum  risk-based  capital  requirements to evaluate the
adequacy of statutory capital and surplus in relation to an insurance  company's
risks.  Regulatory compliance with risk-based capital requirements is defined by
a ratio of a  company's  regulatory  total  adjusted  capital to its  authorized
control  level  risk-based  capital,  as defined by the NAIC.  Each of GE Global
Insurance's  domestic  insurance  company  subsidiaries   exceeded  the  minimum
risk-based capital requirements at December 31, 2001.

The Company's  international  insurance company  subsidiaries  prepare statutory
financial  statements based on local laws and regulations.  Some  jurisdictions,
such  as  the  United  Kingdom,   impose  complex  regulatory   requirements  on
reinsurance companies, while other jurisdictions,  such as Germany, impose fewer
requirements.  Local reinsurance  business conducted by the Company's  insurance
company  subsidiaries in some countries  require licenses issued by governmental
authorities.  These  licenses  may be  subject  to  modification  or  revocation
dependent on such  factors as amount and types of reserves  and minimum  capital
and solvency tests. Jurisdictions may also impose fines, censure and/or criminal
sanctions for violation of regulatory requirements.

Effective  January 1, 2001,  certain of the Company's  international  operations
(licensed in the European  Union  ("EU")  member  states) are required to comply
with the EU Directive on Supplementary  Supervision of Insurance Undertakings in
an Insurance  Group.  This directive is designed to address  solvency issues for
groups of insurance  companies and supplements  the solvency tests  historically
performed on individual insurance companies.  The main goal of this directive is
to  assess  the  overall  capital  available  to the  group,  rather  than on an
individual company basis, and identify potential risks. The Company is currently
in the process of performing such required solvency tests in anticipation of the
first filing in 2002.

13.   Contingencies

There are no pending legal  proceedings  beyond the ordinary  course of business
that, in the opinion of the Company's management, based on information available
at the  date of  this  report,  would  have a  material  adverse  effect  on the
Company's  consolidated results of operations or financial condition,  except as
noted in the following paragraph.

As a result of the  September  11, 2001  terrorist  attacks,  both towers of the
World  Trade  Center  in  New  York  City  ("WTC")  were  completely  destroyed.
Industrial  Risk Insurers  ("IRI"),  an affiliate of ERC, was one of the primary
insurers  of the WTC  with an  occurrence  policy  limit  of  $237  million.  In
addition,  ERC reinsured part of the various other primary  insurers of the WTC,
limits of which are also written on a per occurrence basis. The principal lessee
of the WTC is alleging  that the damage to (i.e.,  the loss of) each tower was a
separate  occurrence.  It is the  contention of all insurers of the WTC that the
policies  were  written  in such a way  that  the  loss of both  towers  in this
instance  constituted one  occurrence.  Suit has been filed in the United States
District Court in New York seeking a declaratory judgment on this question.  IRI
is a party to this suit,  as are several of ERC's  reinsureds.  Discovery in the
suit(s) is  underway.  Both IRI and ERC have  retrocessional  coverage  on their
exposure  to WTC  losses  covering  a  portion  of losses  incurred.  Management
believes that there is compelling  evidence supporting their contention that the
loss of both towers  constituted a single  occurrence of loss and is prepared to
defend  this  position  vigorously   (including  litigation  if  required)  and,
accordingly, has established claim reserves on this basis.


                                       50

<PAGE>

                     GE GLOBAL INSURANCE HOLDING CORPORATION
                                AND SUBSIDIARIES

             Notes to Consolidated Financial Statements (continued)

14.   Fair Value of Financial Instruments

Assets  and  liabilities  that  are  reflected  in  the  accompanying  financial
statements  at fair value are not included in the  following  disclosures;  such
items include cash and equivalents,  investment securities,  amounts due from or
to  related  parties,   accrued  investment  income,  separate  accounts,  other
receivables  and  payables  and,   beginning  in  2001,   derivative   financial
instruments.  Other assets and  liabilities  - those not carried at fair value -
are discussed in the following pages. Apart from certain marketable  securities,
few of the instruments discussed below are actively traded and their fair values
must often be determined using models. Although management has made every effort
to develop the fairest  representation of fair value for this section,  if would
be unusual if the  estimates  could  actually have been realized at December 31,
2001 or 2000.

