<PAGE>
                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, 2000

                                       OR

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

                 For the transition period from ________to________

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

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

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

   5200 Metcalf, Overland Park, Kansas      66201       (913) 676-5200
(Address of principal executive offices) (Zip Code) (Registrant's telephone
                                                    number, including area code)

                                 ---------------

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

                                                        Name of each
         Title of each class                    exchange on which registered
         -------------------                    ----------------------------
   7% Notes Due February 15, 2026                  New York Stock Exchange
   6.45% Notes Due March 1, 2019                   New York Stock Exchange
   7.5% Notes Due June 15, 2010                    New York Stock Exchange
   7.75% Notes Due June 15, 2030                   New York Stock Exchange

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

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


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

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

Aggregate  market  value  of the  voting  stock  held  by  nonaffiliates  of the
registrant at March 23, 2001. None.

At March 23,  2001,  1,000 shares of common stock with a par value of $5,000 per
share were outstanding.

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


<PAGE>
<TABLE>
<CAPTION>
                                      TABLE OF CONTENTS

                                                                                           Page
                                                                                           ----
<S>                                                                                        <C>

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


PART II
   Item 5.   Market for the Registrant's Common Equity and Related Stockholder Matters......13
   Item 6.   Selected Financial Data........................................................13
   Item 7.   Management's Discussion and Analysis of Financial Condition
                and Results of Operations...................................................14
   Item 7A.  Quantitative and Qualitative Disclosures About Market Risk.....................22
   Item 8.   Financial Statements and Supplementary Data....................................22
   Item 9.   Changes in and Disagreements with Accountants on Accounting
                and Financial Disclosure....................................................22


PART III
   Item 10.  Directors and Executive Officers of the Registrant.............................23
   Item 11.  Executive Compensation.........................................................23
   Item 12.  Security Ownership of Certain Beneficial Owners and Management.................23
   Item 13.  Certain Relationships and Related Transactions.................................23


PART IV
   Item 14.  Exhibits, Financial Statement Schedules and Reports on Form 8-K................23
</TABLE>


<PAGE>
                                     PART I

Item 1.  Business.

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

The  principal  executive  offices of GE Global  Insurance  are  located at 5200
Metcalf, Overland Park, Kansas 66201 (Telephone number (913) 676-5200).


Overview of the Reinsurance Industry

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

The  global   reinsurance   industry   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 expanding  their  markets,  entering  into new
reinsurance niches,  offering new reinsurance products and spreading their risks
geographically.  This changing reinsurance environment may affect the industry's
profitability which has historically been influenced by the insurance industry's
underwriting cycle, changes in interest rates and catastrophic events.


General

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

The Company  conducts  business and  services its accounts  through a network of
local offices  located in cities  throughout the world. As of December 31, 2000,
the  Company  had 19 offices  in the North  American  region,  13 offices in the
European  region,  11  offices in the  Asia/Pacific  region and 6 offices in the
Latin American 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 in the  property and  casualty  segment,  the
Company  operates in a  decentralized  environment  with respect to underwriting
decisions and customer service.

The Company also competes in the reinsurance broker market throughout the world.
During 1998 and in early 1999, the Company  significantly  expanded its presence
in the  reinsurance  broker  market  by  acquiring  Kemper  Reinsurance  Company
(subsequently  renamed  GE  Reinsurance  Corporation  - "GE Re") and Eagle  Star
Reinsurance  Company Limited  ("Eagle Star Re") (See Note 3 to the  consolidated
financial statements). The acquisitions of GE Re and Eagle Star Re significantly
enhance the Company's  distribution channel in the worldwide  reinsurance broker
market and further enables the Company to respond to the growing risk management
needs of a wider and more diverse group of customers.  The acquisitions of GE Re
and Eagle Star Re position the Company as one of the largest  reinsurance broker
writers in the world.

                                        1


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

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

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

During 1998, the Company,  either directly or through its  affiliates,  acquired
three  major  property  and  casualty  insurance/reinsurance   businesses  which
strengthened   its  global  presence  in  the  healthcare   product  lines,  the
broker-serviced markets and the Fortune 1000 commercial property markets.

