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, 1996

                                       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 Number)


             5200 Metcalf, Overland Park, Kansas        66201
          (Address of Principal Executive Offices)    (Zip Code)

       Registrant's telephone number, including area code: (913) 676-5200

           Securities registered pursuant to Section 12(b) of the Act:

       7% Notes Due February 15, 2026              New York Stock Exchange
             (Title of Class)                     (Name of each exchange on
                                                       which registered)

           Securities registered pursuant to Section 12(g) of the Act:

                   Common Stock, par value $5,000.00 per share
                                (Title of Class)
                    -----------------------------------------

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 (ss.229.405 of this chapter) 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 February 28, 1997.  None.

At February  28,  1997,  1,000 shares of common stock with a par value of $5,000
were outstanding.

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


<PAGE>


                                TABLE OF CONTENTS

                                                                          Page
PART I
   Item 1.    Business.......................................................1
   Item 2.    Properties....................................................12
   Item 3.    Legal Proceedings.............................................12
   Item 4.    Submission of Matters to a Vote of Security Holders...........12


PART II
   Item 5.    Market for Registrant's Common Equity and Related
                  Stockholder Matters.......................................12
   Item 6.    Selected Financial Data.......................................12
   Item 7.    Management's Discussion and Analysis of Financial Condition
                  and Results of Operations.................................13
   Item 8.    Financial Statements and Supplementary Data...................20
   Item 9.    Changes in and Disagreements with Accountants on Accounting
                  and Financial Disclosures.................................20


PART III
   Item 10.   Directors and Executive Officers..............................20
   Item 11.   Executive Compensation........................................20
   Item 12.   Security Ownership of Certain Beneficial Owners
                  and Management............................................20
   Item 13.   Certain Relationships and Related Transactions................20

PART IV
   Item 14.   Exhibits, Financial Statement Schedules and Reports
                   on Form 8-K..............................................21

<PAGE>


                                     PART I

Item 1.  Business.

     GE Global Insurance Holding Corporation ("GE Global" 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 the outstanding  common stock of GE Global is owned by
General  Electric  Capital  Services,  Inc.  ("GE Capital  Services"),  formerly
General  Electric  Financial  Services,  Inc.,  which in turn is wholly-owned by
General Electric Company ("GE Company").

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  continues  to be  impacted  by  industry
consolidation,  excess market capacity and primary insurers seeking  alternative
forms of risk transfer such as insurance  captives,  structured  securities  and
derivative products.  Global reinsurers are offering ways to meet the demands of
this  changing  global  market by searching  for ways to expand  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's  principal  subsidiary  is  Employers  Reinsurance  Corporation
("ERC").  ERC was  established  in 1914  and  principally  writes  property  and
casualty  reinsurance.  ERC is the  second  largest  reinsurance  company in the
United  States,  based on 1995  statutory  net premiums  written,  and the third
largest in the world, based on 1994 statutory net premiums written.  The Company
is also a provider of life and healthcare  reinsurance  and writes some lines of
primary health, property and casualty and workers' compensation insurance.

     The Company  conducts  business and services its accounts through a network
of local offices  located in cities  throughout the world. At December 31, 1996,
the Company had 21 offices in North America,  10 offices in Europe and 8 offices
in the Asia/Pacific region.

     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. To enhance
its  responsiveness to customer needs, the Company is continuing to decentralize
underwriting  decisions  and  customer  service  in its  property  and  casualty
segment.

     The  Company   manages  and   diversifies  its  risk  through  the  careful
underwriting   of  risks,   active  claims   management   and  the  purchase  of
retrocessional   coverage.   The  Company  monitors  adherence  to  underwriting
guidelines through the use of computer systems and internal audits.

<PAGE>

     The Company's  business strategy is to continue to increase its reinsurance
market share by expanding its international  operations through internal growth,
enhancing the Company's  domestic  position with the large regional and national
primary  insurers  while  retaining  the  Company's  focus on small  and  medium
regional  customers,  by expanding the Company's product lines to take advantage
of market niche opportunities and by selectively  acquiring existing businesses.
The Company does not intend, however, to increase market share at the expense of
its underwriting results.

     The Company has expanded  its global  operations  in recent  years  through
acquisitions of both property and casualty and life reinsurance business. In the
third   quarter  of  1995,   the   Company   acquired   over  93%  of   Frankona
Ruckversicherungs-Aktien-Gesellschaft  ("Frankona   Re")  and   certain   assets
comprising    a   majority   of   the    reinsurance    business   of   Aachener
Ruckversicherungs-Gesellschaft-Aktiengesellschaft,    two    major   reinsurance
businesses   in   Germany.  Currently,  the Company's  ownership  percentage  of
Frankona  Re  has  increased  to  approximately  98%  through  the  purchase  of
additional  shares  owned by  minority shareholders. The Company also acquired a
large   block   of  life  and  health  reinsurance  business  from  NRG  Victory
Reinsurance Limited in the United Kingdom during 1994.

     These   acquisitions   together  with  existing  companies  in  London  and
Copenhagen have been fully  integrated and these individual  companies  together
are marketed as the "ERC  Frankona  Group." The  coordinated  activities  of the
individual  companies of the ERC Frankona Group produce  synergies in its global
reinsurance business.  In combining and integrating the various businesses,  the
ERC Frankona  Group has  carefully  evaluated  the resulting mix of business and
accumulation of risks. The  accumulation of risks has been  proactively  managed
through adjustment of the Company's  retrocession program and a reduction in ERC
Frankona Group's aggregate exposures on certain reinsurance programs.

     Also in recent years,  the Company has expanded its global business through
the extension of its local office  network.  The Company  opened offices in Hong
Kong in 1994, Tokyo and Mexico City in 1995 and Sydney, Melbourne,  Brisbane and
Auckland in 1996.  Consistent with its global  expansion  strategy,  the Company
anticipates further expanding its presence in the Asia/Pacific and Latin America
regions.

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

<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 specialty 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  specialty
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
following table shows the geographic  breakdown,  based on net premiums written,
of the Company's principal product lines.

<TABLE>
<CAPTION>
                                               Year ended December 31,
                               -----------------------------------------------------
 (In millions)                       1996              1995              1994
                               -----------------------------------------------------
                               Domestic  Int'l   Domestic  Int'l   Domestic  Int'l
                               -----------------------------------------------------
<S>                             <C>     <C>       <C>     <C>       <C>       <C>
Property and Casualty Segment
   Property and Casualty.....   $1,167  $2,196    $1,421  $1,002    $1,276    $405
   Healthcare................      405       -       522       -       532       -
   Specialty.................      169       -       178       -       167       -
Life Segment.................      189     447       116     322        59     134
                                ------  ------    ------  ------    ------    ----
   Total.....................   $1,930  $2,643    $2,237  $1,324    $2,034    $539
                                ======  ======    ======  ======    ======    ====
</TABLE>

     The  following  is a summary  description  of the  Company's  domestic  and
international business based on the Company's 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 74%
of the Company's  worldwide net premiums written in 1996. 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 "tail".

     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   domestic  property  and  casualty  business  is  conducted
primarily  throughout the United States and Canada.  For the year ended December
31, 1996,  approximately 46% of the Company's domestic net premiums written from
the  property and casualty  segment  were  derived  from  property  reinsurance,
approximately 40% from casualty reinsurance,  approximately 8% from aviation and
marine  reinsurance and approximately 6% from other lines of reinsurance.  Based
on 1996  net  premiums  written,  approximately  62% of the  Company's  domestic
property and casualty  reinsurance  was written on a direct  basis.  The Company
writes  the  remaining  property  and  casualty   reinsurance  business  through
reinsurance brokers.


<PAGE>


     The  Company's   international  property  and  casualty  business  services
worldwide markets, including Germany,  Scandinavia,  the United Kingdom, France,
Italy,  Spain and countries in the Middle East and Far East.  For the year ended
December 31,  1996,  based on 1996 net premiums  written,  64% of the  Company's
international  property and casualty business was written on a direct basis with
the  remainder  written  through  brokers.  Approximately  49% of the  Company's
international  net premiums  written from property and casualty  reinsurance was
derived from property  reinsurance,  approximately 18% from casualty reinsurance
and approximately 22% from aviation and marine reinsurance.

     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.  Although this  consolidation  has
decreased  the number of  reinsurers,  it has  increased the number of companies
that are  competitive  with the Company.  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,  directors and officers,
and long-haul trucking  liability.  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  in  recent  years.
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, both domestically and internationally.

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

     The  changes  in the  healthcare  delivery  systems  have led to  increased
competition  in the healthcare  insurance  market.  Companies that  historically
specialized  in  physician  business  are now  expanding  their  scope  to write
hospital  professional  liability and  companies  that  specialized  in hospital
professional  liability are  aggressively  competing  for physician  business to
serve  the  needs of  their  hospital  clients  that  are  purchasing  physician
practices.

     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  accident  and health  coverage,  utilizing
multiple products and disciplines to provide healthcare solutions.

     Specialty  Insurance.  An additional  component of the  Company's  domestic
property and casualty  business is its specialty  insurance  product line, which
generally  consists of commercial  property and casualty  policies  written on a
primary basis in niche markets. The Company's specialty business concentrates on
providing commercial insurance products for target markets, usually professional
associations  and  homogeneous  groups.   These  products  include  professional
liability  programs,  communications/media  liability  coverages  and some niche
programs in the general property/casualty area. This coverage provides insurance
for errors and omissions (E&O) arising out of the professional activities of the
insureds.  Professional  classes  underwritten  include  property  and  casualty
insurance agents and brokers, life and health insurance agents and brokers, real
estate professionals, educators and school board members, directors and officers
(not-for-profit),  and  a few  miscellaneous  classes  such  as  travel  agents,
computer consultants,  and marketing consultants.  The majority of this business
provides  coverage  to  property  and  casualty  and life  insurance  agents and
brokers, and real estate professionals.

     Competition  for the  classes of  business  underwritten  by the  Company's
specialty  insurance product line has recently  increased as more companies have
redirected their resources to the specialty niche business.  In order to compete
for this  business,  the Company has provided  value-added  services,  including
enhanced underwriting services, to its specialty line customers.


<PAGE>


     Life Reinsurance Segment

     Life Reinsurance.  The Company is engaged in the reinsurance of traditional
life insurance  products,  including term, whole and universal life,  annuities,
group  long-term  health and health  products  and the  provision  of  financial
reinsurance to life insurers.  Based on net premiums  written,  life reinsurance
accounted for approximately 14% of the Company's worldwide business in 1996.

     With respect to life  reinsurance,  the Company  writes  mostly on a direct
basis with primary insurers. The Company's traditional life reinsurance business
consists principally of treaty business and is written generally on an excess of
loss basis.  The  Company's  domestic  life  reinsurance  business is  comprised
exclusively of traditional  life  reinsurance  contracts and is written in every
state  in the  United  States.  The  Company's  international  life  reinsurance
business  services  worldwide  markets,  including the United  Kingdom,  France,
Spain,  Scandinavia,  Italy, Singapore,  Mexico, Israel and Greece. For the year
ended December 31, 1996, 74% of the Company's international life reinsurance net
premiums  written were for  traditional  life  reinsurance  with the balance for
healthcare reinsurance.

     The Company believes that increases in life expectancy, 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. In response to these trends,  the Company has
expanded its presence in the international life reinsurance market by increasing
its presence in the market for reinsurance of annuity providers.

     Financial  Reinsurance.  Financial  reinsurance  is  primarily  designed to
enhance the  current  statutory  surplus of the ceding  company  while  reducing
future statutory earnings as amounts are repaid to the reinsurer. This financial
transaction is effectively  collateralized by anticipated  future income streams
from selected  insurance  policies.  The Company  writes  financial  reinsurance
through brokers and generally only for companies with credit ratings of not less
than "A" at the  inception  of the  policy and that have a minimum  capital  and
surplus of $15 million.  Financial reinsurance typically has a duration of three
to  five  years.  Historically,   fees  generated  by  the  Company's  financial
reinsurance  business have not been a significant  contributor  to the Company's
consolidated revenues or net income.

Property and Casualty Reserves for Unpaid Claims and Claim Expenses

     Domestic.  The Company's domestic  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 and new concepts
of  liability.  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  (the
"tail").  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  reflected  in the  financial
statements in the period in which the adjustment occurs.

     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  of the  Company  based on  subsequent
developments and audits of ceding companies.


<PAGE>


     In accordance with industry  practice,  the Company 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.

     International.   The   Company's   international   property   and  casualty
reinsurance  operations  establish  their reserves using  analytical  techniques
similar  to those  utilized  by GE  Global's  domestic  subsidiaries.  They also
maintain  IBNR  reserves  using  actuarial  and  statistical  projections.   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.  As of December 31, 1996,  approximately 2% of the Company's net
international reserves ($78 million) related to business acquired by the Company
from Assurance Compagniet Baltica Aktiesellskab ("Baltica") in 1988. At the time
of the  acquisition,  the Company  obtained from Baltica a 90% loss  development
guarantee,  pursuant  to which  Baltica  is  obligated  to pay the  Company,  at
December 31, 1997, 90% of the amount of claim reserve development  (adjusted for
certain income and expenses) from 1988 to such date.

     Reserve Development. The table that follows presents the development of net
balance sheet  liabilities of ERC and  subsidiaries  for unpaid claims and claim
expenses for 1986 through 1996.

     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 1986 to 1996.
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, etc., through up to 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, 1996",  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, 1996, 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.  By way of example,  the
deficiency for the year 1994,  calculated as of December 31, 1996,  represents a
deficiency  in the  Company's  original  estimate  of  unpaid  claims  and claim
expenses for 1994 and prior years.

     The last seven  lines of data  present  the  development  of  reserves on a
"gross of reinsurance" basis, reconciled to the "net of reinsurance basis" shown
in the immediately preceding tables.