A description of how fair values are estimated follows.

Accumulated contract values - Based on expected future cash flows, discounted at
currently   offered  interest  rates  for  similar   contracts  with  maturities
consistent with those remaining for the contracts being valued.

Financial guaranty  reinsurance - Based on estimated premium rates that would be
charged and commissions that would be allowed at the financial statement date.

Borrowings - Based on quoted market prices or market comparables.

All other instruments - Based on comparable  transactions,  market  comparables,
discounted future cash flows,  quoted market prices and/or estimates of the cost
to terminate or otherwise settle obligations to counterparties.


Information  about certain assets and liabilities  that were not carried at fair
value at December 31, 2001 and 2000, is summarized as follows:
<TABLE>
<CAPTION>



                                                    December 31, 2001                             December 31, 2000
                                         ------------------------------------------  --------------------------------------------
                                                          Assets (liabilities)                          Assets (liabilities)
                                                      -----------------------------               -------------------------------
                                                               Estimated Fair Value                          Estimated Fair Value
                                           Notional   Carrying --------------------   Notional    Carrying   --------------------
(In millions)                               Amount      Amount    High      Low        Amount      Amount      High       Low
                                         ------------------------------------------   -------------------------------------------

<S>                                           <C>         <C>      <C>       <C>        <C>          <C>        <C>        <C>

Assets:
  Other cash financial instruments            (a)         45       46        46         (a)          93         95         95

Liabilities:
  Borrowings (b)                              (a)     (1,655)  (1,795)   (1,795)        (a)      (1,654)    (1,711)    (1,711)
  Accumulated contract values                 (a)     (1,846)  (1,851)   (1,851)        (a)      (1,060)    (1,039)    (1,039)
  Financial guaranty reinsurance           1,930          (9)     (10)      (13)     3,877          (19)       (21)       (28)
  Performance guarantees,
    principally letters of credit            687           -        -         -        644            -          -          -
</TABLE>



(a)  These financial instruments do not have notional amounts.
(b)  See Note 9.

One of the Company's subsidiaries is the beneficiary of a $180 million letter of
credit issued by an outside bank to secure the collectibility of certain accrued
reinsurance-related  receivables.  This letter of credit was  excluded  from the
above table as the  arrangement  includes a full guarantee by the Company in the
event the letter of credit is drawn.


                                       51

<PAGE>



                     GE GLOBAL INSURANCE HOLDING CORPORATION
                                AND SUBSIDIARIES

             Notes to Consolidated Financial Statements (continued)

14.      Fair Value of Financial Instruments (continued)

Derivatives and Hedging

The Company's  global business  activities  routinely deal with  fluctuations in
interest rates, in currency  exchange rates and other asset prices.  The Company
applies strict policies to managing each of these risks,  including prohibitions
on  derivatives   trading,   derivatives   market-making  or  other  speculative
activities.  These policies require the use of derivative instruments in concert
with other techniques to reduce or eliminate these risks.

On January 1, 2001,  the Company  adopted SFAS 133,  Accounting  for  Derivative
Instruments and Hedging Activities,  as discussed in note 2. The paragraphs that
follow   provide   additional   information   about   derivatives   and  hedging
relationships in accordance with the requirements of SFAS 133.