In the fourth quarter of 1998, the Company completed the acquisitions of Medical
Protective  Corporation ("Medical  Protective") and GE Re. Medical Protective is
the oldest medical professional  liability insurer of physicians and dentists in
the United States.  The cash  consideration  of  approximately  $628 million was
initially  financed by GE Capital  Corporation via an interim loan agreement and
subsequently  refinanced in 2000 through additional long-term borrowings.  GE Re
is a property  and  casualty  reinsurance  company  principally  doing  business
through intermediaries. The cash consideration of approximately $468 million was
financed   initially  in  1998  by  utilizing  existing  credit  facilities  and
subsequently refinanced in 1999 through additional long-term borrowings.

On January 6, 1998,  the  Company  purchased  the assets and assumed the renewal
rights  of  Industrial  Risk  Insurers  ("IRI"),  a leader in  providing  highly
protected risk property  insurance,  for a cash  consideration  of approximately
$235 million.  IRI writes  business  utilizing  the  licensing  authority of its
members and the business  underwritten is  subsequently  allocated to members in
proportion to membership participation.

Also in recent years,  the Company has expanded its global business  through the
extension  of its local office  network.  The Company  opened  offices in Seoul,
Winterthur,  San Juan and Sao Paulo in 2000,  Rio de Janeiro  and Warsaw in 1999
and Kuala Lumpar and Shanghai in 1998.

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


                                        2


<PAGE>
Lines of Business

The   Company's   two   business   segments   are  (1)   property  and  casualty
insurance/reinsurance and (2) life reinsurance.  The Company's principal product
lines under the  property  and  casualty  segment are  traditional  property and
casualty reinsurance,  healthcare reinsurance and 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
geographic breakdown,  based on net premiums written, of the Company's principal
product lines is summarized as follows:

<TABLE>
<CAPTION>
                                                           Year ended December 31,
                                  -------------------------------------------------------------------------
(In millions)                             2000                      1999                      1998
                                  ---------------------     ---------------------     ---------------------
                                                Inter-                    Inter-                    Inter-
                                  Domestic     national     Domestic     national     Domestic     national
                                  ---------------------     ---------------------     ---------------------
<S>                                  <C>          <C>          <C>          <C>          <C>          <C>

Property and Casualty Segment
   Property and Casualty.........  $2,103       $2,677       $2,102       $2,470       $1,487       $2,306
   Healthcare....................   1,294           76          851           43          514           83
   Specialty.....................     404            -          417            -          498            -
Life Segment.....................     832          805          615          649          422          674
                                   ------       ------       ------       ------       ------       ------
   Total.........................  $4,633       $3,558       $3,985       $3,162       $2,921       $3,063
                                   ======       ======       ======       ======       ======       ======
</TABLE>

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


Property and Casualty Insurance/Reinsurance Segment

Property  and  Casualty   Reinsurance.   The  Company's  largest  product  line,
traditional property and casualty  reinsurance,  accounted for approximately 58%
of the Company's  worldwide net premiums written in 2000. The Company's  premium
volume in the property and casualty  segment is derived  principally from treaty
agreements,  which enable the Company to maintain lower  operating costs because
fewer  personnel are required to  administer  treaty  business than  facultative
business.  Most of the  Company's  casualty  business is written on an excess of
loss basis  because it better  enables the  Company to control  its  exposure on
business  that has a  relatively  longer claim  settlement  pattern  (i.e.,  the
"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  international  property and casualty business services  worldwide
markets, including most European countries and countries in the Middle East, Far
East and Latin America. For the year ended December 31, 2000,  approximately 58%
of the Company's  international  net premiums written from property and casualty
reinsurance  was  derived  from  property  reinsurance,  approximately  21% from
casualty reinsurance and approximately 21% from aviation and marine reinsurance.
Based  on  2000  net  premiums  written,  approximately  43%  of  the  Company's
international property and casualty business was written on a direct basis, with
the remainder written through brokers.


                                        3


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

The property and casualty  reinsurance  industry has  experienced  a significant
increase in  catastrophic  exposure and loss during the last  decade.  Increased
population  density,  particularly in regions  susceptible to tropical storms or
earthquakes, and the higher incidence and greater severity of catastrophes,  has
increased the losses incurred in many recent catastrophes.  As a result of these
developments,  the Company has taken  steps to limit its  exposure by  carefully
monitoring  and  allocating  its  property  and  casualty  exposure  to specific
geographic zones, 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 and
targets employers, public entities, manufacturers and others for certain product
lines.   Coverages   include  primary  insurance  and  reinsurance  for  medical
professional  liability and insurance  protecting  primary  insurers  (including
self-insurers)  in the healthcare  market (i.e.,  excess workers'  compensation,
stop loss insurance, HMO reinsurance and provider excess coverages).