<PAGE>


<TABLE>
<CAPTION>
                                         Changes in Historical Reserves for Unpaid Claims and Claim Expenses
                                             For the Last Ten Years - GAAP Basis as of December 31, 1996

                                                                Year ended December 31,
                        ----------------------------------------------------------------------------------------------------
(In millions)              1986     1987     1988     1989     1990     1991     1992     1993     1994     1995     1996
                        ----------------------------------------------------------------------------------------------------
<S>                       <C>      <C>      <C>      <C>      <C>      <C>      <C>      <C>      <C>      <C>      <C>
Net liability for
   unpaid claims and
   claim expenses         $2,083   $2,620   $3,087   $3,338   $3,579   $3,596   $3,991   $4,525   $5,071   $9,351  $ 9,458
Paid (cumulative) as of:
One year later.......        554      615      681      706      747      665      802      949    1,115    1,964
Two years later......        899    1,006    1,064    1,125    1,119    1,103    1,274    1,602    1,804      ---
Three years later....      1,202    1,314    1,432    1,469    1,524    1,499    1,739    2,054      ---      ---
Four years later.....      1,429    1,553    1,687    1,746    1,772    1,784    2,036      ---      ---      ---
Five years later.....      1,612    1,754    1,919    1,929    1,989    2,008      ---      ---      ---      ---
Six years later......      1,764    1,945    2,065    2,072    2,173      ---      ---      ---      ---      ---
Seven years later....      1,901    2,063    2,221    2,229      ---      ---      ---      ---      ---      ---
Eight years later....      1,998    2,181    2,347      ---      ---      ---      ---      ---      ---      ---
Nine years later.....      2,103    2,284      ---      ---      ---      ---      ---      ---      ---      ---
Ten years later......      2,194      ---      ---      ---      ---      ---      ---      ---      ---      ---

Net liability
   re-estimated as of:

One year later.......     $2,177   $2,746   $3,134   $3,390   $3,616   $3,625   $3,919   $4,612   $5,173   $9,192
Two years later......      2,385    2,861    3,220    3,482    3,583    3,587    4,066    4,656    5,313      ---
Three years later....      2,541    2,941    3,346    3,462    3,564    3,701    4,095    4,793     ----      ---
Four years later.....      2,672    3,057    3,360    3,472    3,654    3,687    4,238      ---     ----      ---
Five years later.....      2,807    3,094    3,406    3,537    3,635    3,818      ---      ---     ----      ---
Six years later......      2,848    3,151    3,470    3,521    3,758      ---      ---      ---     ----      ---
Seven years later....      2,916    3,210    3,494    3,626      ---      ---      ---      ---     ----      ---
Eight years later....      2,979    3,259    3,582      ---      ---      ---      ---      ---     ----      ---
Nine years later.....      3,036    3,324      ---      ---      ---      ---      ---      ---     ----      ---
Ten years later......      3,098      ---      ---      ---      ---      ---      ---      ---      ---      ---

Redundancy (Deficiency)
   at December 31, 1996   (1,015)    (704)    (495)    (288)    (179)    (222)    (247)    (268)    (242)     159
Effect of foreign
   exchange (1)                                 16       24      (17)     (20)               42       29     (196)
                          -------  -------  -------  -------  -------  -------   ------  -------- -------  -------

Redundancy (Deficiency)
   at December 31,
   1996, excluding
   foreign exchange      $(1,015) $  (704)  $ (479)  $ (264)  $ (196)  $ (242)  $ (247)  $ (226)  $ (213)   $ (37)
                         ======== ========  =======  =======  =======  =======  =======  =======  =======   ======
</TABLE>

<TABLE>
<CAPTION>

(In millions)                                                                    1992     1993     1994     1995     1996
                                                                                ------------------------------------------
<S>                                                                             <C>      <C>      <C>      <C>     <C>
Gross liability-end of year...................................................  $4,815   $5,312   $6,020  $11,145  $10,869
Reinsurance recoverables on unpaid claims and claim expenses..................     824      787      949    1,794    1,411
                                                                                ------   ------   ------  -------  -------
Net liability-end of year.....................................................   3,991    4,525    5,071    9,351    9,458
                                                                                ------   ------   ------  -------  =======
Gross re-estimated liability-latest...........................................   5,253    5,813    6,424   11,081
Re-estimated reinsurance recoverables on latest unpaid claims
   and claim expenses.........................................................   1,015    1,020    1,111    1,889
                                                                                ------   ------   ------  -------
Net re-estimated liability-latest.............................................   4,238    4,793    5,313    9,192
                                                                                ------   ------   ------  -------
Gross cumulative redundancy (deficiency)......................................  $ (438)  $ (501)  $ (404) $    64
                                                                                ======   ======   ======  =======
<FN>
(1)  The foreign currency translation impact on the cumulative redundancy
     (deficiency) arises from the difference between the net liability for
     unpaid claims and claim expenses translated at the exchange rates at the
     end of the year in which the liabilities were originally estimated, and
     the exchange rates during the years in which such liabilities were paid
     or at the end of the year in which the liabilities were re-estimated.
</FN>
</TABLE>
Note:  For a description of the purpose of the above table and the various table
sections, please refer to the immediately preceding sections entitled "Reserve
Development."


<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. The claims and claim expenses reserve
deficiencies  developed  to December 31,  1996,  as  reflected in the  preceding
table, included reserve deficiencies of approximately $367 million in 1986, $257
million in 1987,  $181 million in 1988,  $130 million in 1989 and $98 million in
1990 related to the general  liability  business on the books of Puritan  Excess
and Surplus Lines Insurance Company ("PESLIC") before the Company's  acquisition
of PESLIC in 1994. Prior to 1994, PESLIC was owned by GE Capital.  Additionally,
beginning in 1985 the Company strengthened the reserves for its excess liability
and workers' compensation business for qualified self-insured employers.  Claims
and claim expenses  reserve  development  in the mid 1980's in these  businesses
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 expenses reserve  development by
increasing rates and strengthening  claims and claim expenses reserves.  This is
reflected,  with respect to the Company,  in the  significant  reductions in the
reserve deficiencies in recent years.

     To a lesser degree,  development of asbestos and  environmental  claims has
affected  the  Company's  results.  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. Also affecting the reserve
structure  has been an  increase  in both  frequency  and  severity  of  claims.
Partially offsetting the above factors is favorable  development in recent years
in medical professional liability and facultative casualty businesses as well as
an increase in net retentions by ceding companies.

     The  reconciliation  of reserves for unpaid claims and claim  expenses on a
GAAP basis for each of the years indicated is shown below.
<TABLE>
<CAPTION>
                                             Year ended December 31,
                                         -----------------------------
 (In millions)                             1996       1995       1994
                                         -----------------------------
<S>                                      <C>       <C>          <C>
Reserves at beginning of year..........  $11,145    $ 6,020     $5,312
Reinsurance recoverables on unpaid
   claims and claim expenses...........    1,794        949        787
                                         -------    -------     ------
Net reserves at beginning of year......    9,351      5,071      4,525
                                         -------    -------     ------
Net incurred related to:
   Current year........................    2,763      2,638      1,657
   Prior years.........................      106        104         87
                                         -------    -------     ------
Total net incurred.....................    2,869      2,742      1,744
                                         -------    -------     ------
Net payments related to:
   Current year........................      485        295        374
   Prior years.........................    1,990      1,426        949
                                         -------    -------     ------
Total net payments.....................    2,475      1,721      1,323
                                         -------    -------     ------

Foreign exchange and other.............     (287)       (54)       125
                                         -------    -------     ------
Net reserves at end of year............    9,458      6,038      5,071
Reinsurance recoverables on unpaid
   claims and claim expenses...........
                                           1,411      1,794        949
Acquired businesses unpaid claims
   and claim expenses..................        -      3,313          -
                                         -------    -------     ------
Reserves at end of year................  $10,869    $11,145     $6,020
                                         =======    =======     ======
</TABLE>

<PAGE>

     The  liabilities  for  claims and claim  expenses  in the  preceding  table
include  long-term  disability  claims that are  discounted  at a 6% rate.  As a
result of discounting the Company's  long-term  disability claims, the Company's
total  liabilities  for  claims  and  claim  expenses  have been  reduced  by an
estimated  3% at December  31, 1996 and 1995.  The  amortization  of discount is
included in current  operating  results as part of the development of prior year
liabilities.  For the years ended  December 31, 1996,  1995 and 1994,  long-term
disability  discounts  accrued as a  percentage  of claims,  claim  expenses and
policy benefits were  approximately 5%, 5% and 8%,  respectively,  and discounts
amortized were approximately 2% in 1996 and 1% in 1995 and 1994.

     The reconciliation of reserves for unpaid claims and claim expenses between
statutory basis and GAAP basis for each of the years indicated is shown below:

<TABLE>
<CAPTION>
                                                  Year ended December 31,
                                              -------------------------------
 (In millions)                                  1996        1995        1994
                                              -------------------------------
<S>                                          <C>         <C>           <C>
Statutory basis U.S. reserves.............    $ 5,875     $ 5,758      $4,966
Adjustments to GAAP basis (1).............       (435)       (413)       (383)
                                              -------     -------      ------
Net GAAP reserves for U.S. companies......      5,440       5,345       4,583
Net GAAP reserves for non-U.S. companies..      4,018       4,006         488
                                              -------     -------      ------
Net GAAP reserves.........................      9,458       9,351       5,071
Reinsurance recoverables..................      1,411       1,794         949
                                              -------     -------      ------
Gross reserves on a GAAP basis............    $10,869     $11,145      $6,020
                                              =======     =======      ======

<FN>
(1) Statutory basis reserves reclassified to other liabilities based on
risk transfer provisions of FAS No. 113.
-----------------------------------------------------------------------------
</FN>
</TABLE>
     Environmental  and  Asbestos  Exposure.  Prior to 1986,  the Company  wrote
domestic property and casualty reinsurance principally for small to medium-sized
primary  insurers  that  did  not  generally  have  environmental  and  asbestos
exposures.  Although  the  Company  has in the  last  few  years  increased  its
marketing  efforts with medium to  larger-sized  primary  insurers,  since 1986,
primary policies have tended to explicitly  exclude  environmental  and asbestos
risks  from  coverage.   The  Company's   international  property  and  casualty
reinsurance  operations are currently  being reviewed to identify  environmental
and asbestos exposures.  No estimates of these exposures are currently available
although  management does not believe the findings will have a material  adverse
effect on the  financial  position,  results of  operations or cash flows of the
Company.

     The following  table presents three calendar years of development of claims
and  claim  expenses  reserves   associated  with  the  Company's  asbestos  and
environmental claims, including case and IBNR reserves.

<TABLE>
<CAPTION>
                                                 Year ended December 31,
                                           ----------------------------------
 (In millions)                                1996        1995        1994
                                           ----------------------------------
Gross Basis:
<S>                                           <C>         <C>         <C>
   Reserve balance at January 1.........      $436        $317        $309
   Incurred claims and claim expenses...       (32)         61          25
   IBNR allocation (1)..................         -          99           -
   Claims and claim expenses paid.......        36          41          17
                                              ----        ----        ----
   Reserve balance at December 31.......      $368        $436        $317
                                              ====        ====        ====

Net Basis:
   Reserve balance at January 1.........      $196        $139        $138
   Incurred claims and claim expenses...        19          23           9
   IBNR allocation (1)..................         -          51           -
   Claims and claim expenses paid.......        21          17           8
                                              ----        ----        ----
   Reserve balance at December 31.......      $194        $196        $139
                                              ====        ====        ====

--------
<FN>
(1)  Prior to 1995, the Company's  allocation of asbestos and environmental IBNR
     reserves associated with PESLIC was primarily made on a non-specific basis.
     As of December 31, 1995,  PESLIC  specifically  allocated  IBNR reserves to
     asbestos  and  environmental  liabilities  from  a  portion  of  previously
     established IBNR reserves.
</FN>
</TABLE>
<PAGE>


     These amounts are management's best estimate,  based on currently available
information,  of claims  and claim  expense  payments  and  recoveries  that are
expected to develop in future years.  The increase in claim payments in 1996 and
1995 and  negative  incurred  claims in 1996 is  principally  due to the Company
aggressively  settling its claims and executing contract commutation  provisions
so that possible  future  adverse claim  development  is mitigated.  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 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 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,  cash flows and
financial position.

     Breast  Implant  Exposure.  The Company  has  minimal  exposure to products
liability  claims involving  silicone breast  implants.  The Company has, in the
past,   generally   avoided  the  products   liability   reinsurance   business,
specifically pharmaceutical and chemical exposures.

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

     Future policy  benefits for life and health  reinsurance  contracts are 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
range from 3.0% to 8.5% per annum at December 31, 1996.  Payments  received from
sales of investment  contracts are recognized by providing  liabilities equal to
the accumulated contract values of the policyholders' contracts.  Interest rates
credited to such  investment  contracts are guaranteed for the policy terms with
renewal rates  determined by the Company.  Such crediting  interest rates ranged
from 3.25% to 9.00% per annum in 1996.

Regulatory Matters

     GE Global and its domestic subsidiaries are subject to regulation under the
insurance  statutes,  including  insurance holding company statutes,  of various
states,  including  Missouri and Kansas,  the domiciliary  states of GE Global's
principal  domestic  insurance company  subsidiaries.  The ERC Frankona Group is
subject to regulation under insurance statutes of various foreign countries.

     General.  The regulation and supervision to which GE Global'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,  methods  of
accounting,  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 securityholders of
the regulated  reinsurer.  GE Global  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.


<PAGE>


     Risk-Based  Capital.  The National  Association of Insurance  Commissioners
("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, 1996,
each  of  GE  Global's  domestic  insurance  subsidiaries  exceeds  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.

     Dividends  by ERC.  Because  the  operations  of GE  Global  are  conducted
primarily  through ERC, GE Global is dependent upon dividends and tax allocation
and other  payments  primarily  from ERC to service  its debt and meet its other
obligations.  The payment of dividends and other payments to GE Global by ERC is
subject to limitations  imposed by the Missouri  Insurance  Code. 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 or Missouri 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  during 1997 by
ERC to GE Global  without  prior  regulatory  approval is $297  million  through
December 20, 1997, and $420 million thereafter. Of these amounts, $82 million is
committed to pay  dividends on preferred  stock issued by ERC to a subsidiary of
GE Capital Services.

     International  Regulations.  Approximately 58% 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 ERC Frankona 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 ERC  Frankona  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 ERC Frankona 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
participant policies.  Regulations governing  constitution of technical reserves
(including  equalization  reserves  required  under  German law) and  remittance
balances  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 ERC
Frankona Group's operations.

     Legislative and Regulatory Proposals. From time to time, various regulatory
and  legislative  changes have been proposed in the  insurance  and  reinsurance
industry  that may  affect  reinsurers.  A  substantial  number of  states  have
recently adopted, or are considering adopting,  laws and regulations that, among
other things, limit the ability of primary insurance companies to effect premium
rate  increases  or to cancel or not renew  existing  policies.  The  Company is
unable to predict whether any of these laws and  regulations  will be adopted in
additional  states,  the form in which  any such laws and  regulations  might be
adopted in additional  states,  or the effect,  if any, these  developments will
have on the Company.


<PAGE>



Item 2.  Properties.

     The Company and its  subsidiaries  conduct  their  businesses  from various
facilities,  most of  which  are  leased.  In  addition,  the  Company  owns its
administrative offices in Overland Park, Kansas, Copenhagen,  Denmark and Aachen
and Munich, Germany.


Item 3.  Legal Proceedings.