Cash Flow Hedges

Under  SFAS 133,  cash flow  hedges are hedges  that use simple  derivatives  to
offset the variability of expected future cash flows. Variability can arise from
changes in interest rates or currency exchange rates. For example, certain loans
used to finance the Company's  foreign  operations are denominated in functional
currencies which are not reporting currency. To eliminate the currency exposure,
the  Company  will  contractually  commit to pay a fixed rate of interest in the
functional  currency to a counterparty  who will pay the Company a fixed rate of
interest in the reporting currency (a "currency swap"). These currency swaps are
then  designated as a cash flow hedge of the associated  foreign  currency fixed
rate loan. If, as would be expected,  the  derivative is perfectly  effective in
offsetting  variability due to changes in currency  exchange rates on the loans,
changes in its fair value are  recorded  in a separate  component  in equity and
released to earnings  contemporaneously  with the earnings effects of the hedged
item. Further information about hedge effectiveness is provided below.

During 2001, an amount of $1.0 million was  transferred  to earnings  along with
the earnings effects of the related forecasted  transaction for no net impact on
earnings.  At December 31, 2001,  amounts  related to derivatives  qualifying as
cash flow hedges  amounted to a reduction  of equity of $2.0  million,  of which
$1.5 million was expected to be transferred to earnings in 2002. In 2001,  there
were no forecasted  transactions that failed to occur. At December 31, 2001, the
term of the derivative instrument hedging a forecasted transaction,  except that
related to variability due to changes in foreign  currency  exchange rates on an
existing financial instrument, was zero.

Net Investment Hedges

The net  investment  hedge  designation  under  SFAS  133  refers  to the use of
derivative  contracts or cash instruments to hedge the foreign currency exposure
of a net investment in a foreign operation.  At the Company,  currency exposures
that result from net  investments  in  affiliates  are  managed  principally  by
funding assets  denominated in local currency with debt denominated in that same
currency.  In certain  circumstances,  such exposures are managed using currency
forwards and, until the first quarter of 2001, cross currency swaps.

Derivatives Not Designated as Hedges

SFAS 133  specifies  criteria  that must be met in order to apply any of the two
classes of hedge accounting.  For example, hedge accounting is not permitted for
hedged  items that are  marked to market  through  earnings.  The  Company  uses
derivatives to hedge exposures when it makes economic sense to do so,  including
circumstances  in which the  hedging  relationship  does not  qualify  for hedge
accounting as described in the following paragraph.  Under SFAS 133, derivatives
that do not qualify for hedge accounting are marked to market through earnings.

The Company uses option  contracts,  including caps,  floors and collars,  as an
economic  hedge of  changes  in equity  prices on  certain  types of assets  and
liabilities.  For example,  the Company uses equity options to hedge the risk of
changes in equity  prices  embedded in  insurance  liabilities  associated  with
annuity contracts.

                                       52

<PAGE>

                     GE GLOBAL INSURANCE HOLDING CORPORATION
                                AND SUBSIDIARIES

             Notes to Consolidated Financial Statements (continued)

14.  Fair Value of Financial Instruments (continued)

Fair Value of Derivatives

At December  31,  2001,  the fair value of  derivatives  in a gain  position and
recorded in "other  assets" is $394 million and the fair value of derivatives in
a loss position and recorded in "other liabilities" is $64 million.

The following table provides fair value information about derivative instruments
for the year 2000.  Following  adoption  of SFAS 133 on  January  1,  2001,  all
derivative  instruments  are reported at fair value in the financial  statements
and similar disclosures for December 31, 2001, are not relevant.
<TABLE>
<CAPTION>


                                                  December  31, 2000
                                       -----------------------------------------
                                                       Assets(liabilities)
                                                 -------------------------------
                                       Notional  Carrying
(In millions)                           Amount    Amount   Estimated Fair Value
                                       --------  --------  ---------------------
<S>                                      <C>       <C>              <C>

Assets:
  Options, including "floors"            $209      $  6             $ 12

Liabilities:
  Currency forwards                       591         2                2

Other firm commitments:
 Cross currency swaps                     647       292              275
</TABLE>



The Company is exposed to credit-related  losses in the event of non-performance
by  the  counterparties  to  various  contracts,  but it  does  not  expect  the
counterparties  to fail to meet  their  obligations  due to  rigid  counterparty
credit exposure policies employed.