The  healthcare  industry  continues  to  change  and  evolve  due to  voluntary
healthcare reform, managed healthcare initiatives,  deteriorating profits driven
by the  competitive  marketplace  and the  uncertainty  related to the extent of
government regulation.  In addition,  companies that historically specialized in
one line of  business  and one  geographic  area have  expanded  their  lines of
business and are now writing multiple lines of business in a broader  territory.
The Company, to serve the growing needs of their clients,  has developed new and
innovative  healthcare  products and has expanded  coverages to include property
and other lines of business.

The Company  believes that it is well  positioned  to compete in the  healthcare
market because of its wide range of experience in providing healthcare liability
coverage  and  excess  protection  for  self-insured  employers,  leveraging its
acquisition  of  Medical   Protective  and  utilizing   multiple   products  and
services 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 primary  commercial  property  and casualty  policies  written on an
admitted  and  non-admitted  basis in niche  markets.  The  Company's  specialty
business  concentrates  on providing  commercial  insurance  products for target
markets,  usually  professional  associations and homogeneous groups.  Specialty
products  include  professional  liability  programs  and niche  programs in the
general property and casualty area. This coverage provides  insurance for errors
and omissions (E&O) arising out of the  professional  activities of the insureds
and commercial property and casualty coverages for niche programs.

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

Competition  for the  classes of  business  underwritten  within  the  Company's
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 and automated processing services, to its wholesalers and
managing general agents producing such business.


                                        4


<PAGE>
Life Reinsurance Segment

Life  Reinsurance.  The Company is engaged in the  reinsurance  of various  life
insurance products,  including term, whole and universal life, annuities,  group
life, group and individual long-term health and disability products and provides
financial  reinsurance to life  insurers.  Based on net premiums  written,  life
reinsurance  accounted for approximately 20% of the Company's worldwide business
in 2000.

With respect to life  reinsurance,  the Company  writes mostly on a direct basis
with  primary  insurers.   The  Company's  life  reinsurance  business  consists
principally of treaty business and is written generally on a pro-rata basis. The
Company's  domestic life  reinsurance  business is written in every state in the
United States. The Company's  international  life reinsurance  business services
worldwide  markets.  For the year ended December 31, 2000,  approximately 63% of
the  Company's  international  life  reinsurance  net premiums  written were for
traditional  life  reinsurance,  with the  balance  for  health  and  disability
reinsurance.

The Company  believes  that  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.

Financial Reinsurance. The two principal categories of financial reinsurance are
financial reinsurance and financial risk reinsurance. Financial reinsurance does
not transfer  significant  underwriting  risk to the  reinsurer  and is designed
primarily to enhance the current  statutory  surplus of the ceding company while
reducing future statutory earnings as amounts are repaid to the reinsurer.  This
financial transaction is effectively collateralized by anticipated future income
streams from selected insurance policies.  Financial reinsurance typically has a
duration of three to five years.  Financial risk  reinsurance  represents a long
term  traditional  risk sharing  arrangement  where  reinsurance  is provided on
existing portfolios of in-force business.  The Company's focus recently has been
on expanding the financial risk reinsurance line.


Property and Casualty Reserves for Unpaid Claims and Claim Expenses

The  Company's  insurance/reinsurance  subsidiaries  maintain  reserves to cover
their  estimated  ultimate  liability for unpaid claims and claim  expenses with
respect  to  reported  and  unreported  claims  incurred  as of the  end of each
accounting  period (net of estimated  related salvage and  subrogation  claims).
These reserves are estimates that involve actuarial and statistical  projections
of the expected cost of the ultimate  settlement  and  administration  of unpaid
claims based on facts and circumstances  then known,  estimates of future trends
in claims severity and other variable factors such as inflation 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 (i.e., 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  considered  changes in estimates
for  accounting  purposes and are reflected in the  financial  statements in the
period in which the adjustment occurs.