     There are no  pending  legal  proceedings  beyond  the  ordinary  course of
business that could have a material financial effect on the Company,  except for
an action in connection  with a dispute under specific  retrocession  agreements
relating to disability  insurance  assumed by the Company from various insurers.
The  retrocessionaire,  St. Paul Fire and Marine  Insurance  Co., has  initiated
legal  proceedings  in the  Southern  District  of New York  against the Company
seeking,  alternatively,  rescission of the retrocession  contracts or indemnity
against loss payable by the retrocessionaire under these retrocession contracts.
The Company's  motion to stay proceedings  pending  arbitration has been granted
and the dispute will be resolved by arbitration.  The total amount in dispute is
approximately $50 million.  The Company believes the retrocession  contracts are
valid and the amounts due under such contracts are recoverable. Accordingly, the
Company  has  committed  no  reserves  to  cover  any  contingent   liabilities.
Management  believes  that an adverse  outcome of this  matter  would not have a
material adverse effect on the financial position, results of operations or cash
flows of the Company.


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

     Omitted

                                                             PART II

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

     All of GE Global's  Common  Stock,  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.  GE Global paid dividends on its
Common Stock on December 20, 1996 of $58 million.

Item 6.  Selected Financial Data.

<TABLE>
                                        Consolidated Financial Data
<CAPTION>

                                                                    Year ended December 31,
                                                 ----------------------------------------------------------
(In millions)                                      1996         1995         1994         1993        1992
                                                 ----------------------------------------------------------
<S>                                               <C>          <C>          <C>          <C>         <C>
Total revenues................................   $ 5,751      $ 4,798      $ 3,148      $ 2,927     $ 2,396
Net premiums written..........................     4,573        3,561        2,573        2,413       1,832
Net investment income.........................       837          676          528          465         449
Net realized gains on investments.............       223          191          103          147         158
Earnings before income taxes..................       780          561          409          395         370
Net earnings..................................       567          437          358          312         293
Total investments.............................    16,479       15,394        9,850        8,561       6,954
Total assets..................................    25,388       25,613       14,496       11,928      10,313
Stockholder's equity..........................   $ 4,760      $ 4,191      $ 2,722      $ 2,938     $ 2,521
Return on equity (average)....................     12.7%        12.6%        12.7%        11.4%       11.9%
Stockholder's equity excluding unrealized
   gains (losses) on investment securities....   $ 4,260      $ 3,755      $ 2,888      $ 2,635     $ 2,485
Return on equity excluding unrealized gains
   (losses) on investment securities
   (average)..................................     14.1%        13.2%        13.0%        12.2%       12.0%

</TABLE>

<PAGE>



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

Overview

     Year Ended December 31, 1996 Compared to Year Ended December 31, 1995

Net premiums written in 1996 increased $1.012 billion or 28%, of which
$1.308 billion reflects recording a full year of the operating results
for the 1995 acquisitions of Frankona Re and the Aachen Re Business (the
"Acquired Businesses") in 1996 compared to recording only five months of
operating results in 1995.  This 1996 increase in net premiums written
related to the Acquired Businesses was partially offset by a decrease in
domestic property and casualty net written premiums.

Net earnings in 1996 increased $130 million or 30%, including an
increase in after-tax net realized gains on investments of $21 million.
Excluding after-tax net realized gains on investments, 1996 net earnings
increased $109 million or 35%.  This 1996 increase was primarily
attributable to the Acquired Businesses reflecting a full year's
operating results in 1996 compared to recording only five months of
operating results in 1995.  The remainder of the increase was due to
improvement in the domestic and international property and casualty
underwriting results and growth in the investment portfolio due mostly
from cash flow from international operations.  These increases were
partially offset by a 5% increase in the effective tax rate due to a
greater proportion of earnings before taxes provided by operations that
reside in higher income tax jurisdictions.


     Year Ended December 31, 1995 Compared to Year Ended December 31, 1994

Net premiums written in 1995 increased $988 million, including $561
million related to the operations of the Acquired Businesses.  The
remainder of the increase primarily related to the NRG Business acquired
in 1994 and an increase in premiums generated from new and existing
clients in both the domestic and international property and casualty
markets.

Net earnings in 1995 increased $79 million, including an increase in
after-tax net realized gains on investments of $57 million.  Excluding
after-tax net realized gains on investments, 1995 net earnings increased
$22 million.  This 1995 increase consisted of $40 million from the
Acquired Businesses and $42 million from increased net investment income
resulting from growth in the investment portfolio, due mostly to cash
flow from operations, offset by a $47 million increase in underwriting
losses primarily related to long-term disability business.



<PAGE>

<TABLE>
Domestic Property and Casualty Business
<CAPTION>
                                                     Year ended December 31,
                                                  ----------------------------
 (In millions)                                     1996       1995       1994
                                                  ----------------------------
<S>                                               <C>        <C>        <C>
Net premiums written...........................   $1,741     $2,121     $1,975
Net underwriting loss..........................      (98)      (138)      (105)
Net investment income..........................      390        395        371
Earnings before income taxes...................      415        364        336
Net realized gains on investments..............      169        135         87
Earnings before income taxes, excluding net
   realized gains on investments...............      246        229        249

GAAP ratios (1):
   GAAP claims and claim expenses ratio........    75.7%      79.1%      76.9%
   GAAP underwriting expense ratio.............    29.7%      27.4%      28.6%
                                                  ------     ------     ------
   GAAP combined ratio.........................   105.4%     106.5%     105.5%
                                                  ======     ======     ======


--------
<FN>
(1)  Represents  data for the applicable  periods  calculated in accordance with
     GAAP. Claims and claim expenses 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
     expenses ratio and the underwriting expense ratio.
</FN>
</TABLE>
     Domestic  net  premiums  written  decreased  $380  million  or 18% in 1996,
principally  due to  management's  decision  to not renew  certain  unprofitable
reinsurance  contracts  and a general  decrease in  reinsurance  premium  rates.
Domestic net premiums written increased $146 million in 1995, principally due to
the Acquired Businesses and lower retrocession costs.

     The GAAP  combined  ratio is an indicator of  underwriting  performance  in
property and casualty  reinsurance,  with a percentage lower than 100% generally
indicating an underwriting  profit.  While underwriting results expressed as the
combined ratio have been in excess of 100%,  indicating an underwriting  loss in
all years  presented,  the  operating  results of  insurance  companies  include
investment  income  which  generally  yields  an  overall  operating  profit  as
reflected  above in the caption  "Earnings  before income  taxes,  excluding net
realized  gains on  investments."  The 1996 and 1995 GAAP  combined  ratios were
moderately  impacted by catastrophe costs and certain  significant  unprofitable
reinsurance  contracts  that  management  has  elected  not to  renew.  In 1994,
catastrophe  costs,  principally  from the  Northridge,  California  earthquake,
heavily impacted the GAAP combined ratio.

     Net investment income decreased $5 million or 1% in 1996. The 1996 decrease
was due  primarily  to the  transfer of  significant  assets to the ERC Frankona
Group in the second half of 1995 which was substantially offset by investment of
cash flow from operating activites. Net investment income increased $24  million
in 1995, due primarily to the Acquired  Businesses  and growth in the investment
portfolio caused from cash flow from operating activities.

     Earnings before income taxes,  excluding net realized gains on investments,
increased $17 million or 7% in 1996,  primarily due to a 1.1% improvement in the
GAAP combined ratio as lower  catastrophe  costs and the  non-renewal of certain
unprofitable   contracts  were  partially   offset  by  a  slight  reduction  in
reinsurance premium rates.  Improvement in the GAAP combined ratio was partially
offset by a slight  decline in net  investment  income.  Earnings  before income
taxes,  excluding net realized  gains on  investments,  decreased $20 million in
1995, due primarily to an increase in long-term  disability  losses and moderate
catastrophe  losses,  partially  offset by lower  retrocession  premiums  and an
increase in net investment income.


<PAGE>


<TABLE>
International Property and Casualty Business
<CAPTION>
                                                     Year ended December 31,
                                                  ----------------------------
 (In millions)                                     1996       1995        1994
                                                  ----------------------------
<S>                                               <C>        <C>          <C>
Net premiums written........................      $2,196     $1,002       $405
Net underwriting gain (loss)................          18        (38)       (11)
Net investment income.......................         266        125         39
Earnings before income taxes................         247        107         33
Net realized gains on investments...........          31         27          6
Earnings before income taxes, excluding net
   realized gains on investments............         216         80         27

GAAP ratios (1):
   GAAP claims and claim expenses ratio.....       68.0%      73.3%      71.7%
   GAAP underwriting expense ratio..........       31.2%      29.6%      31.3%
                                                   -----     ------     ------
   GAAP combined ratio......................       99.2%     102.9%     103.0%
                                                   =====     ======     ======

--------
<FN>
(1)  Represents  data for the applicable  periods  calculated in accordance with
     GAAP. Claims and claim expenses 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
     expenses ratio and the underwriting expense ratio.
</FN>
</TABLE>
     International  property and casualty net premiums written  increased $1.194
billion or 119% in 1996, of which $1.203 billion reflects  recording a full year
of the Acquired Businesses  operating results in 1996 compared to recording only
five months of  operating  results in 1995.  This 1996  increase in net premiums
written  related to the  Acquired  Businesses  was  partially  offset by a minor
decrease in other  international  net  premiums  written,  primarily  due to the
integration of international  operations.  Net written  premiums  increased $597
million in 1995, including $426 million related to the Acquired Businesses.  The
balance of the 1995 increase related to improved market conditions,  an increase
in premium rates in Europe and intensified marketing efforts.

     The  3.7%  improvement  in the 1996  GAAP  combined  ratio  was  caused  by
favorable loss  experience and is indicative of improved  international  premium
rates and market  conditions in recent years.  The 1996 GAAP combined  ratio was
also  favorably  impacted  by a decline in both the  frequency  and  severity of
international catastrophe losses.

     Net investment  income  increased  $141 million or 113% in 1996,  including
$126  million  related  to  recording  a full  year of the  Acquired  Businesses
operating  results in 1996  compared to recording  only five months of operating
results in 1995.  The  remaining  $15 million 1996 increase was due primarily to
growth  in  the investment  portfolio  resulting  from  cash flow from operating
activities. Net  investment income  increased $86 million in 1995, due primarily
to the Acquired Businesses.

     Earnings before income taxes,  excluding net realized gains on investments,
increased  $136  million or 170% in 1996 as a result of two major  factors:  (1)
inclusion of a full year of the Acquired  Businesses  operating  results in 1996
compared to recording  only five months of  operating  results in 1995 and (2) a
significant  improvement in the underwriting results, as illustrated by the 3.7%
improvement in the GAAP combined ratio. Earnings before income taxes,  excluding
net realized gains on investments,  increased $53 million in 1995, due primarily
to the Acquired Businesses.

<PAGE>

<TABLE>
Life Reinsurance Business
<CAPTION>
                                             Year ended December 31,
                                          -----------------------------
(In millions)                               1996      1995      1994
                                          -----------------------------
<S>                                         <C>       <C>       <C>
Revenues.............................       $881      $656      $351
Earnings before income taxes.........        118        90        40
</TABLE>

     Revenues from the Company's life reinsurance segment include life insurance
premium revenues,  net investment  income, net realized gains on investments and
income from  certain  investment  related  products.  The 1996  increase of $225
million or 34%  primarily  reflects a full  year's  operating  results  from the
Acquired  Businesses and continued  expansion in the domestic and  international
life  reinsurance  business.  Revenues  increased  $305  million or 87% in 1995,
principally as a result of the Acquired Businesses.

     Earnings  before  income  taxes  increased  $28  million  or 31%  in  1996,
including a $6 million decrease in net realized gains on investments.  Excluding
net realized gains on  investments,  earnings  before income taxes increased $34
million due to a full year's operating results from the Acquired  Businesses and
continued growth in worldwide life reinsurance business.  Earnings before income
taxes  increased  $50  million  in 1995,  principally  related  to the  Acquired
Businesses and a $19 million increase in net realized gains on investments.

Liquidity and Capital Resources

     GE Global's  ability to meet its  obligations,  including  debt service and
operating expenses, and pay dividends to its shareholders depends primarily upon
receiving  sufficient  funds from its  insurance  subsidiaries.  The  payment of
dividends by ERC is subject to  restrictions  set forth in the insurance laws of
Missouri, as well as other restrictions.  Historically,  the Company's liquidity
requirements  are met by funds  provided by operations and from the maturity and
sales of investments.

     Cash  flows  from  operating  activities  primarily  consists  of  premiums
collected  during  the  period in excess of  payments  made for claims and claim
expenses.  The  1996  decrease  in  cash  flows  from  operating  activities  is
principally  due to a  slight  increase  in claim  payments  and the  timing  of
reinsurance  settlements.  The  increase  in  1995  cash  flows  from  operating
activities primarily reflects cash flow activity from the Acquired Businesses.

     Cash  used for  investing  activities  decreased  $1.377  billion  in 1996,
principally  due to the $1.022  billion  purchase of the Acquired  Businesses in
1995. The purchases of the Acquired  Businesses in 1995 were partially funded by
GE Capital Services  contributing $300 million to the equity of GE Global and GE
Capital  Corporation,  an affiliate of GE Global,  purchasing 1,500 shares of 5%
cumulative  preferred stock issued by GE Global for an aggregate  purchase price
of $150  million.  The  remaining  $355 million  1996  decrease in cash used for
investing  activities was primarily  attributable  to a decrease in purchases of
investments,  net of sales and maturities, which was caused by a decline in cash
flows from operations.

     Cash flows from  financing  activities  decreased $958 million in 1996, due
primarily to the financing and capitalization of the 1995 acquisitions described
above,  partially offset by an increase in contract deposits related to the life
financial reinsurance business.

     In 1996, GE Global  executed a $1 billion shelf  registration  statement of
senior  unsecured debt  securities,  of which $600 million is outstanding and is
rated AA by  Standard & Poor's.  The  remaining  unissued  $400  million  may be
offered from time to time in the future,  the proceeds of which will be added to
the general  funds of GE Global and made  available  to finance its  operations,
unless otherwise stated at the time of the offering.

     In  addition,  the  Company,  as of January 1,  1997,  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 shall
be  automatically  extended  for  successive  terms  of  one  year  each  unless
terminated in accordance with terms of the agreement.


<PAGE>


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 require
that no more than 2.5% of the  Company's  bond  portfolio may be invested in any
one issue of debt  securities and no more than 10% of the stock portfolio may be
invested in the equity securities of any one issuer.

     In structuring  its fixed maturity  portfolios,  the Company  considers the
duration  of its  assets  and claims  and claim  expenses  reserves.  Each fixed
maturity   portfolio  has  a  total  return  benchmark  against  which  relative
performance is measured.  The total return benchmark includes  investment income
and realized and unrealized  gains and losses on  investments.  Equity funds are
managed for total return, and performance is measured against equity benchmarks.

     On  a  worldwide   basis,  the  Company  manages  70%  of  its  investments
internally. General Electric Investment Corporation manages an additional 20% of
the Company's  investments,  and the balance is managed by unaffiliated  outside
managers.