                                       53

<PAGE>


                     GE GLOBAL INSURANCE HOLDING CORPORATION
                                AND SUBSIDIARIES

             Notes to Consolidated Financial Statements (continued)


15.   Segment Information

The Company  conducts  its  operations  principally  through the  following  two
business segments:

Property and Casualty Insurance/Reinsurance Segment (Property/Casualty)

The domestic property/casualty  operations of the Company include reinsurance of
most property/casualty lines of business, including general liability, property,
excess workers' compensation and auto liability in the United States, Canada and
business  written in the United States where the reinsured is outside the United
States.  In addition,  the Company  provides  insurance and  reinsurance for the
healthcare  industry,  conducts  excess and surplus  lines and direct  specialty
insurance  business  and  participates  in  financially   oriented   reinsurance
treaties.

International  property/casualty  operations are conducted  through a network of
subsidiaries  and  branch  offices  located  throughout  the world  and  include
reinsurance of property/casualty business in those countries and elsewhere.

Life Reinsurance Segment (Life)

The  domestic  and   international   life  operations  of  the  Company  include
reinsurance of life and health insurance and annuity products and  participation
in financially oriented reinsurance treaties.  The international life operations
are conducted  through  subsidiaries  and branch  offices as detailed  above and
include reinsurance of life business in those countries and elsewhere.

The Company's industry segment activity is summarized as follows:
<TABLE>
<CAPTION>


                                                   2001 - Industry Segments
                                               ---------------------------------
                                               Property/
(In millions)                                  Casualty     Life   Consolidated
                                               ---------------------------------

<S>                                            <C>        <C>        <C>
Net premiums written                           $  5,551   $ 1,841    $  7,392
                                               ========   =======    ========

Net premiums earned                            $  5,302   $ 1,883    $  7,185
Net investment income                               833       369       1,202
Net realized gains on investments                   380        56         436
Other revenues                                      210       158         368
                                                -------    ------     -------
Total revenues                                    6,725     2,466       9,191
                                                -------    ------     -------

Claims, claim expenses and policy benefits        5,389     1,586       6,975
Insurance acquisition costs                       1,397       433       1,830
Other operating costs and expenses                  665       187         852
                                                -------    ------     -------
Total costs and expenses                          7,451     2,206       9,657
                                                -------    ------     -------

Earnings (loss) before income taxes and
   cumulative effect of change in
   accounting principle                         $  (726)   $  260     $  (466)
                                                =======   =======     =======

Total assets at December 31                     $33,611   $11,507     $45,118
                                                =======   =======     =======
</TABLE>

                                       54

<PAGE>

                     GE GLOBAL INSURANCE HOLDING CORPORATION
                                AND SUBSIDIARIES

             Notes to Consolidated Financial Statements (continued)


15.  Segment Information (continued)

<TABLE>
<CAPTION>


                                                   2000 - Industry Segments
                                               ---------------------------------
                                               Property/
(In millions)                                  Casualty     Life   Consolidated
                                               ---------------------------------

<S>                                            <C>        <C>        <C>
Net premiums written                           $  6,554   $ 1,637    $  8,191
                                               ========   =======    ========

Net premiums earned                            $  6,377   $ 1,624    $  8,001
Net investment income                               953       362       1,315
Net realized gains on investments                   425        97         522
Other revenues                                      169       124         293
                                                -------    ------     -------
Total revenues                                    7,924     2,207      10,131
                                                -------    ------     -------

Claims, claim expenses and policy benefits        5,335     1,392       6,727
Insurance acquisition costs                       1,553       360       1,913
Other operating costs and expenses                  669       217         886
                                                -------    ------     -------
Total costs and expenses                          7,557     1,969       9,526
                                                -------    ------     -------

Earnings before income taxes                    $   367    $  238     $   605
                                                =======    ======     =======

Total assets at December 31                     $28,200   $10,364     $38,564
                                                =======   =======     =======
</TABLE>