                                        5


<PAGE>
When a claim is  reported  to a ceding  company,  the  ceding  company's  claims
personnel  establish a "case  reserve" for the estimated  amount of the ultimate
payment.  The estimate reflects the informed judgment of such personnel based on
general  insurance  reserving  practices and on the  experience and knowledge of
such personnel regarding the nature and value of the specific type of claim. The
Company, in turn,  typically  establishes a case reserve when it receives notice
of a claim from the ceding  company.  Such reserves are based on an  independent
evaluation  by the  Company's  claims  departments,  taking  into  consideration
coverage,  liability,  severity of injury or damage, jurisdiction, an assessment
of the ceding company's  ability to evaluate and handle the claim and the amount
of reserves  recommended  by the ceding  company.  Case  reserves  are  adjusted
periodically  by the claims  departments  based on subsequent  developments  and
audits of ceding companies.

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

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

Reserve Development. The development of the Company's net balance sheet property
and casualty liabilities for unpaid claims and claim expenses for accident years
1990 through 2000 is summarized in the following table.

Net  Liability.  The first row of data shows the  estimated  net  liability  for
unpaid claims and claim expenses at December 31 for each year from 1990 to 2000.
The liability includes both case and IBNR reserves as of each year-end date, net
of anticipated recoveries from other reinsurers.  The rows immediately following
the first row of data show  cumulative paid data at December 31, as of one year,
two years, ..., 10 years of subsequent payments.

Net Liability Re-estimated. The middle rows of data show the re-estimated amount
for previously  reported net liability based on experience as of the end of each
subsequent calendar year's results. This estimate is changed as more information
becomes known about the underlying  claims for individual  years. The cumulative
redundancy  (deficiency)  shown in the  table is the  aggregate  net  change  in
estimates over the period of years  subsequent to the calendar year reflected at
the top of the  respective  columns.  The amount in the line titled  "Redundancy
(Deficiency) at December 31, 2000," 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, 2000, of net liability for unpaid claims and claim expenses for all
years prior to and including the Base Year. A redundancy means that the original
estimate  was  greater  than the  re-estimate  and a  deficiency  means that the
original  estimate  was  less  than  the  re-estimate.




                                        6


<PAGE>
<TABLE>
<CAPTION>
                                              Changes in Historical Reserves for Unpaid Claims and Claim Expenses
                                                  For the Last Ten Years - GAAP Basis as of December 31, 2000

                                                                    Year ended December 31,
                            --------------------------------------------------------------------------------------------------------
(In millions)                 1990     1991     1992     1993      1994      1995      1996      1997     1998      1999      2000
                            --------------------------------------------------------------------------------------------------------
<S>                           <C>      <C>      <C>      <C>       <C>       <C>       <C>       <C>        <C>      <C>      <C>

Net liability for unpaid
   claims and claim
   expenses                 $3,579   $3,596   $3,991   $4,525    $5,071    $9,351    $9,458    $9,114   $12,495   $13,210   $12,202
Cumulative paid as of:
One year later.........        747      665      802      949     1,115     1,964     1,949     2,176     2,867     4,811       ---
Two years later........      1,119    1,103    1,274    1,602     1,804     3,130     3,189     3,241     5,803       ---       ---
Three years later......      1,524    1,499    1,739    2,054     2,341     3,933     3,881     4,863       ---       ---       ---
Four years later.......      1,772    1,784    2,036    2,424     2,708     4,464     5,294       ---       ---       ---       ---
Five years later.......      1,989    2,008    2,293    2,690     2,988     5,686       ---       ---       ---       ---       ---
Six years later........      2,173    2,208    2,485    2,952     3,318       ---       ---       ---       ---       ---       ---
Seven years later......      2,348    2,362    2,688    3,181       ---       ---       ---       ---       ---       ---       ---
Eight years later......      2,482    2,531    2,841      ---       ---       ---       ---       ---       ---       ---       ---
Nine years later.......      2,630    2,653      ---      ---       ---       ---       ---       ---       ---       ---       ---
Ten years later........      2,738      ---      ---      ---       ---       ---       ---       ---       ---       ---       ---