<TABLE>
     The following table presents investment results for the Company's business.
<CAPTION>

                                                             Year ended December 31,
                                             -------------------------------------------------------
(In millions)                                     1996      1995       1994        1993       1992
                                             -------------------------------------------------------
<S>                                             <C>       <C>         <C>         <C>        <C>
Average invested assets (at cost)...........    $15,195   $12,153     $9,020      $7,395     $6,545
Net investment income.......................        837       676        528         465        449
Net effective yield.........................       5.5%      5.6%       5.9%        6.3%       6.9%
Net realized gains on investments...........    $   223   $   191     $  103      $  147     $  158

Unrealized gains (losses) on investment
   securities before deferred income taxes          798       684       (251)        622        333
</TABLE>

     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, equity securities 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. Some additional  commitment was made to equity securities in 1996 and
1995 to enhance  total  investment  return in the  longer  term.  The  Company's
domestic  life  investment  portfolios  are  largely  invested  in taxable  debt
securities.


<PAGE>


<TABLE>
     The following  table  categorizes  the Company's  domestic  fixed  maturity
portfolios by rating based on market values.
<CAPTION>
                                                         Domestic Property
                                                            and Casualty         Domestic Life
                                                     -----------------------------------------------
                                                                       December 31,
                                                     -----------------------------------------------
 (In millions)                                           1996        1995       1996       1995
                                                     -----------------------------------------------
<S>                                                       <C>        <C>         <C>        <C>
U.S. government and government agency securities...       2.6%        3.2%       5.8%       6.9%
Aaa................................................      45.7        42.1       18.8       18.3
Aa.................................................      26.3        28.3       13.2       16.9
A..................................................      16.1        19.2       13.6       15.3
Baa................................................        .2         0.3        2.3        5.0
Ba.................................................        .1         0.2         .7        1.0
Canadian securities................................       4.2         3.5        0.0        0.0
Mortgage-backed securities.........................        .1         1.1       39.8       33.4
Other..............................................       4.7         2.1        5.8        3.2
                                                        -----       -----      -----      -----
   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 table
above, 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 "A" or above.  The Canadian  securities held by the Company were
similar in quality to the other  securities  held in its  domestic  property and
casualty  portfolio.  Bonds held by the Company in its domestic life  portfolios
include mortgage-backed  securities that are matched to the liability profile of
specific life reinsurance contracts.  Investments in mortgage-backed  securities
are  limited to lower risk  tranches  and do not include  any  interest  only or
principal only elements.  Mortgage-backed securities in the Company's investment
portfolio were principally issued by Federal agencies.  The balance of the other
securities held in the domestic life portfolios were principally U.S. government
and government agency  securities and bonds with a rating of "A" or higher.  The
Company does not  contemplate  significant  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 ERC  Frankona  Group's
investment  personnel  based in Munich,  within  guidelines  established  by the
management  of the ERC  Frankona  Group and under the  overall  supervision  and
review of the investment department of ERC.

     The principal objective of the ERC Frankona 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 ERC Frankona  Group's
reinsurance  liabilities.  The ERC Frankona  Group's  investment  portfolios are
geographically  diversified with investments principally from the major European
markets and the United States.


     As of December 31, 1996, the ERC Frankona Group's  investments totaled $6.2
billion,  an increase of $204 million from December 31, 1995. The composition of
ERC Frankona Group's investments was as follows:

<TABLE>
<CAPTION>
                                                    December 31,
                                               ----------------------
                                                  1996        1995
                                               ----------------------

            <S>                                  <C>         <C>
            Fixed maturity securities.......      86.4%       86.6%
            Equity securities...............      10.4%       10.1%
            Other invested assets...........       3.2%        3.3%
                                                 -----       -----

            Total...........................     100.0%      100.0%
                                                 =====       =====
</TABLE>

<PAGE>
     The fixed maturity securities  consisted of high credit quality securities.
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  principal  and  interest
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.

     ERC Frankona  Group's foreign  exchange risk management  program assists in
mitigating its foreign currency  exposures.  The ERC Frankona Group's investment
portfolios are globally  diversified,  with most fixed maturities  having a term
less  than ten years.  The currency  structure of the  investment  portfolios is
determined  by the  underlying  reinsurance  business  and is  matched  with the
corresponding   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 foreign currency exposures.

Cyclicality

     The property and casualty  reinsurance  industry has been highly  cyclical.
Demand for reinsurance is  significantly  influenced by underwriting  results of
primary  property  and  casualty  insurance  companies  and  prevailing  general
economic and reinsurance  premium rates. 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 and
fires),  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.

New Accounting Standards

     SFAS No. 125,  Accounting  for Transfers and Servicing of Financial  Assets
and Extinguishments of Liabilities,  among other things, distinguishes transfers
of financial  assets that are sales from transfers that are secured  borrowings,
based on the control of the  transferred  assets.  SFAS No. 125 is effective for
transfers of  financial  assets  occurring  after  December  31,  1996,  and its
adoption  will not have an  effect  on the  financial  position  or  results  of
operations of the Company.

Effects of Inflation

     The Company's  ultimate  claims and claim  expenses 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  expenses  reserves,  as well as  reinsurance  premium  rates.
Generally,  the  Company's  methods used to estimate  claims and claim  expenses
reserves  and to  calculate  reinsurance  premium  rates take into  account  the
anticipated  effects of inflation in  estimating  the ultimate  claims and claim
expenses  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  expenses  reserves.  However,  until  claims  are
ultimately settled, the full effect of inflation on the Company's results cannot
be known.



<PAGE>



Item 8.  Financial Statements and Supplementary Data.

     The  Company's   Consolidated  Financial  Statements  and  the  Reports  of
Independent Auditors 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 Disclosures.

     At a meeting  held on  September  25,  1995,  the Board of Directors of the
Company  approved the  engagement  of KPMG Peat  Marwick LLP as its  independent
auditors  for the fiscal  year ending  December  31, 1995 to replace the firm of
Ernst & Young, LLP.

     The report of Ernst & Young, LLP on the Company's financial  statements for
the fiscal year ending December 31, 1994 did not contain an adverse opinion or a
disclaimer of opinion and was not qualified or modified as to uncertainty, audit
scope,  or  accounting  principles,  except that reliance has been placed on the
independent  audit  report of KPMG Peat  Marwick  LLP on  Employers  Reassurance
Corporation,  Puritan  Excess and Surplus Lines  Insurance  Company and Westport
Insurance Corporation, wholly-owned subsidiaries of ERC.

     In connection with the audit of the Company's financial  statements for the
fiscal year ended December 31, 1994, and in the subsequent interim period, there
were no  disagreements  with Ernst & Young,  LLP on any  matters  of  accounting
principles or practices,  financial statement disclosure,  or auditing scope and
procedures  which, if not resolved to the  satisfaction  of Ernst & Young,  LLP,
would have caused  Ernst & Young,  LLP to make  reference to the matter in their
report.

     The Company  requested Ernst & Young,  LLP to furnish it a letter addressed
to the Securities  and Exchange  Commission  stating  whether it agrees with the
above statements.  A copy of that letter, dated December 8, 1995 is incorporated
by reference as Exhibit 16 to this Form 10-K.


                                                            PART III

Item 10.    Directors and Executive Officers.

     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



<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 22).

     (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 22).

     (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   First  Whole Account  Aggregate Excess  of  Loss  Retrocession
                  Agreement (E1), between  Employers Reinsurance Corporation and
                  National Indemnity Company, dated January 1, 1996.

           10.2   Second Whole Account  Aggregate Excess  of  Loss  Retrocession
                  Agreement (E2), between  Employers Reinsurance Corporation and
                  Centre Reinsurance Company of New York, Dated January 1, 1996.

           10.3   Second Whole Account  Aggregate Excess  of  Loss  Retrocession
                  Agreement (E2), between  Employers Reinsurance Corporation and
                  National Union Fire Insuance Company of Pittsburgh,  PA, dated
                  January 1, 1996.

           12     Computation of ratio of earnings to fixed charges.

           16     Letter  Re  Change  in  Certified  Accountant.  (Incorporated
                  by  reference  to  Exhibit  16 of the  Company's
                  Registration Statement on Form 10, File No. 0-27394.)

           23.1   Consent of KPMG Peat Marwick LLP.

           23.2   Consent of Ernst & Young, LLP.

     (b)   Reports on Form 8-K.

           None.

<PAGE>


                               ITEM 14(a)

                GE Global Insurance Holding Corporation
                            and Subsidiaries

                                Index to
                   Consolidated Financial Statements
                                  and
                     Financial Statement Schedules


Consolidated Financial Statements                                  Page
                                                                   ----
   Reports of Independent Auditors...................................23
   Consolidated Statement of Earnings................................26
   Consolidated Statement of Financial Position......................27
   Consolidated Statement of Stockholder's Equity....................29
   Consolidated Statement of Cash Flows..............................30
   Notes to Consolidated Financial Statements........................31


Financial Statement Schedules

   Schedule II - Condensed Financial Information of Registrant.......53
   Schedule III - Supplementary Insurance Information................57




<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,
1996 and 1995, and the related statements of earnings,  stockholder's equity and
cash flows for the years then ended.  Our audits  also  included  the  financial
statement  schedules  listed in the Index at Item 14(a) as of December  31, 1996
and 1995 and for the years then ended. These consolidated  financial  statements
and  schedules  are  the  responsibility  of  the  Company's   management.   Our
responsibility  is to  express  an opinion  on these  financial  statements  and
schedules based on our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  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, 1996 and 1995, and the
results  of their  operations  and their  cash flows for the years then ended in
conformity with generally accepted accounting principles.  Also, in our opinion,
the related 1996 and 1995  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.


                                                           KPMG PEAT MARWICK LLP


Kansas City, Missouri
January 17, 1997


<PAGE>


                     REPORT OF INDEPENDENT AUDITORS


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


We  have  audited  the   accompanying   consolidated   statements  of  earnings,
stockholder's  equity and cash flows of GE Global Insurance Holding  Corporation
and  subsidiaries  for the year ended December 31, 1994. Our audit also included
the financial statement schedules listed in the Index at Item 14(a) for the year
ended  December 31, 1994.  These  financial  statements  and  schedules  are the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these  financial  statements and schedules based on our audit. We did
not audit the financial statements of Employers Reassurance Corporation, Puritan
Excess  and  Surplus   Lines   Company  and  Westport   Insurance   Corporation,
wholly-owned subsidiaries, which statements reflect earnings before income taxes
constituting 24% of the related 1994 consolidated  totals. Those statements were
audited by other  auditors  whose report has been  furnished to us. Our opinion,
insofar as it relates to data  included for Employers  Reassurance  Corporation,
Puritan Excess and Surplus Lines Company and Westport Insurance Corporation,  is
based solely on the report of other auditors.

We conducted our audit in accordance with generally accepted auditing standards.
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 audit and the report of other auditors  provide a reasonable
basis for our opinion.

In our  opinion,  based on our  audit  and the  report  of other  auditors,  the
financial statements referred to above present fairly, in all material respects,
the  consolidated  results of operations  and cash flows of GE Global  Insurance
Holding  Corporation  and  subsidiaries  for the year ended December 31, 1994 in
conformity with generally accepted accounting principles.  Also, in our opinion,
based on our  audit and the  report of other  auditors,  the  related  financial
statement  schedules,  when  considered  in  relation  to  the  basic  financial
statements  taken as a whole,  present  fairly,  in all material  respects,  the
information set forth therein.



                                                              ERNST & YOUNG, LLP

Kansas City, Missouri
January 21, 1995


<PAGE>


                      INDEPENDENT AUDITORS' REPORT


The Board of Directors of
Employers Reassurance Corporation,
Westport Insurance Corporation and
Puritan Excess and Surplus Lines Insurance Company:


We have audited the combined  statements of earnings,  stockholder's  equity and
cash flows of  Employers  Reassurance  Corporation  (ERAC),  Westport  Insurance
Corporation  (Westport) and Puritan Excess and Surplus Lines  Insurance  Company
(PESLIC)  for the  year  ended  December  31,  1994.  These  combined  financial
statements   are  the   responsibility   of  the  Companies'   management.   Our
responsibility is to express an opinion on these combined  financial  statements
based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
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 audit provides a reasonable basis for our opinion.

In our opinion,  the combined  financial  statements  referred to above  present
fairly,  in all  material  respects,  the  combined  results of  operations  and
combined cash flows of ERAC, Westport and PESLIC for the year ended December 31,
1994 in conformity with generally accepted accounting principles.

As described in Note 1, the combined financial  statements of ERAC, Westport and
PESLIC have been  prepared to facilitate  the  preparation  of the  consolidated
financial statements of GE Global Insurance Holding Corporation.



                                                           KPMG PEAT MARWICK LLP

Kansas City, Missouri
January 21, 1995


<PAGE>


<TABLE>
                GE GLOBAL INSURANCE HOLDING CORPORATION
                            AND SUBSIDIARIES


                   Consolidated Statement of Earnings

<CAPTION>

                                                     Year ended December 31,
                                                    ------------------------
(In millions)                                        1996     1995     1994
                                                    ------------------------
Revenues
<S>                                                 <C>      <C>      <C>
Net premiums earned (Note 8)                        $4,648   $3,886   $2,487
Net investment income (Note 4)                         837      676      528
Net realized gains on investments (Note 4)             223      191      103
Other revenues                                          43       45       30
                                                    ------   ------   ------
Total revenues                                       5,751    4,798    3,148
                                                    ------   ------   ------
Costs and Expenses
Claims, claim expenses and policy benefits           3,373    2,994    1,900
Insurance acquisition costs                          1,106      847      551
Amortization of intangibles                             82       60       36
Interest expense                                        42       16        -
Other operating costs and expenses                     284      225      155
Minority interest in net earnings of consolidated
   subsidiaries (Notes 1, 3 and 9)                      84       95       97
                                                    -------  ------   ------

Total costs and expenses                             4,971    4,237    2,739
                                                    -------  ------   ------
Earnings before income taxes                           780      561      409
                                                    -------  ------   ------
Provision for income taxes (Note 6):
   Current                                             207      150       93
   Deferred                                              6      (26)     (42)
                                                    -------  ------   ------
                                                       213      124       51
                                                    -------  ------   ------

Net earnings                                        $  567   $  437   $  358
                                                    =======  ======   ======

See Notes to Consolidated Financial Statements.
</TABLE>

<PAGE>

<TABLE>

                GE GLOBAL INSURANCE HOLDING CORPORATION
                            AND SUBSIDIARIES

              Consolidated Statement of Financial Position

<CAPTION>
                                                                  December 31,
                                                               -----------------
(In millions)                                                    1996      1995
                                                               -----------------
Assets
Investments (Note 4):
<S>                                                            <C>       <C>
  Fixed maturity securities available-for-sale, at fair value  $13,572   $12,991
  Equity securities, at fair value                               2,303     1,822
  Short-term investments, at amortized cost                        339       312
  Other invested assets                                            265       269
                                                               -------   -------
Total investments                                               16,479    15,394