<TABLE>
<CAPTION>


                                                   1999 - Industry Segments
                                               ---------------------------------
                                               Property/
(In millions)                                  Casualty     Life   Consolidated
                                               ---------------------------------

<S>                                            <C>        <C>        <C>
Net premiums written                            $ 5,883    $1,264     $ 7,147
                                                =======    ======     =======

Net premiums earned                             $ 5,622    $1,274     $ 6,896
Net investment income                               853       298       1,151
Net realized gains on investments                   617        82         699
Other revenues                                      150       135         285
                                                -------    ------     -------
Total revenues                                    7,242     1,789       9,031
                                                -------    ------     -------

Claims, claim expenses and policy benefits        4,394       991       5,385
Insurance acquisition costs                       1,467       372       1,839
Other operating costs and expenses                  637       182         819
                                                -------    ------     -------
Total costs and expenses                          6,498     1,545       8,043
                                                -------    ------     -------

Earnings before income taxes                    $   744    $  244     $   988
                                                =======    ======     =======

Total assets at December 31                     $28,203    $9,358     $37,561
                                                =======    ======     =======
</TABLE>

                                       55

<PAGE>

                     GE GLOBAL INSURANCE HOLDING CORPORATION
                                AND SUBSIDIARIES

             Notes to Consolidated Financial Statements (continued)


15.  Segment Information (continued)

The Company's  business by geographic area is summarized in the following table.
Allocations  to the domestic  geographic  area include  business  related to the
United States and Canada, as well as business written in the United States where
the  reinsured is outside the United  States.  International  business  includes
business   written  by   subsidiaries   located   outside  the  United   States,
predominantly in Europe.
<TABLE>
<CAPTION>


                                                                        Geographic Area
                                                            -------------------------------------------
(In millions)                                               Domestic      International    Consolidated
                                                            --------------------------------------------

2001:
<S>                                                        <C>             <C>             <C>
   Revenues                                                $  5,829        $  3,362        $   9,191
   Earnings (loss) before income taxes and cumulative
     effect of change in accounting principle                  (468)              2             (466)
   Identifiable assets at December 31                        27,489          17,629           45,118

2000:
   Revenues                                                $  5,617        $  4,514         $ 10,131
   Earnings before income taxes                                 357             248              605
   Identifiable assets at December 31                        23,285          15,279           38,564

1999:
   Revenues                                                $  5,301        $  3,730         $  9,031
   Earnings before income taxes                                 667             321              988
   Identifiable assets at December 31                        22,043          15,518           37,561

</TABLE>



16.  Unaudited Quarterly Financial Data

The Company's  quarterly  financial  results and other data in 2001 and 2000 are
summarized as follows:
<TABLE>
<CAPTION>


                                                      Year ended December 31, 2001
                                              ---------------------------------------------
                                               First       Second       Third        Fourth
(In millions)                                 Quarter     Quarter      Quarter      Quarter
                                              ---------------------------------------------

<S>                                           <C>          <C>          <C>          <C>
Net premiums earned                           $2,011       $2,000       $1,066       $2,108
Net investment income                            316          290          303          293
Total costs and expenses                       2,332        2,339        2,100        2,886
Net earnings (loss)                               71          126         (238)        (154)
</TABLE>

<TABLE>
<CAPTION>


                                                      Year ended December 31, 2000
                                              ---------------------------------------------
                                               First      Second       Third        Fourth
                                              Quarter     Quarter     Quarter      Quarter
                                              ---------------------------------------------

<S>                                           <C>          <C>          <C>          <C>
Net premiums earned                           $1,738       $1,925       $1,908       $2,430
Net investment income                            290          326          348          351
Total costs and expenses                       2,050        2,380        2,354        2,742
Net earnings                                     104          195          134          148
</TABLE>

                                       56


<PAGE>

























                          Financial Statement Schedules









                                       57
<PAGE>
<TABLE>
<CAPTION>



                                                                     Schedule II

                     GE GLOBAL INSURANCE HOLDING CORPORATION
                                AND SUBSIDIARIES

                  Condensed Financial Information of Registrant
                                (Parent Company)