Net liability
   re-estimated as of:
One year later.........     $3,616   $3,625   $3,919   $4,612    $5,173    $9,192    $9,229    $9,179   $12,410   $13,749       ---
Two years later........      3,583    3,587    4,066    4,656     5,313     8,959     9,127     8,655    12,115       ---       ---
Three years later......      3,564    3,701    4,095    4,793     5,256     8,907     8,549     8,453       ---       ---       ---
Four years later.......      3,654    3,687    4,238    4,747     5,155     8,392     8,252       ---       ---       ---       ---
Five years later.......      3,635    3,818    4,154    4,668     4,902     8,029       ---       ---       ---       ---       ---
Six years later........      3,758    3,771    4,075    4,487     4,804       ---       ---       ---       ---       ---       ---
Seven years later......      3,734    3,711    3,942    4,402       ---       ---       ---       ---       ---       ---       ---
Eight years later......      3,674    3,592    3,906      ---       ---       ---       ---       ---       ---       ---       ---
Nine years later.......      3,565    3,591      ---      ---       ---       ---       ---       ---       ---       ---       ---
Ten years later........      3,593      ---      ---      ---       ---       ---       ---       ---       ---       ---       ---
Redundancy (Deficiency)
   at December 31, 2000        (14)       5       85      123       267     1,322     1,206       661       380      (539)      ---
Effect of foreign
   exchange (1)                (42)     (45)     (30)      (2)      (31)     (636)     (635)     (370)     (730)     (668)      ---
                            ------   ------   ------   ------    ------    ------    ------    ------   -------   -------   -------
Redundancy (Deficiency)
   at December 31, 2000,
   excluding foreign
   exchange                 $  (56)  $  (40)  $   55   $  121    $  236    $  686    $  571    $  291   $  (350)  $(1,207)  $   ---
                            ======   ======   ======   ======    ======    ======    ======    ======   =======   =======   =======
</TABLE>

<TABLE>
<CAPTION>
(In millions)                                  1992      1993      1994      1995      1996      1997      1998      1999     2000
                                              -------------------------------------------------------------------------------------
<S>                                                       <C>       <C>       <C>       <C>       <C>       <C>       <C>      <C>

Balance at December 31 - gross............... $4,815    $5,312    $6,020   $11,145   $10,869   $10,936   $15,342   $17,435  $16,932
Less reinsurance recoverables................   (824)     (787)     (949)   (1,794)   (1,411)   (1,822)   (2,847)   (4,225)  (4,730)
                                              ------    ------    ------    ------   -------   -------   -------   -------  -------
Balance at December 31 - net.................  3,991     4,525     5,071     9,351     9,458     9,114    12,495    13,210   12,202
                                              ------    ------    ------    ------   -------   -------   -------   -------  -------
Latest re-estimated liability - gross........  5,031     5,486     5,911     9,540     9,713    10,232    15,394    19,239      ---
Less re-estimated reinsurance recoverables... (1,125)   (1,084)   (1,107)   (1,511)   (1,461)   (1,779)   (3,279)   (5,490)     ---
                                              ------    ------    ------    ------   -------   -------   -------   -------  -------
Latest re-estimated liability - net..........  3,906     4,402     4,804     8,029     8,252     8,453    12,115    13,749      ---
                                              ------    ------    ------    ------   -------   -------   -------   -------  -------
Gross redundancy (deficiency)................   (216)     (174)      109     1,605     1,156       704       (52)   (1,804)     ---
Effect of foreign exchange (1)...............    (39)       (9)      (41)     (785)     (788)     (472)   (1,089)   (1,127)     ---
                                              ------    ------    ------    ------   -------   -------   -------   -------  -------
Gross redundancy (deficiency), excluding
   foreign exchange.......................... $ (255)   $ (183)   $   68    $  820   $   368   $   232   $(1,141)  $(2,931) $   ---
                                              ======    ======    ======    ======   =======   =======   =======   =======  =======
</TABLE>

(1)  The  results of the  Company's  international  operations  translated  from
     functional  currencies  into U.S.  dollars are included  with the Company's
     U.S.   underwriting   operations  in  this  table.   The  foreign  currency
     translation impact on the cumulative  redundancy  (deficiency)  arises from
     the  difference  between  reserve  developments  translated at the exchange
     rates at the end of the  year in  which  the  liabilities  were  originally
     estimated  and the  exchange  rates  at the end of the  year in  which  the
     liabilities were re-estimated.


Note:  For a description of the purpose of the above table and the various table
sections,  please refer to the immediately  preceding  section entitled "Reserve
Development."