Cash                                                               377       455

Securities and indebtedness of related parties                     310       275

Accrued investment income                                          391       323

Premiums receivable                                              2,645     3,298

Funds held by reinsured companies                                  519       665

Reinsurance recoverables                                         2,358     2,936

Deferred insurance acquisition costs                               495       474

Intangible assets                                                  986       967

Other assets                                                       828       826
                                                               -------   -------
Total assets                                                   $25,388   $25,613
                                                               =======   =======
</TABLE>

<PAGE>

<TABLE>

                GE GLOBAL INSURANCE HOLDING CORPORATION
                            AND SUBSIDIARIES

        Consolidated Statement of Financial Position (continued)



<CAPTION>
                                                             December 31,
                                                         -------------------
(In millions)                                              1996        1995
                                                         -------------------
<S>                                                      <C>         <C>
Liabilities and equity
Claims and claim expenses (Note 5)                       $10,869     $11,145
Accumulated contract values                                1,643       1,809
Future policy benefits for life and health contracts         831         719
Unearned premiums                                          1,170       1,328
Other reinsurance balances                                 1,836       2,598
Income taxes payable (Note 6)                                173         119
Contract deposit liabilities                               1,458       1,055
Other liabilities                                            612         584
Deferred income taxes (Note 6)                               274         254
Short-term borrowings (Note 7)                                 -         600
Long-term borrowings (Note 7)                                556           -
                                                         -------     -------
   Total liabilities                                      19,422      20,211
                                                         -------     -------
Minority interest in equity of consolidated
   subsidiaries (Notes 1, 3 and 9)                         1,206       1,211
                                                         -------     -------
Common stock, $5,000 par value; authorized,
   issued and outstanding - 1,000 shares                       5           5
Preferred stock, $100,000 par value; authorized,
   issued and outstanding - 1,500 shares                     150         150
Paid-in capital                                              845         845
Unrealized gains on investment securities                    500         436
Foreign currency translation adjustments                      15          12
Retained earnings                                          3,245       2,743
                                                         -------     -------
   Total stockholder's equity                              4,760       4,191
                                                         -------     -------
Total liabilities and equity                             $25,388     $25,613
                                                         =======     =======


See Notes to Consolidated Financial Statements.
</TABLE>

<PAGE>

<TABLE>

                                               GE GLOBAL INSURANCE HOLDING CORPORATION
                                                           AND SUBSIDIARIES

                                           Consolidated Statement of Stockholder's Equity

<CAPTION>                                                                   Unrealized
                                                                              Gains
                                                                             (Losses)      Foreign
                                                                                on         Currency
                                             Common    Preferred  Paid-In   Investment    Translation    Retained
(In millions)                                 Stock      Stock    Capital   Securities    Adjustments    Earnings      Total
                                             ---------------------------------------------------------------------------------
<S>                                            <C>     <C>          <C>         <C>          <C>          <C>          <C>
Balance, January 1, 1994                       $5       $  -        $520        $303         $(19)        $2,129       $2,938
   Contribution to capital                      -          -          25           -            -              -           25
   Change in unrealized gains (losses) on
     investment securities                      -          -           -        (469)           -              -         (469)
   Change in foreign currency translation
     adjustments                                -          -           -           -           20              -           20

   Net earnings                                 -          -           -           -            -            358          358
   Dividends paid on common stock               -          -           -           -            -           (150)        (150)
                                               --       ----        ----        ----         ----         ------       ------

Balance, December 31, 1994                      5          -         545        (166)           1          2,337        2,722
   Issuance of preferred stock (Note 9)         -        150           -           -            -              -          150
   Contribution to capital (Note 9)             -          -         300           -            -              -          300
   Change in unrealized gains (losses) on
     investment securities                      -          -           -         602            -              -          602
   Change in foreign currency translation
     adjustments                                -          -           -           -           11              -           11
   Net earnings                                 -          -           -           -            -            437          437
   Dividends paid on common stock               -          -           -           -            -            (29)         (29)
   Dividends paid on preferred stock            -          -           -           -            -             (2)          (2)
                                               --       ----        ----        ----         ----         ------       ------
Balance, December 31, 1995                      5        150         845         436           12          2,743        4,191
   Change in unrealized gains (losses) on
     investment securities                      -          -           -          64            -              -           64
   Change in foreign currency translation
   adjustments                                  -          -           -           -            3              -            3
   Net earnings                                 -          -           -           -            -            567          567
   Dividends paid on common stock               -          -           -           -            -            (58)         (58)
   Dividends paid on preferred stock            -          -           -           -            -             (7)          (7)
                                               --       ----        ----        ----         ----         ------       ------
Balance, December 31, 1996                     $5       $150        $845        $500         $ 15         $3,245       $4,760
                                               ==       ====        ====        ====         ====         ======       ======

See Notes to Consolidated Financial Statements.
</TABLE>


<PAGE>


                     GE GLOBAL INSURANCE HOLDING CORPORATION
                                AND SUBSIDIARIES

                      Consolidated Statement of Cash Flows
<TABLE>
<CAPTION>

                                                                Year ended December 31,
                                                            --------------------------------
(In millions)                                                1996          1995         1994
                                                            --------------------------------
<S>                                                        <C>           <C>          <C>
Cash Flows From Operating Activities
Net earnings                                               $  567        $  437       $  358
Adjustments to reconcile net earnings to cash
     from operating activities:
     Claims and claim expenses                                489           608          628
     Future policy benefits for life and health contracts     157           (45)         108
     Unearned premiums                                          1          (564)         103
     Funds held by reinsured companies                        104           (10)         (19)
     Reinsurance recoverables                                 210          (268)        (171)
     Deferred income taxes                                      6           (26)         (43)
     Income taxes payable                                      66            12          (26)
     Other, net                                              (460)        1,047          162
     Amortization of insurance acquisition costs            1,106           847          551
     Insurance acquisition costs deferred                  (1,157)         (833)        (586)
     Net realized gains on investments                       (223)         (191)        (103)
                                                           ------        ------       ------
     Cash from operating activities                           866         1,014          962
                                                           ------        ------       ------


Cash Flows From Investing Activities
Fixed maturity securities available-for-sale:
     Purchases                                             (6,219)       (5,936)      (3,842)
     Sales                                                  4,896         4,432        2,260
     Maturities                                               610           474          377
Equity securities:
     Purchases                                             (1,330)       (1,337)        (783)
     Sales                                                  1,178         1,178          746
Net purchases of short-term investments                       (28)          (50)          (9)
Business acquisitions, net of cash acquired (Note 3)            -          (807)         (80)
Other investing activities                                    106          (118)         (16)
                                                           ------        ------       ------
     Cash used for investing activities                      (787)       (2,164)      (1,347)
                                                           ------        ------       ------


Cash Flows From Financing Activities
Change in contract deposits                                   460           352          133
Net contract accumulation receipts (payments)                (161)         (223)         299
Proceeds from short-term borrowings (Note 7)                    -           600           -
Principal payments on short-term borrowings (Note 7)         (600)            -           -
Proceeds from long-term borrowings (Note 7)                   556             -           -
Contribution to capital (Note 9)                                -           300           -
Proceeds from issuance of preferred stock (Note 9)              -           150           -
Dividends paid                                                (65)          (31)        (150)
                                                           ------        ------       ------
     Cash from financing activities                           190         1,148          282
                                                           ------        ------       ------
Effect of exchange rate changes on cash                      (347)          116           72
                                                           ------        ------       ------
Increase (decrease) in cash                                   (78)          114          (31)
Cash at beginning of year                                     455           341          372
                                                           ------        ------       ------
Cash at end of year                                        $  377        $  455       $  341
                                                           ======        ======       ======


See Notes to Consolidated Financial Statements.
</TABLE>

<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")  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  include the
accounts  and  operations,  after  intercompany  eliminations,  of GE Global and
Employers  Reinsurance  Corporation  ("ERC"),  a  property/casualty  reinsurance
company  with  various  property/casualty   reinsurance,  life  reinsurance  and
insurance intermediary subsidiaries.  GE Global owns 100% of the common stock of
ERC,  representing  89.5% of ERC's voting rights,  and General  Electric Capital
Corporation  ("GE Capital")  owns 100% of ERC's  preferred  stock,  representing
10.5% of ERC's voting rights.  GE Global and its  consolidated  subsidiaries are
collectively referred to as "the Company."


GE Global


During 1995, an inactive,  wholly-owned  subsidiary of ERC was renamed GE Global
and dividended to GE Capital Services.  GE Capital Services then contributed its
100%  ownership  of the  common  stock  of ERC to GE  Global.  The  consolidated
financial statements of the Company reflect the combination of GE Global and ERC
at  historical  cost on a basis  similar  to pooling  of  interests  accounting;
accordingly,  the accompanying  consolidated  financial  statements  include the
accounts and operations of ERC for all periods presented.

Basis of Accounting

The  accompanying  consolidated  financial  statements have been prepared on the
basis of generally  accepted  accounting  principles  ("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.


Acquisition of Affiliated Companies


On December 28, 1994, ERC issued 11,673 newly authorized  shares of $100,000 par
value, nonredeemable,  voting preferred stock to purchase all of the outstanding
capital stock of Employers  Reassurance  Corporation ("ERAC") and Puritan Excess
and Surplus Lines Insurance  Company  ("PESLIC") from GE Capital,  an affiliate,
the common stock of which is wholly-owned by GE Capital Services.  The companies
were acquired for $1.167 billion, which represented book value, as determined in
accordance  with generally  accepted  accounting  principles.  The  consolidated
financial  statements of the Company reflect the acquisitions of ERAC and PESLIC
at  historical  cost on a basis  similar  to pooling  of  interests  accounting;
accordingly,  the accompanying  consolidated  financial  statements  include the
accounts  and  operations  of ERAC and PESLIC  for all  periods  presented.  The
preferred  stock  described  above had been  presented  previously as "Preferred
stock of subsidiary"  in the  consolidated  statement of financial  position and
excluded from equity due to its  similarities to a minority  interest.  Earnings
prior to 1995 from these  acquired  affiliates  were  presented  previously as a
charge similar to preferred stock dividends in determining net earnings.  Due to
its  characteristics,  the preferred stock described above has been reclassified
as "Minority  interest in equity of consolidated  subsidiaries" in the statement
of  financial  position.  Also,  the  related  1996  and  1995  preferred  stock
dividends,  as well as the earnings  prior to 1995 from  acquired  subsidiaries,
have been  reclassified  as "Minority  interest in net earnings of  consolidated
subsidiaries" in the statement of earnings.



<PAGE>


                     GE GLOBAL INSURANCE HOLDING CORPORATION
                                AND SUBSIDIARIES


             Notes to Consolidated Financial Statements (continued)


2.   Summary of Significant Accounting Policies


Investments

The  Company's  fixed  maturity  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. 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.

Property and Casualty Insurance/Reinsurance Segment

Premiums  are  reported  as  earned  over the terms of the  related  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. Assumed foreign reinsurance is accounted for using the
periodic method.

Certain  insurance  acquisition  costs,  principally  commissions  and brokerage
expenses,  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 value of property and casualty business recorded in connection with the 1984
acquisition of ERC by GE Capital Services is being amortized over 16 years using
the  straight-line  method.  Included in the  statement  of  financial  position
caption  "Intangible  assets" was the value of property and casualty business of
$262 million before accumulated amortization of $202 million and $186 million at
December 31, 1996 and 1995, respectively.

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 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 $1.015  billion and $748  million at  December  31, 1996 and 1995,
respectively, of long-term disability claims that are discounted at a 6% rate.

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 two groups,  insurance  contracts  and
investment  contracts.  Insurance  contracts  are  broadly  defined  to  include
contracts with significant mortality and/or morbidity risk. Investment contracts
are  broadly  defined to include  contracts  without  significant  mortality  or
morbidity risk. In addition,  the Company  participates in financially  oriented
reinsurance treaties.  Deposits, if any, are carried as assets or liabilities in
the statement of financial position.


<PAGE>


                     GE GLOBAL INSURANCE HOLDING CORPORATION
                                AND SUBSIDIARIES


             Notes to Consolidated Financial Statements (continued)


2.   Summary of Significant Accounting Policies (continued)

Revenues for insurance contracts are recognized as revenues when due or over the
terms of the  policies.  Revenues  for  investment  contracts  are fees  charged
against contract values during the period for insurance,  policy administration,
surrenders and other risks.

Future  policy  benefits for life and health  contracts are 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 range from 3.0% to 8.5% at
December 31, 1996, and 2.0% to 8.0% at December 31, 1995. Payments received from
sales of investment  contracts are not recognized as revenues,  but are recorded
as accumulated contract values of the policyholders'  contracts.  Interest rates
credited  to  investment  contracts  are  guaranteed  for the policy  terms with
renewal rates  determined by management.  Such  crediting  interest rates ranged
from  3.25% to 9.00% in 1996,  4.25% to 12.30%  in 1995,  and 4.25% to 12.80% in
1994.

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 issue
expenses.  For investment  contracts,  the  amortization is based on the present
value of 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.  For  insurance  contracts,  the  acquisition  costs are
amortized  over the premium  paying periods using  assumptions  consistent  with
those used in computing future policy benefit reserves.

As a result of  acquisitions,  the  Company  has  obtained  the right to receive
future  profits  from life  reinsurance  contracts  existing  at the date of the
acquisitions.  The  present  value  of  these  future  profits  (PVFP)  has been
actuarially  determined  based  on the  projected  profits  from  the  contracts
acquired.  The calculation of the projected profits includes  anticipated future
premiums, benefit payments, lapse rates, expenses and related investment income.
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.  The PVFP of $164 million and $171
million at December 31, 1996 and 1995, respectively,  is included in "Intangible
assets" and is being  amortized  using the interest  method over the duration of
the related life business,  approximately 20 years, as the premiums on the books
of business are recognized.

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 reinsurance recoverables,
premiums receivable and other doubtful receivables. The allowance is recorded as
a valuation account that reduces the corresponding  asset. The allowance was $47
million and $27 million at December 31, 1996 and 1995, respectively.


<PAGE>


                     GE GLOBAL INSURANCE HOLDING CORPORATION
                                AND SUBSIDIARIES


             Notes to Consolidated Financial Statements (continued)


2.   Summary of Significant Accounting Policies (continued)

Goodwill

The  Company  amortizes  goodwill  recorded  in  connection  with  its  business
combinations  over periods  ranging from 20 to 30 years using the  straight-line
method.  Included in the  statement of financial  position  caption  "Intangible
assets" was  goodwill of $983  million and $897 million at December 31, 1996 and
1995,  respectively.  Accumulated amortization was $221 million and $177 million
at December  31, 1996 and 1995,  respectively.  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  shall be 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 statement of financial position, and
transactions  as such are considered  investing  activities in the  consolidated
statement of cash flows.
    

The Company's noncash investing and financing  activity in 1994 relates to ERC's
acquisition of all of the  outstanding  stock of ERAC and PESLIC through issuing
$1.167 billion of preferred stock on December 28, 1994.