                              Statement of Earnings


                                                       Year ended December 31,
                                                    ----------------------------
(In millions)                                        2001        2000       1999
                                                    ----------------------------

<S>                                                 <C>        <C>         <C>
Revenues
Net investment income                               $  12      $   11      $   1
Equity in undistributed earnings (losses)            (239)        582        393
Dividends from subsidiaries                           136          88        387
Other income                                           21           7          -
                                                    -----       -----       ----
Total revenues                                        (70)        688        781
                                                    -----       -----       ----

Costs and Expenses
Interest expense                                      127         121         68
Other operating costs and expenses                     52          34         26
                                                    -----        ----        ---
Total costs and expenses                              179         155         94
                                                    -----        ----        ---

Earnings before income taxes                         (249)        533        687

Income tax benefit                                     54          48         33
                                                    -----        ----       ----

Net earnings (loss)                                 $(195)       $581       $720
                                                    =====        ====       ====
</TABLE>


See Notes to Condensed Financial Information of Registrant.


                                       58

<PAGE>
<TABLE>
<CAPTION>

                                                                     Schedule II

                     GE GLOBAL INSURANCE HOLDING CORPORATION
                                AND SUBSIDIARIES

            Condensed Financial Information of Registrant (continued)
                                (Parent Company)

                         Statement of Financial Position


                                                                             December 31,
                                                                        ---------------------
(In millions)                                                              2001        2000
                                                                        ---------------------
<S>                                                                     <C>            <C>

Assets
Cash                                                                    $    24        $    1
Investment in subsidiaries                                                7,944         7,577
Fixed maturity securities available for sale, at fair value                   5             -
Short-term investments, at amortized cost                                    12            89
Indebtedness of related parties                                             198           144
Other assets                                                                 25            22
                                                                         ------        ------

Total assets                                                             $8,208        $7,833
                                                                         ======        ======

Liabilities and equity
Other liabilities                                                        $   81        $   25
Long-term borrowings                                                      1,655         1,654
Indebtedness to related parties                                             110           129
                                                                         ------        ------
   Total liabilities                                                      1,846         1,808
                                                                         ------        ------


Preferred stock, $100,000 par value; authorized,
   issued and outstanding - 1,500 shares                                    150           150
Common stock, $5,000 par value; authorized,
   issued and outstanding - 1,000 shares                                      5             5
Paid-in capital                                                           1,425           845
Retained earnings                                                         5,002         5,204
Accumulated unrealized gains on investment securities - net (a)              23           143
Accumulated foreign currency translation adjustments - (a)                 (241)         (322)
Derivatives qualifying as hedges - (a)                                       (2)            -
                                                                         ------        ------
   Total stockholder's equity                                             6,362         6,025
                                                                         ------        ------

Total liabilities and equity                                             $8,208        $7,833
                                                                         ======        ======
</TABLE>


(a)  The  sum  of  accumulated  unrealized  gains  on   investment   securities,
     accumulated  foreign  currency  translation   adjustments  and  derivatives
     qualifying as hedges constitutes  "Accumulated  nonowner changes other than
     earnings," as shown in the Consolidated  Statement of Stockholder's Equity,
     and was $(220)  million  and  $(179)  million  at  year-end  2001 and 2000,
     respectively.

See Notes to Condensed Financial Information of Registrant.