                                        7

<PAGE>
A number of major  trends  that  occurred  within the  insurance  industry,  the
economy in general and several  Company-specific  factors have had a significant
effect on the Company's  liabilities for unpaid claims and claim expenses during
the period covered by the preceding  table.

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

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

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

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




                                        8


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

<TABLE>
<CAPTION>
                                                      Year ended December 31,
                                                 ----------------------------------
(In millions)                                      2000         1999         1998
                                                 ----------------------------------
<S>                                                 <C>          <C>          <C>

Balance at January 1 - gross.................... $17,435      $15,342      $10,936
Less reinsurance recoverables...................  (4,225)      (2,847)      (1,822)
                                                 -------      -------      -------
Balance at January 1 - net......................  13,210       12,495        9,114
                                                 -------      -------      -------

Claims and expenses incurred:
   Current year.................................   4,401        4,162        3,286
   Prior years..................................     934          233         (126)
                                                 -------      -------      -------
                                                   5,335        4,395        3,160
                                                 -------      -------      -------

Claims and expenses paid:
   Current year.................................  (1,290)      (1,228)      (1,074)
   Prior years..................................  (4,811)      (2,867)      (2,176)
                                                 -------      -------      -------
                                                  (6,101)      (4,095)      (3,250)
                                                 -------      -------      -------

Claim reserves related to acquired companies....     279          793        3,470

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

Foreign exchange and other......................    (521)        (176)           1
                                                 -------      -------      -------
Balance at December 31 - net....................  12,202       13,210       12,495
Add reinsurance recoverables....................   4,730        4,225        2,847
                                                 -------      -------      -------
Balance at December 31 - gross.................. $16,932      $17,435      $15,342
                                                 =======      =======      =======
</TABLE>
The  liabilities  for claims and claim  expenses in the preceding  table include
long-term  disability  claims  that are  discounted  at a 6% rate for all  years
presented. As a result of discounting the Company's long-term disability claims,
total  liabilities  for  claims  and  claim  expenses  have been  reduced  by an
estimated 1% and 2% at December 31, 2000 and 1999,  respectively.  The accretion
of discount is included in current  operating results as part of the development
of prior year liabilities. Discounts amoritized as a percentage of claims, claim
expenses and policy  benefits were less than 1% for the years ended December 31,
2000, 1999 and 1998.

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

<TABLE>
<CAPTION>
                                                                December 31,
                                                      ---------------------------------
(In millions)                                           2000        1999         1998
                                                      ---------------------------------
<S>                                                      <C>         <C>          <C>

Statutory basis reserves for U.S. companies - net.... $ 6,213     $ 7,204      $ 7,679
Adjustments to GAAP basis (1)........................     500         636          667
                                                      -------     -------      -------
GAAP basis reserves for U.S. companies - net.........   6,713       7,840        8,346
GAAP basis reserves for non-U.S. companies - net.....   5,489       5,370        4,149
                                                      -------     -------      -------
Total GAAP basis reserves - net......................  12,202      13,210       12,495
Add reinsurance recoverables.........................   4,730       4,225        2,847
                                                      -------     -------      -------
GAAP basis reserves - gross.......................... $16,932     $17,435      $15,342
                                                      =======     =======      =======
</TABLE>

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






                                        9
<PAGE>

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

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

<TABLE>
<CAPTION>
                                                     Year ended December 31,
                                                 -------------------------------
(In millions)                                     2000        1999         1998
                                                 -------------------------------
<S>                                               <C>          <C>         <C>

Balance at January 1 - gross....................  $800        $995         $462
Less reinsurance recoverables...................  (195)       (206)        (193)
                                                  ----        ----         ----
Balance at January 1 - net......................   605         789          269

Claims and expenses incurred....................    99          (7)          35
Claims and expenses paid........................   (58)       (210)         (39)
Claim reserves related to acquired companies....     -          33          524
                                                  ----        ----         ----

Balance at December 31 - net....................   646         605          789
Add reinsurance recoverables....................   183         195          206
                                                  ----        ----         ----
Balance at December 31 - gross..................  $829        $800         $995
                                                  ====        ====         ====
</TABLE>

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

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

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

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

Future policy benefits for  traditional  life and health  reinsurance  contracts
represent  the  present  value of such  benefits  based on  mortality  and other
assumptions  which were  appropriate at the time the policies were issued or, in
the event the policies were acquired by the Company from another insurer, at the
date of acquisition.  Interest rate  assumptions used in calculating the present
value  generally  ranged  from 3.00% to 8.50% per annum at  December  31,  2000.
Payments  received  from sales of universal  life and  investment  contracts are
recognized by providing  liabilities equal to the accumulated contract values of
the policyholders' contracts. Interest rates credited to such universal life and
investment  contracts are generally  guaranteed for a specified time period with
renewal rates  determined by the Company.  Such crediting  interest rates ranged
from 3.00% to 9.00% per annum in 2000.