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 insurance  risk assumed are required to
be accounted for as deposits.  These contract deposits are included in "Contract
deposit  liabilities"  and are  accounted  for as  financing  transactions  with
interest income or expense credited or charged to the contract deposits.

Income Taxes

GE Global, together with its domestic  property/casualty  insurance subsidiaries
and its parent,  GE Capital  Services,  is included in the consolidated  federal
income  tax  return  of  GE  Company.   GE  Global's   domestic  life  insurance
subsidiaries are taxed as life insurance companies,  and those subsidiaries file
separate  federal  income  tax  returns.  GE  Global's  international  insurance
subsidiaries  file  separate  income  tax  returns  in the  countries  that  the
subsidiaries are domiciled.

The Company  utilizes  the  liability  method,  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 is required to establish a "valuation allowance" for
any  portion of the  deferred  tax asset that  management  believes  will not be
realized.



<PAGE>


                     GE GLOBAL INSURANCE HOLDING CORPORATION
                                AND SUBSIDIARIES


             Notes to Consolidated Financial Statements (continued)



2.   Summary of Significant Accounting Policies (continued)

Foreign Currency Translation

The  Company  operates in a multiple  functional  currency  environment  whereby
revenues and expenses in functional currencies are translated using the weighted
average  exchange  rate  during  the year and  functional  currency  assets  and
liabilities are translated at the rate 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  "Foreign  currency  translation  adjustments."  The Company hedges its
foreign currency risk on its foreign subsidiary investments by utilizing a cross
currency  swap  (See Note 12).  The gain or loss on the cross  currency  swap is
included in "Foreign  currency  translation  adjustments"  and was a $71 million
gain at December 31, 1996. The net effect of foreign  currency  transactions  on
operating results during 1996, 1995 and 1994 was immaterial.

Benefit Plans

Employees  of  the  Company  and  its  subsidiaries,   excluding   international
subsidiaries,  are covered by a trusteed,  noncontributory  defined benefit plan
and  unfunded  postretirement  plans  that  provide  medical  benefits  and life
insurance benefits to substantially all employees and their dependents.  Certain
of the Company's international subsidiaries also sponsor noncontributory defined
benefit  plans for their  employees.  The net effect of all benefit plans on the
consolidated statement of financial position and statement of earnings for 1996,
1995 and 1994 was immaterial.

Accounting Change

Statement  of  Financial  Accounting  Standards  No.  121,  Accounting  for  the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of, was
adopted in the first  quarter of 1996 and did not have a material  effect on the
financial  position or results of  operations  of the  Company.  This  statement
requires that certain  long-lived  assets be reviewed for impairment when events
or  circumstances  indicate  that the carrying  amounts of the assets may not be
recoverable.  If such  review  indicates  that the  carrying  amount of an asset
exceeds the sum of its expected future cash flows, the asset's carrying value is
written down to fair value.  Long-lived assets to be disposed of are reported at
the lower of carrying amount or fair value less cost to sell.

Reclassifications

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

<PAGE>



                     GE GLOBAL INSURANCE HOLDING CORPORATION
                                AND SUBSIDIARIES

             Notes to Consolidated Financial Statements (continued)


3.   Acquisitions

3.   Acquisitions

   
In July 1995, the Company  consummated its purchase of certain assets comprising
a     majority     of     the      reinsurance      business     of     Aachener
Ruckversicherungs-Gesellschaft Aktiengesellschaft (the "Aachen Re Business") and
its   purchase   of   over   93%  of  the   outstanding   shares   of   Frankona
Ruckversicherungs-Aktien-Gesellschaft ("Frankona Re"). The Aachen Re Business is
written primarily on a direct basis and principally consists of auto/motor, fire
and life  reinsurance of both German and non-German  business.  Frankona Re also
operates  primarily  on a direct  basis,  and its  written  premium  principally
consists of aviation,  auto/motor,  fire and life reinsurance of both German and
non-German business.

The  Aachen  Re  Business  and  the  Frankona  Re  shares  were   purchased  for
approximately $143 million and $879 million, respectively, and both transactions
were  accounted for as  purchases.  Accordingly,  the purchase  prices have been
allocated to assets acquired and liabilities assumed based on estimates of their
fair values as of the dates of the  acquisitions  and the results of  operations
have been included in the statement of earnings since the acquisition dates. The
allocation of the combined  purchase  price, as finalized in 1996, is summarized
as follows:

       (In millions)

       Assets acquired, excluding goodwill
         and present value of future profits       $7,729
       Goodwill                                       583
       Present value of future profits                146
       Liabilities assumed                         (7,436)
                                                   ------
       Total purchase price                        $1,022
                                                   ======

Goodwill is being amortized using the straight-line method over a 20 year period
and the  present  value of future  profits on the life  reinsurance  business is
being  amortized using the interest method over the duration of the related life
business,  approximately  20  years,  as the  premiums  on the life  reinsurance
business are recognized. Funding for these acquisitions is described in Note 7.

During 1996, the Company continued to purchase the remaining  outstanding shares
of Frankona Re held by minority  shareholders.  Effective  December 7, 1996,  an
agreement was entered into with the remaining minority  shareholders whereby the
Company  offered to purchase the  remaining  outstanding  shares at a stipulated
price  and  would   guarantee  a  specified   compensation   payment.   Minority
shareholders  who do not redeem their  outstanding  shares under this  agreement
will receive a stated  future  annual  dividend and will forfeit  their right to
participate in the future net earnings of Frankona Re.


<PAGE>

                     GE GLOBAL INSURANCE HOLDING CORPORATION
                                AND SUBSIDIARIES

             Notes to Consolidated Financial Statements (continued)


4.   Investments

The cost,  fair value and gross  unrealized  gains and losses of fixed  maturity
securities, equity securities,  short-term investments and other invested assets
were as follows:
<TABLE>
<CAPTION>
                                                                December 31, 1996
                                                    -----------------------------------------
                                                               Gross        Gross
                                                             Unrealized   Unrealized     Fair
             (In millions)                             Cost    Gains        Losses      Value
                                                    -----------------------------------------
             Fixed maturity securities:
             <S>                                  <C>          <C>          <C>     <C>
                U.S. government                     $   514      $  3        $ 2      $   515
                International government              2,281        91          1        2,371
                Tax-exempt                            5,830       279          8        6,101
                Corporate                             2,541        69          7        2,603
                U.S. mortgage-backed                    912        18          7          923
                International mortgage-backed         1,010        49          -        1,059
                                                    -------      ----        ---      -------
             Total fixed maturity securities         13,088       509         25       13,572

             Equity securities                        1,988       352         37        2,303

             Short-term investments                     339         -          -          339
             Other invested assets                      265         -          -          265
                                                    -------      ----        ---      -------
             Total                                  $15,680      $861        $62      $16,479
                                                    =======      ====        ===      =======




                                                                December 31, 1995
                                                    -----------------------------------------
                                                               Gross        Gross
                                                             Unrealized   Unrealized     Fair
             (In millions)                          Cost       Gains        Losses      Value
                                                    -----------------------------------------
             Fixed maturity securities:
                U.S. government                     $   507      $ 15        $ -      $   522
                International government              2,570        97          3        2,664
                Tax-exempt                            5,654       375          5        6,024
                Corporate                             2,216        69         13        2,272
                U.S. mortgage-backed                    717        20          2          735
                International mortgage-backed           752        22          -          774
                                                    -------      ----        ---      -------
             Total fixed maturity securities         12,416       598         23       12,991

             Equity securities                        1,713       155         46        1,822

             Short-term investments                     312         -          -          312
             Other invested assets                      269         -          -          269
                                                    -------      ----        ---      -------
             Total                                  $14,710      $753        $69      $15,394
                                                    =======      ====        ===      =======
</TABLE>
<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 the  Company's  investments  in
available-for-sale,   fixed  maturity   securities  at  December  31,  1996  are
summarized, by stated maturity, as follows:

<TABLE>
<CAPTION>
                                                           Fair
             (In millions)                       Cost      Value
                                               ------------------
             Maturity:
             <S>                               <C>        <C>
               Due in 1997                     $   714    $   719
               Due in 1998-2001                  3,209      3,291
               Due in 2002-2006                  2,912      3,044
               Due after 2006                    4,331      4,536
                                               -------    -------
             Subtotal                           11,166     11,590
             Mortgage-backed securities          1,922      1,982
                                               -------    -------
             Total                             $13,088    $13,572
                                               =======    =======
</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 the Company's investment income are summarized as follows:
<TABLE>
<CAPTION>
                                                         Year ended December 31,
                                                        ------------------------
        (In millions)                                      1996    1995    1994
                                                        ------------------------
        <S>                                                <C>     <C>     <C>
        Fixed maturity securities                          $737    $581    $433
        Equity securities                                    45      32      26
        Short-term investments                               19      28      19
        Securities and indebtedness of related parties       21      20      19
        Other                                                35      30      42
                                                           ----    ----    ----
        Gross investment income                             857     691     539
        Investment expenses                                  20      15      11
                                                           ----    ----    ----
        Net investment income                              $837    $676    $528
                                                           ====    ====    ====
</TABLE>
<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 securities  are
summarized as follows:
<TABLE>
<CAPTION>
                                                                          Year ended December 31,
                                                                     --------------------------------
              (In millions)                                           1996         1995         1994
                                                                     --------------------------------
             <S>                                                     <C>          <C>          <C>
             Sales proceeds from fixed maturity securities           $4,896       $4,432       $2,260
                                                                     ======       ======       ======
             Fixed maturity securities:
               Gross realized gains                                  $  108       $  114       $   55
               Gross realized losses                                    (36)         (29)         (18)
             Equity securities:
               Gross realized gains                                     201          154           96
               Gross realized losses                                    (50)         (48)         (30)
                                                                     ------       ------       ------
             Total net realized gains                                   223          191          103
             Income taxes                                                79           67           36
                                                                     ------       -------      ------
             Realized gains on investments, after income taxes       $  144       $  124       $   67
                                                                     ======       ======       ======
</TABLE>

The change in the Company's net unrealized gains (losses), before income
tax, on fixed maturity securities was $(91) million, $782 million and
$(770) million in 1996, 1995 and 1994, respectively; the corresponding
amounts for equity securities were $206 million, $153 million and $(103)
million in 1996, 1995 and 1994, respectively.

At December 31, 1996 and 1995,  the Company had  investments  in fixed  maturity
securities   with  a  carrying   amount  of  $.56  billion  and  $2.06  billion,
respectively,  on deposit with state insurance departments to satisfy regulatory
requirements.

<PAGE>

                     GE GLOBAL INSURANCE HOLDING CORPORATION
                                AND SUBSIDIARIES


             Notes to Consolidated Financial Statements (continued)


5.   Claims and Claim Expenses


The table below provides a reconciliation of the beginning and ending claims and
claim expense liabilities, net of reinsurance.

<TABLE>
<CAPTION>
                                                                        Year ended December 31,
                                                                 -----------------------------------
             (In millions)                                         1996           1995         1994
                                                                 -----------------------------------
            <S>                                                  <C>           <C>            <C>
             Balance at January 1                                $11,145        $ 6,020       $5,312
             Reinsurance recoverables on unpaid claims and
               claim expenses                                      1,794            949          787
                                                                 -------        -------       ------
             Net balance at January 1                              9,351          5,071        4,525
                                                                 -------        -------       ------
             Incurred claims and claim expenses related to:
               Current year                                        2,763          2,638        1,657
               Prior years                                           106            104           87
                                                                 -------        -------       ------
             Total incurred                                        2,869          2,742        1,744
                                                                 -------        -------       ------
             Claims and claim expense payments related to:
               Current year                                          485            295          374
               Prior years                                         1,990          1,426          949
                                                                 -------        -------       ------
             Total payments                                        2,475          1,721        1,323
                                                                 -------        -------       ------

             Foreign exchange and other                             (287)           (54)         125
                                                                 -------        -------       ------
             Net balance at December 31                            9,458          6,038        5,071
             Reinsurance recoverables on unpaid claims
               and claim expenses                                  1,411          1,794          949
             Acquired businesses unpaid claims
               and claim expenses (See Note 3)                         -          3,313            -
                                                                 -------        -------       ------
             Balance at December 31                              $10,869        $11,145       $6,020
                                                                 =======        =======       ======
</TABLE>

The Company's  liabilities for unpaid claims and claim expenses,  net of related
reinsurance recoverables, at December 31, 1995, 1994 and 1993, were increased in
the following year by $106 million, $104 million and $87 million,  respectively,
for claims that had occurred on or prior to those  balance  sheet  dates.  Those
deficiencies  resulted  principally from settling claims  established in earlier
accident  years for amounts that were more than  estimated and due to changes in
estimates associated with the lag in receiving underwriting  reports from ceding
companies that causes development of both premiums and claims,  especially as it
relates to the international operations.



<PAGE>


                     GE GLOBAL INSURANCE HOLDING CORPORATION
                                AND SUBSIDIARIES


             Notes to Consolidated Financial Statements (continued)


5.   Claims and Claim Expenses (continued)

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 $368
million and $174 million,  respectively, at December 31, 1996. 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, cash flows and financial position.

6.   Income Taxes

The Company's provision for income taxes is summarized as follows:
<TABLE>
<CAPTION>
                                                Year ended December 31,
                    -------------------------------------------------------------------------
                             1996                     1995                      1994
                    ---------------------    ---------------------     ----------------------
                    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          $79     $128    $207     $82     $68     $150      $74     $19     $93
    Deferred           7       (1)      6     (22)     (4)     (26)     (39)     (3)    (42)
                     ---     ----    ----     ---     ---     ----      ---     ---     ---
    Total            $86     $127    $213     $60     $64     $124      $35     $16     $51
                     ===     ====    ====     ===     ===     ====      ===     ===     ===

</TABLE>

Income  taxes paid by the Company  totaled $158  million,  $114 million and $118
million in 1996, 1995 and 1994, respectively.