                                       59


<PAGE>
<TABLE>
<CAPTION>

                                                                     Schedule II

                     GE GLOBAL INSURANCE HOLDING CORPORATION
                                AND SUBSIDIARIES

            Condensed Financial Information of Registrant (continued)
                                (Parent Company)

                             Statement of Cash Flows


                                                                 Year ended December 31,
                                                              ---------------------------
(In millions)                                                  2001       2000      1999
                                                              ---------------------------
<S>                                                           <C>         <C>       <C>

Cash Flows From Operating Activities
Net earnings (loss)                                           $(195)      $581      $720
Adjustments to reconcile net earnings (loss) to cash
   from operating activities:
     Equity in undistributed earnings                           239       (625)     (393)
     Other, net                                                 (12)        54        (7)
                                                              -----       ----      ----
   Cash from operating activities                                32         10       320
                                                              -----       ----      ----

Cash Flows From Investing Activities
Fixed maturity securities available-for-sale:
     Purchases                                                  (46)         -         -
     Sales                                                       33          -         -
Net (purchases) sales of short-term investments                  77         (7)      (34)
Investment in subsidiaries                                     (440)      (108)     (694)
                                                              -----      -----     -----
   Cash used for investing activities                          (376)      (115)     (728)
                                                              -----      -----     -----

Cash Flows From Financing Activities
Proceeds from short-term borrowings                               -        126       694
Payments on short-term borrowings                               (26)      (708)     (426)
Proceeds from long-term borrowings                                -        691       395
Capital contribution received                                   400          -         -
Dividends paid                                                   (7)        (7)     (251)
                                                              -----       ----     -----
   Cash from financing activities                               367        102       412
                                                              -----       ----     -----

Increase (decrease) in cash                                      23         (3)        4
Cash at beginning of year                                         1          4         -
                                                              -----       ----      ----
Cash at end of year                                           $  24       $  1      $  4
                                                              =====       ====      ====
</TABLE>


See Notes to Condensed Financial Information of Registrant.

                                       60


<PAGE>

                                                                     Schedule II
                     GE GLOBAL INSURANCE HOLDING CORPORATION
                                AND SUBSIDIARIES

             Notes to Condensed Financial Information of Registrant
                                (Parent Company)


1.   Basis of Presentation

GE  Global  Insurance   Holding   Corporation  ("GE  Global   Insurance")  is  a
wholly-owned  subsidiary of General Electric Capital Services,  Inc., which is a
wholly-owned subsidiary of General Electric Company ("GE Company").

GE Global Insurance's primary assets are its 100% investment in the common stock
of ERC, a  Missouri-domiciled  property and casualty reinsurance company, GE Re,
an  Illinois-domiciled  property and casualty  reinsurance  company  principally
doing   business   through    intermediaries   and   Medical   Protective,    an
Indiana-domiciled  property and casualty insurance company.  The common stock of
Medical Protective was assigned by ERC to GE Global Insurance effective December
31,  1999.  ERC, GE Re and Medical  Protective  own 100% of the common  stock of
various other property and casualty  insurance/reinsurance  and life reinsurance
companies.

GE Global Insurance is included in the consolidated federal income tax return of
GE Company.  The provision for estimated taxes payable includes the effect of GE
Global Insurance on the consolidated return.

In accordance  with the  requirements  of Regulation  S-X of the  Securities and
Exchange  Commission,  the financial  statements of the registrant are condensed
and omit many disclosures presented in the consolidated financial statements and
the notes thereto.

2.       Dividends from Subsidiaries

Cash dividends paid to GE Global Insurance by its consolidated subsidiaries were
$136  million,   $109  million  and  $323  million  in  2001,   2000  and  1999,
respectively.

                                       61

<PAGE>
<TABLE>
<CAPTION>

                                                                                                Schedule III

                     GE GLOBAL INSURANCE HOLDING CORPORATION
                                AND SUBSIDIARIES

                       Supplementary Insurance Information


    Column A                 Column B         Column C             Column D       Column E          Column F
-------------------------------------------------------------------------------------------------------------
                             Deferred     Claims and Claim
                            Insurance       Expenses and                         Accumulated           Net
                           Acquisition      Future Policy          Unearned        Contract         Premiums
(In millions)                 Costs       Benefit Reserves         Premiums         Values           Earned
                           ------------------------------------------------------------------------------------
<S>                          <C>               <C>                  <C>            <C>               <C>
December 31, 2001:
   Property/Casualty          $ 504            $20,882              $2,598         $    -            $5,302
   Life                       1,111              4,116                 165          2,909             1,883
                             ------            -------              ------         ------            ------
   Total                     $1,615            $24,998              $2,763         $2,909            $7,185
                             ======            =======              ======         ======            ======