<PAGE>


                     GE GLOBAL INSURANCE HOLDING CORPORATION
                                AND SUBSIDIARIES


             Notes to Consolidated Financial Statements (continued)


6.   Income Taxes (continued)


The  Company's  effective  income tax rate on  pre-tax  income is lower than the
prevailing U.S. corporate federal income tax rate and is summarized as follows:
<TABLE>
<CAPTION>
                                                     Year ended December 31,
                                                  -----------------------------
                                                    1996      1995       1994
                                                  -----------------------------
             <S>                                   <C>        <C>        <C>
             Corporate federal income tax rate      35%        35%        35%
             Tax-exempt investment income          (14)       (19)       (27)
             Intercompany dividend payment           4          6          8
             Decrease in tax reserves                -          -         (3)
             Other items, net                        2          -         (1)
                                                   ---        ---        ---
             Effective tax rate                     27%        22%        12%
                                                   ===        ===        ===
</TABLE>

The  significant  components  of the  Company's  net  deferred  tax  assets  and
liabilities are summarized as follows:
<TABLE>
<CAPTION>
                                                                  December 31,
                                                                ----------------
             (In millions)                                       1996      1995
                                                                ----------------
             <S>                                                <C>       <C>
             Deferred tax assets:
                Claim and claim expenses                        $ 367     $ 371
                Unearned premiums                                  41       121
                Foreign tax credit carryforwards                   66        63
                Other                                             222       168
                                                                -----     -----
             Total gross deferred tax assets                      696       723
                Valuation allowance                                66        63
                                                                -----     -----
             Total deferred tax assets                            630       660
                                                                -----     -----
             Deferred tax liabilities:
                Deferred insurance acquisition costs              153       168
                Tax reserves in excess of book reserves           198       189
                Net unrealized gains on investment securities     311       244
                Contract deposit liabilities                       85       123
                Present value of future profits                    49        65
                Other                                             108       125
                                                                -----     -----
             Total deferred tax liabilities                       904       914
                                                                -----     -----
             Net deferred tax liability                         $(274)    $(254)
                                                                =====     =====
</TABLE>

A valuation  allowance is provided when it is more likely than not that deferred
tax assets  will not be  realized.  The  Company  has  established  a  valuation
allowance for foreign tax credit  carryforwards that exceed the projected future
benefit of such foreign tax credits.  The  valuation  allowance for the deferred
tax assets  associated  with the  foreign tax  credits  increased  by $3 million
during 1996.

The Company did not have a payable to (recoverable from) GE Capital
Services for income taxes due at December 31, 1996 and had a payable of
$3 million at December 31, 1995.

<PAGE>

                     GE GLOBAL INSURANCE HOLDING CORPORATION
                                AND SUBSIDIARIES

             Notes to Consolidated Financial Statements (continued)

7.   Long-Term and Short-Term Borrowings

On July 27, 1995, the Company  entered into  short-term  borrowing  arrangements
totaling $600 million to provide  additional funding for the acquisitions of the
Aachen Re Business and Frankona Re. These  acquisitions are described in Note 3.
The debt carried a term of one year with interest payments made monthly based on
rates  ranging from 6.0% to 6.1%. In addition to these  borrowings,  the Company
obtained  an  unsecured  line of  credit  up to  $600  million  from GE  Capital
Services. This line of credit had an interest rate per annum equal to GE Capital
Services'  cost of funds and expired on July 24, 1996.  No amounts were drawn on
this credit facility.

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 proceeds  from these
notes (net of  original  issue  discount  and costs of an  interest  rate "lock"
contract)  and were  used to repay the $600  million  of  short-term  borrowings
described  above.  Total  interest paid in 1996 and 1995 was $29 million and $13
million, respectively.

The Company entered into a revolving  credit  agreement with GE Capital Services
on  January 1, 1997 for an amount up to $600  million.  This  unsecured  line of
credit has an  interest  rate per annum  equal to GE Capital  Services'  cost of
funds for a one-year  period.  This  agreement  is  automatically  extended  for
successive terms of one year each unless terminated in accordance with the terms
of the agreement.

8.   Supplemental Financial Statement and Reinsurance Data

Insurance premiums earned in 1996, 1995 and 1994 and life insurance in force as
of December 31, 1996, 1995 and 1994 are summarized as follows:
<TABLE>
<CAPTION>
                               Insurance Premiums Earned
                           ----------------------------------    Life
                             Property/                         Insurance
            (In millions)    Casualty      Life       Total     In Force
                           ----------------------------------------------
            1996:
            <S>                <C>         <C>       <C>       <C>
              Direct           $  339      $  3      $  342     $  1,478
              Assumed           4,183       787       4,970      196,250
              Ceded              (507)     (157)       (664)     (32,445)
                               ------      ----      ------     --------
            Net                $4,015      $633      $4,648     $165,283
                               ======      ====      ======     ========

            1995:
              Direct           $  374      $  3      $  377     $  1,076
              Assumed           3,586       520       4,106      208,356
              Ceded              (514)      (83)       (597)     (34,828)
                               ------      ----      ------     --------
            Net                $3,446      $440      $3,886     $174,604
                               ======      ====      ======     ========

            1994:
              Direct           $  352      $  3      $  355     $    767
              Assumed           2,304       237       2,541      117,695
              Ceded              (362)      (47)       (409)     (28,885)
                               ------      ----      ------     --------
            Net                $2,294      $193      $2,487     $ 89,577
                               ======      ====      ======     ========
</TABLE>

<PAGE>

                     GE GLOBAL INSURANCE HOLDING CORPORATION
                                AND SUBSIDIARIES


             Notes to Consolidated Financial Statements (continued)


8.   Supplemental Financial Statement and Reinsurance Data (continued)


Claims, claim expenses and policy benefits in 1996, 1995 and 1994 are summarized
as follows:
<TABLE>
<CAPTION>
                               Property/
         (In millions)         Casualty        Life          Total
                           -----------------------------------------
         1996:
<S>                             <C>            <C>          <C>
            Direct              $  346         $  3         $  349
            Assumed              3,058          593          3,651
            Ceded                 (535)         (92)          (627)
                                ------         ----         ------
         Net                    $2,869         $504         $3,373
                                ======         ====         ======

         1995:
            Direct              $  312         $  3         $  315
            Assumed              2,673          357          3,030
            Ceded                 (336)         (15)          (351)
                                ------         ----         ------
         Net                    $2,649         $345         $2,994
                                ======         ====         ======

         1994:
            Direct              $  328         $  2         $  330
            Assumed              1,754          109          1,863
            Ceded                 (338)          45           (293)
                                ------         ----         ------
         Net                    $1,744         $156         $1,900
                                ======         ====         ======
</TABLE>

The Company's insurance company subsidiaries both cede reinsurance to and assume
reinsurance from 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;  reinsurance  liabilities and accruals are reported gross of
reinsurance ceded.

The   Company's   insurance   company   subsidiaries   remain  liable  to  their
policyholders  if  their  reinsurers  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.   At  December  31,  1996,  there  was  no
significant  concentration of reinsurance  recoverables and prepaid  reinsurance
premiums due from any one reinsurer.

For financial reinsurance assumed, the Company reports revenue for the risk fees
charged for those services. At December 31, 1996, statutory policyholder surplus
of the Company's life insurance subsidiaries has been reduced approximately $336
million in  connection  with  financial  reinsurance  assumed.  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.

<PAGE>

                     GE GLOBAL INSURANCE HOLDING CORPORATION
                                AND SUBSIDIARIES


             Notes to Consolidated Financial Statements (continued)


9.   Stockholder's Equity

As  described  in Note 1, ERC  issued  11,673  shares  of  $100,000  par  value,
nonredeemable,  voting  preferred  stock to  purchase  ERAC and  PESLIC  from GE
Capital on December 28, 1994.  This  preferred  stock accrues  preferential  and
cumulative  dividends at an annual rate that is the average of the yield on high
grade  industrial  preferred  stock  and the yield on  medium  grade  industrial
preferred stock as of the close of the week preceding  December 31, as published
by Moody's  Investors  Service,  Inc.  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 $80 million and $93
million in 1996 and 1995, respectively.

On  September  28, 1995,  GE Capital  Services  contributed  $300 million to the
equity of the Company, and GE Capital purchased 1,500 newly authorized shares of
$100,000 par value, nonvoting,  cumulative preferred stock of the Company for an
aggregate  purchase price of $150 million.  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 million and $2 million in 1996 and 1995,
respectively.

10.   Statutory Accounting Practices


ERC and its domestic insurance  subsidiaries are domiciled in Missouri or Kansas
and prepare  their  statutory-basis  financial  statements  in  accordance  with
accounting practices prescribed or permitted by the Missouri or Kansas Insurance
Department.  "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. ERC
and  its  insurance   subsidiaries  have  no  significant  permitted  accounting
practices that vary from prescribed accounting practices, except as noted below.

Stockholder's  equity and net  income,  as  reported  to the  domiciliary  state
insurance  departments in accordance with its prescribed or permitted  statutory
accounting  practices,  for the Company's  domestic  insurance  subsidiaries are
summarized as follows:
<TABLE>
<CAPTION>
                                                       December 31,
                                                      ----------------
       (In millions)                                    1996    1995
                                                      ----------------
       <S>                                             <C>     <C>
       Stockholder's equity:
          ERC                                         $4,309  $3,718
          Property and casualty subsidiaries of ERC      657     557
          Life and annuity subsidiaries of ERC         2,371   1,913
</TABLE>
<TABLE>
<CAPTION>
                                                       Year ended December 31,
                                                      ------------------------
       (In millions)                                    1996    1995    1994
                                                      ------------------------
       Net income:
          <S>                                           <C>     <C>     <C>
          ERC                                           $434    $416    $389
          Property and casualty subsidiaries of ERC       54      53      26
          Life and annuity subsidiaries of ERC           278     108      82
</TABLE>

<PAGE>



                     GE GLOBAL INSURANCE HOLDING CORPORATION
                                AND SUBSIDIARIES

             Notes to Consolidated Financial Statements (continued)


10.   Statutory Accounting Practices (continued)

The payment of stockholder  dividends by 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 during 1997 by ERC to the Company without prior regulatory approval is
$297 million through  December 20, 1997, and $420 million  thereafter.  Of these
amounts, $82 million is committed to pay dividends on the preferred stock issued
by ERC to GE Capital.

In 1995, ERC received written approval from the Missouri Department of Insurance
to  discount  its claim and  claim  expense  liabilities  related  to  long-term
disability business.  Prescribed statutory accounting practice does permit claim
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 claim and claim expense  liabilities.  Included in the discount
recognized for statutory  purposes at December 31, 1996 and 1995 is a benefit of
$348 million and $356 million,  respectively, for long-term disability claim and
claim expense liabilities.

The National Association of Insurance Commissioners ("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,  1996,  each of GE Global's
domestic   insurance   subsidiaries   exceeds  the  minimum  risk-based  capital
requirements.

The Company's  international  insurance 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  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
impose  fines,  censure  and/or  criminal  sanctions for violation of regulatory
requirements.

11.   Contingencies

There are no pending legal  proceedings  beyond the ordinary  course of business
that could have a  material  financial  effect on the  Company,  except  that in
connection  with a dispute under specific  retrocession  agreements  relating to
disability  insurance  assumed  by  the  Company  from  various  insurers.   The
retrocessionaire  has initiated legal  proceedings  against the Company seeking,
alternatively,  rescission  of the  retrocession  contract or indemnity  against
losses payable by the retrocessionaire under retrocession  contracts.  The total
amount in dispute  is  approximately  $50  million.  The  Company  believes  the
retrocession contracts are valid and the amounts are recoverable. Accordingly,
the Company has committed no reserves to cover any such contingent liabilities.


<PAGE>


                     GE GLOBAL INSURANCE HOLDING CORPORATION
                                AND SUBSIDIARIES


             Notes to Consolidated Financial Statements (continued)


12.   Fair Value of Financial Instruments

This  note  discloses  fair  value  information  about the  Company's  financial
instruments,  whether or not  recognized in the balance  sheet,  for which it is
practical to estimate the value.  No attempt has been made to estimate the value
of anticipated  future  business or the value of assets or liabilities  that are
not  considered  financial  instruments.  Fair  value  estimates  are  made at a
specific point in time based on relevant market  information about the financial
instrument.  In cases where quoted market prices are not available,  fair values
are estimated using  discounted cash flow or other valuation  techniques.  These
estimates may be subjective in nature and involve  uncertainties and, therefore,
cannot  be  determined  with  precision.   Changes  in  the  assumptions   could
significantly  affect the  estimates.  As such the derived fair value  estimates
cannot necessarily be substantiated by comparison to independent markets and may
differ from the amounts that might be involved in an immediate settlement of the
instrument.  Fair value  disclosures  are not  required  for  certain  financial
instruments,  the most  significant  of these for the Company are the  insurance
liabilities and related assets,  other than financial  guarantees and investment
contracts.

Certain financial  instruments that are reflected in the accompanying  financial
statement at fair value or for which fair values are disclosed  elsewhere in the
notes to the financial statements are not included in the following  disclosure.
The most  significant of which are investments,  cash,  amounts due from related
parties,  accrued  investment  income and other  receivables and payables.  Fair
values of other financial instruments have been determined as 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  and includes
the effects of counterparty creditworthiness.

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.



<PAGE>


                     GE GLOBAL INSURANCE HOLDING CORPORATION
                                AND SUBSIDIARIES


             Notes to Consolidated Financial Statements (continued)


12.   Fair Value of Financial Instruments (continued)

The  following  are  the  estimated  fair  values  of  the  Company's  financial
instruments:
<TABLE>
<CAPTION>
                                               December 31, 1996                           December 31, 1995
                                  -----------------------------------------------------------------------------------------
                                                     Assets(liabilities)                         Assets(liabilities)
                                                -----------------------------               -------------------------------
                                    Notional    Carrying  Estimated Fair Value  Notional    Carrying  Estimated Fair Value
(In millions)                        Amount      Amount        High    Low       Amount      Amount        High    Low
                                  -----------------------------------------------------------------------------------------
Assets:
   Foreign currency forward
<S>                                   <C>       <C>        <C>      <C>           <C>       <C>        <C>      <C>
     purchase contracts                 384          7          7        7          174          1          1        1
   Separate account assets              (a)         72         72       72            -          -          -        -

Liabilities:

   Borrowings (b)                       (a)       (556)      (556)    (556)         (a)       (600)      (600)    (600)
   Foreign currency forward sales
     contracts                          215         (1)        (1)      (1)       1,294        (13)       (13)     (13)
   Accumulated contract values          (a)     (1,643)    (1,664)  (1,664)         (a)     (1,809)    (1,797)  (1,797)
   Separate account liabilities         (a)        (69)       (69)     (69)           -          -          -        -
   Financial guaranty reinsurance     5,383        (65)       (60)     (81)       3,741        (48)       (59)     (44)
   Performance guarantees
   principally                          328        (a)         (2)      (1)         298        (a)          1        1
     letters of credit

Other Firm Commitments:
   Cross currency swaps               1,107        (71)       (71)     (71)           -          -          -        -
   Letters of credit received           159        (a)         (1)       -          182        (a)         (1)       -

(a)  Not applicable.
(b)  See Note 7.

</TABLE>
Foreign  currency  forward  purchase  and sales  contracts  are  employed by the
Company to manage  exposures to changes in functional  currency  exchange rates.
These financial  instruments  generally are used as hedges of identified assets,
liabilities or net functional currency positions.


A cross  currency  swap is used by the Company to hedge its  exposure to foreign
currency risk on the net  investments  in foreign  subsidiaries  resulting  from
exchange  rate   fluctuations  in  foreign  currency   denominated   assets  and
liabilities.  The  Company is exposed to  credit-related  losses in the event of
non-performance by the counterparty to the cross currency swap contract,  but it
does not expect the  counterparty  to fail to meet its  obligations  given their
high credit ratings.



<PAGE>



                     GE GLOBAL INSURANCE HOLDING CORPORATION
                                AND SUBSIDIARIES

             Notes to Consolidated Financial Statements (continued)


13.   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,
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 and conducts excess and surplus lines and direct  specialty
insurance business.

International  property/casualty  operations are conducted through  subsidiaries
and local offices located in Australia,  Denmark, England, France, Germany, Hong
Kong,  Italy,  Japan,  Lebanon,  Mexico,  New Zealand,  Singapore and Spain, and
include  reinsurance  of  property/casualty  business  in  those  countries  and
elsewhere outside the United States and Canada.

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 local  offices as detailed  above and
include  reinsurance of life business in those  countries and elsewhere  outside
the United States and Canada.

The following is a summary of industry segment activity:
<TABLE>
<CAPTION>
                                                   1996 - Industry Segments
                                             -----------------------------------
                                              Property/
(In millions)                                 Casualty       Life   Consolidated
                                             -----------------------------------
<S>                                            <C>          <C>        <C>
Net premiums earned                            $ 4,015      $  633     $ 4,648
Net investment income                              656         181         837
Net realized gains on investments                  200          23         223
Other revenues                                      (1)         44          43
                                               -------      ------     -------
Total revenues                                   4,870         881       5,751
                                               -------      ------     -------
Claims, claim expenses and policy benefits       2,869         504       3,373
Insurance acquisition costs                        989         117       1,106
Other operating costs and expenses                 350         142         492
                                               --------     ------     -------
Total costs and expenses                         4,208         763       4,971
                                               -------      ------     -------

Earnings before income taxes                   $   662      $  118     $   780
                                               =======      ======     =======

Total assets - December 31                     $18,880      $6,508     $25,388
                                               =======      ======     =======
</TABLE>

<PAGE>



                     GE GLOBAL INSURANCE HOLDING CORPORATION
                                AND SUBSIDIARIES

             Notes to Consolidated Financial Statements (continued)


13.   Segment Information (continued)
<TABLE>
<CAPTION>
                                                    1995 - Industry Segments
                                            ------------------------------------
                                              Property/
(In millions)                                 Casualty       Life   Consolidated
                                            ------------ --------- -------------
<S>                                           <C>           <C>         <C>
Net premiums earned                           $ 3,446       $  440      $ 3,886
Net investment income                             519          157          676
Net realized gains on investments                 162           29          191
Other revenues                                     15           30           45
                                              -------       ------      -------
Total revenues                                  4,142          656        4,798
                                              -------       ------      -------

Claims, claim expenses and policy benefits      2,649          345        2,994
Insurance acquisition costs                       761           86          847
Other operating costs and expenses                261          135          396
                                              -------       ------      -------
Total costs and expenses                        3,671          566        4,237
                                              -------       ------      -------

Earnings before income taxes                  $   471       $   90      $   561
                                              =======       ======      =======

Total assets - December 31                    $19,991       $5,622      $25,613
                                              =======       ======      =======
</TABLE>

<TABLE>
<CAPTION>
                                                    1994 - Industry Segments
                                            ------------------------------------
                                              Property/
(In millions)                                 Casualty       Life  Consolidated
                                            ------------------------------------
<S>                                           <C>           <C>         <C>
Net premiums earned                           $ 2,294       $  193      $ 2,487
Net investment income                             410          118          528
Net realized gains on investments                  93           10          103
Other revenues                                      -           30           30
                                              -------       ------      -------
Total revenues                                  2,797          351        3,148
                                              -------       ------      -------

Claims, claim expenses and policy benefits      1,744          156        1,900
Insurance acquisition costs                       501           50          551
Other operating costs and expenses                183          105          288
                                              -------       ------      -------
Total costs and expenses                        2,428          311        2,739
                                              -------       ------      -------

Earnings before income taxes                  $   369       $   40      $   409
                                              =======       ======      =======

Total assets - December 31                    $10,102       $4,394      $14,496
                                              =======       ======      =======
</TABLE>

<PAGE>


                     GE GLOBAL INSURANCE HOLDING CORPORATION
                                AND SUBSIDIARIES


             Notes to Consolidated Financial Statements (continued)


13.   Segment Information (continued)

The following table is a summary of the Company's  business by geographic  area.
Allocations  to the domestic  geographic  area include  business  related to the
United  States,  Canada and  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)                         United States    Europe      Consolidated
                                      ------------------------------------------
1996:
<S>                                      <C>           <C>          <C>
   Revenues                              $  2,692      $  3,059     $  5,751
   Earnings before income taxes               442           338          780
   Identifiable assets at December 31      13,659        11,729       25,388

1995:
   Revenues                              $  2,936      $  1,862     $  4,798
   Earnings before income taxes               399           162          561
   Identifiable assets at December 31      12,777        12,836       25,613

1994:
   Revenues                              $  2,574     $     574     $  3,148
   Earnings before income taxes               358            51          409
   Identifiable assets at December 31      10,926         3,570       14,496

</TABLE>
14.   Unaudited Quarterly Financial Data

Summarized quarterly financial results and other data were as follows in 1996:

<TABLE>
<CAPTION>
                               First        Second        Third        Fourth
(in millions)                 Quarter       Quarter      Quarter      Quarter
                            -------------------------------------------------
<S>                           <C>           <C>          <C>          <C>
Net premiums earned           $1,236        $1,052       $1,075       $1,285
Net investment income            203           211          206          217
Total costs and expenses       1,331         1,129        1,150        1,361
Net earnings                     136           134          146          151



Certain data as presented in the  unaudited  quarterly  financial  data has been
reclassified to conform with the consolidated statement of earnings presentation
for the year ended December 31, 1996.

<PAGE>

                          Financial Statement Schedules

<PAGE>
                                                                    Schedule II
                     GE GLOBAL INSURANCE HOLDING CORPORATION
                                AND SUBSIDIARIES

                  Condensed Financial Information of Registrant
                                (Parent Company)

                              Statement of Earnings


</TABLE>
<TABLE>
<CAPTION>
                                            Year ended December 31,
                                         -----------------------------
(In millions)                             1996        1995        1994
                                         -----------------------------
<S>                                       <C>         <C>         <C>
Revenues
Net investment income                     $  -        $  1        $  -
Equity in undistributed earnings           472         384         208
Dividends from subsidiaries                123          63         150
                                          ----        ----        ----
Total revenues                             595         448         358
                                          ----        ----        ----

Costs and Expenses
Interest expense                            42          16           -
Other operating costs and expenses           1           -           -
                                          ----        ----        ----
Total costs and expenses                    43          16           -
                                          ----        ----        ----

Earnings before income taxes               552         432         358

Provision for income taxes                 (15)         (5)          -
                                          ----        ----        ----

Net earnings                              $567        $437        $358
                                          ====        ====        ====

See Notes to Condensed Financial Information of Registrant.
</TABLE>

<PAGE>
                                                                  Schedule II

                     GE GLOBAL INSURANCE HOLDING CORPORATION
                                AND SUBSIDIARIES

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

                         Statement of Financial Position

<TABLE>
<CAPTION>
                                                          December 31,
                                                 -----------------------------
(In millions)                                         1996            1995
                                                 -----------------------------
<S>                                                  <C>             <C>
Assets
Investments in subsidiaries                          $5,314          $4,774
Short-term investments, at amortized cost                 7              21
Other assets                                             22               -
                                                     ------          ------
Total assets                                         $5,343          $4,795
                                                     ======          ======

Liabilities and equity
Other liabilities                                    $   27          $    4
Short-term borrowings                                     -             600
Long-term borrowings                                    556               -
                                                     ------          ------
   Total liabilities                                    583             604
                                                     ------          ------

Common stock, $5,000 par value; authorized,
   issued and outstanding - 1,000 shares                  5               5
Preferred stock, $100,000 par value; authorized,
   issued and outstanding - 1,500 shares                150             150
Paid-in capital                                         845             845
Unrealized gains on subsidiary's investments            500             436
Foreign currency translation adjustments                 15              12
Retained earnings                                     3,245           2,743
                                                     ------          ------
   Total stockholder's equity                         4,760           4,191
                                                     ------          ------

Total liabilities and equity                         $5,343          $4,795
                                                     ======          ======

See Notes to Condensed Financial Information of Registrant.
</TABLE>


<PAGE>



                                                                   Schedule II

                     GE GLOBAL INSURANCE HOLDING CORPORATION
                                AND SUBSIDIARIES

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

                             Statement of Cash Flows

<TABLE>
<CAPTION>
                                                      Year ended December 31,
                                                   -----------------------------
(In millions)                                       1996        1995      1994
                                                   -----------------------------
<S>                                                  <C>      <C>          <C>
Cash Flows From Operating Activities
Net earnings                                        $ 567      $  437      $358
Adjustments to reconcile net earnings to cash
   from operating activities:
   Equity in undistributed earnings                  (472)       (384)     (208)
   Other, net                                           -           4         -
                                                    -----      ------       ---
   Cash from operating activities                      95          57       150
                                                    -----      ------       ---
Cash Flows From Investing Activities
Net (purchases) sales of short-term investments        14         (21)        -
Investment in subsidiary                                -      (1,055)        -
                                                    -----      ------       ---
   Cash from (used for) investing activities           14      (1,076)        -
                                                    -----      ------       ---
Cash Flows From Financing Activities
Proceeds from short-term borrowings                     -         600         -
Principal payments on short-term borrowings          (600)          -         -
Proceeds from long-term borrowings                    556           -         -
Contribution to capital                                 -         300         -
Proceeds from issuance of preferred stock               -         150         -
Dividends paid                                        (65)        (31)     (150)
                                                    -----      ------       ---
   Cash from (used for) financing activities         (109)      1,019      (150)
                                                    -----      ------       ---
Increase (decrease) in cash                             -           -         -
Cash at beginning of year                               -           -         -
                                                    -----      ------       ---
Cash at end of year                                 $   -      $    -       $ -
                                                    =====      ======       ===

See Notes to Condensed Financial Information of Registrant.
</TABLE>

<PAGE>

                     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")  is  a  wholly-owned
subsidiary of General Electric Capital Services,  Inc. ("GE Capital  Services"),
which is a wholly-owned  subsidiary of General Electric  Company.  Subsequent to
December 31, 1994, an inactive, wholly-owned subsidiary of Employers Reinsurance
Corporation ("ERC") was renamed GE Global and dividended to GE Capital Services.
GE Capital  Services then  contributed its 100% ownership of the common stock of
ERC  to GE  Global.  These  parent  company  financial  statements  reflect  the
combination  of GE  Global  and ERC at  historical  cost on a basis  similar  to
pooling of interest  accounting;  accordingly,  the accompanying  parent company
financial  statements include the accounts and operations of ERC for all periods
presented.

GE Global's  primary asset is its 100%  investment in the common stock of ERC, a
Missouri-domiciled  property/casualty  reinsurance company. ERC owns 100% of the
common stock of various other  property/casualty  reinsurance,  life reinsurance
and reinsurance intermediary companies.


<PAGE>
                                                                   Schedule III
                     GE GLOBAL INSURANCE HOLDING CORPORATION
                                AND SUBSIDIARIES

                       Supplementary Insurance Information

<TABLE>
<CAPTION>
    Column A                Column B         Column C            Column D       Column E          Column F
------------------------------------------------------------------------------------------------------------
                           Deferred       Claims and Claim
                           Insurance       Expenses and                        Accumulated          Net
(In millions)             Acquisition      Future Policy         Unearned      Contract           Premiums
                             Costs           Benefits            Premiums       Values             Earned
                          ----------------------------------------------------------------------------------
December 31, 1996:
<S>                           <C>             <C>                  <C>            <C>               <C>
   Property/Casualty          $244            $10,869              $1,161         $    -            $4,015
   Life                        251                831                   9          1,643               633
                              ----            -------              ------         ------            ------
Total                         $495            $11,700              $1,170         $1,643            $4,648
                              ====            =======              ======         ======            ======

December 31, 1995:
   Property/Casualty          $303            $11,145              $1,322         $    -            $3,446
   Life                        171                719                   6          1,809               440
                              ----            -------              ------         ------            ------
Total                         $474            $11,864              $1,328         $1,809            $3,886
                              ====            =======              ======         ======            ======

December 31, 1994:
   Property/Casualty          $163            $ 6,020              $  752         $    -            $2,294
   Life                        104                657                   -          1,934               193
                              ----            -------              ------         ------            ------
Total                         $267            $ 6,677              $  752         $1,934            $2,487
                              ====            =======              ======         ======            ======
</TABLE>
<TABLE>
<CAPTION>
                            Column G         Column H            Column I       Column J          Column K
                          ----------------------------------------------------------------------------------
                                                                 Amortization
                                                                     of
                                                                  Deferred         Other
                               Net         Claims, Claim          Insurance    Operating Costs       Net
(In millions)              Investment      Expenses and          Acquisition        and           Premiums
                             Income       Policy Benefits          Costs          Expenses         Written
                          ----------------------------------------------------------------------------------
December 31, 1996:
<S>                           <C>              <C>                 <C>              <C>             <C>
   Property/Casualty          $656            $ 2,869              $  989           $350            $3,937
   Life                        181                504                 117            142
                              ----            -------              ------           ----
Total                         $837            $ 3,373              $1,106           $492
                              ====            =======              ======           ====

December 31, 1995:
   Property/Casualty          $519            $ 2,649              $  761           $261            $3,123
   Life                        157                345                  86            135
                              ----            -------              ------           ----
Total                         $676            $ 2,994              $  847           $396
                              ====            =======              ======           ====

December 31, 1994:
   Property/Casualty          $410            $ 1,744              $  501           $183            $2,380
   Life                        118                156                  50            105
                              ----            -------              ------           ----
Total                         $528            $ 1,900              $  551           $288
                              ====            =======              ======           ====

</TABLE>


<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.



                                     GE GLOBAL INSURANCE HOLDING CORPORATION

March 27, 1997                       By:           /s/ James F. Dore
                                         ------------------------------------
                                                     James F. Dore
                                      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.

     Signatures                        Title                          Date

  /s/ KAJ AHLMANN     President, Chief Executive Officer and      March 27, 1997
--------------------- Director (Principal Executive Officer)
    Kaj Ahlmann


 /s/ JAMES F. DORE    Vice President, Chief Financial Officer     March 27, 1997
--------------------- and Director (Principal Financial and
   James F. Dore      Accounting Officer)


   /s/ G.C. WENDT     Chairman                                    March 27, 1997
---------------------
    Gary C. Wendt


 /s/ JAMES A. PARKE   Director                                    March 27, 1997
---------------------
  James A. Parke


/s/ JOHN M. CONNELLY  Senior Vice President, General Counsel      March 27, 1997
--------------------- and Director
  John M. Connelly