December 31, 2000:
   Property/Casualty          $ 547            $16,932              $2,368         $    -            $6,377
   Life                         947              3,382                 216          2,161             1,624
                              -----            -------              ------         ------            ------
   Total                     $1,494            $20,314              $2,584         $2,161            $8,001
                             ======            =======              ======         ======            ======

December 31, 1999:
   Property/Casualty         $  410            $17,435              $2,326         $    -            $5,622
   Life                       1,008              2,929                 208          2,164             1,274
                             ------            -------              ------         ------            ------
   Total                     $1,418            $20,364              $2,534         $2,164            $6,896
                             ======            =======              ======         ======            ======
</TABLE>

<TABLE>
<CAPTION>



                             Column G         Column H              Column I       Column J        Column K
                           ----------------------------------------------------------------------------------

                                                                  Amortization      Other
                                            Claims, Claim         of Deferred     Operating
                               Net          Expenses and           Insurance        Costs             Net
                            Investment     Policy Benefits        Acquisition        and           Premiums
                              Income          Incurred               Costs         Expenses         Written
                           ----------------------------------------------------------------------------------
<S>                         <C>                <C>                  <C>             <C>              <C>

December 31, 2001:
   Property/Casualty         $  833            $5,389               $1,397          $ 665            $5,551
   Life                         369             1,586                  433            187
                             ------            ------               ------          -----
   Total                     $1,202            $6,975               $1,830          $ 852
                             ======            ======               ======          =====

December 31, 2000:
   Property/Casualty         $  953            $5,335               $1,553          $ 669            $6,554
   Life                         362             1,392                  360            217
                             ------            ------               ------          -----
   Total                     $1,315            $6,727               $1,913          $ 886
                             ======            ======               ======          =====

December 31, 1999:
   Property/Casualty         $  853            $4,394               $1,467          $ 637            $5,883
   Life                         298               991                  372            182
                             ------            ------               ------          -----
   Total                     $1,151            $5,385               $1,839          $ 819
                             ======            ======               ======          =====
</TABLE>


                                       62


<PAGE>

                                                    SIGNATURES

Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  the  registrant  has duly  caused  this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
<TABLE>
<CAPTION>




                                                               GE GLOBAL INSURANCE HOLDING CORPORATION

March 8, 2002                                                  By:                /s/ Marc A. Meiches
                                                                   -------------------------------------------------
                                                                                    Marc A. Meiches
                                                                    Senior Vice President and Chief Financial Officer


Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons in the capacities and on the date
indicated.


                  <S>                                                <C>                                     <C>
              Signatures                                            Title                                    Date
              ----------                                            -----                                    ----

        /s/ RONALD R. PRESSMAN           President, Chief Executive Officer and Director                March 8, 2002
----------------------------------------
          Ronald R. Pressman             (Principal Executive Officer)

          /s/ MARC A. MEICHES            Senior Vice President, Chief Financial Officer and Director    March 8, 2002
----------------------------------------
            Marc A. Meiches              (Principal Financial Officer)

        /s/ DENNIS D. DAMMERMAN          Chairman                                                       March 8, 2002
----------------------------------------
          Dennis D. Dammerman

          /s/ JAMES A. PARKE             Director                                                       March 8, 2002
----------------------------------------
            James A. Parke

        /s/ NICHOLAS J. SPAETH           Senior Vice President and General Counsel                      March 8, 2002
----------------------------------------
          Nicholas J. Spaeth

        /s/ WILLIAM J. STEILEN           Vice President and Controller                                  March 8, 2002
----------------------------------------
          William J. Steilen             (Principal Accounting Officer)
</TABLE>


                                       63