                                       10


<PAGE>

Regulatory Matters

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

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

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

The  National  Association  of  Insurance  Commissioners  ("NAIC")  has recently
adopted model statutory  accounting  practices to take effect in 2001. Statutory
accounting practices determine,  among other things, the statutory surplus of an
insurance  company  and,  therefore,  the  amount  of funds  that can be paid as
dividends to the Company by its  insurance  subsidiaries.  However,  efforts are
continuing by insurance  regulators,  public  accounting firms and the insurance
industry  to develop  interpretations  of the NAIC  model.  While the company is
still in the  process  of  assessing  the  ultimate  impact  the new  accounting
practices will have, analysis performed to date indicates that adoption of these
new  practices  will  likely  result in an increase  to  consolidated  statutory
surplus,  principally due to the admission for statutory  accounting purposes of
certain deferred tax assets that were previously required to be non-admitted.

Risk-Based Capital. The NAIC has adopted minimum risk-based capital requirements
to  evaluate  the  adequacy of  statutory  capital and surplus in relation to an
insurance  company's  risks.   Regulatory  compliance  with  risk-based  capital
requirements  is defined by a ratio of a  company's  regulatory  total  adjusted
capital to its authorized  control level risk-based  capital,  as defined by the
NAIC. At December 31, 2000,  each of GE Global  Insurance's  domestic  insurance
company subsidiaries exceeded the minimum risk-based capital requirements.

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




                                       11


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

The maximum  amount  available for the payment of dividends by ERC without prior
regulatory  approval is $206  million at  December  31,  2000.  Such amount will
increase to $360 million by December 31,  2001.  Of this amount,  $88 million is
committed to pay  dividends on the  preferred  stock issued by ERC to GE Capital
Corporation.  GE Re will not be able to make any dividend  payments  during 2001
without  the  prior  approval  of the  Director  of  Insurance  for the State of
Illinois.  The maximum amount available for the payment of dividends during 2001
by Medical  Protective  without prior  regulatory  approval is $80 million after
December 18, 2001.

International Regulations. Based on 2000 net premiums written, approximately 43%
of the Company's business is carried on outside of the United States. The degree
of regulation and  supervision in foreign  jurisdictions  varies from minimal in
some to stringent in others.  Licenses  issued by foreign  authorities to the GE
Frankona Re Group are subject to modification or revocation by such authorities,
and such subsidiaries could be prevented from conducting  business in certain of
the jurisdictions  where they currently operate. In the past, the GE Frankona Re
Group has been allowed to modify their  operations to conform with new licensing
requirements   in  all   jurisdictions   that  are  material  to  the  Company's
international operations.

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

Item 2.  Properties.

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


Item 3.  Legal Proceedings.

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


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

Omitted



                                       12
<PAGE>

                                     PART II


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

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


Item 6.  Selected Financial Data.

<TABLE>
<CAPTION>
                           Consolidated Financial Data

                                                                 Year ended December 31,
                                               ------------------------------------------------------------
(In millions)                                     2000         1999         1998         1997         1996
                                               ------------------------------------------------------------
<S>                                               <C>          <C>          <C>          <C>          <C>

Total revenues................................  $10,131     $ 9,031      $ 7,203      $ 5,784      $ 5,751
Net premiums written..........................    8,191       7,147        5,984        4,545        4,573
Net investment income.........................    1,315       1,151          985          910          837
Net realized gains on investments.............      522         699          432          303          223
Earnings before income taxes..................      605         988        1,070          882          780
Net earnings..................................      581         720          779          648          567
Total investments.............................   21,191      21,539       21,987       18,343       16,479
Total assets..................................   38,564      37,561       35,047       27,532       25,388
Stockholder's equity..........................  $ 6,025     $ 5,575      $ 6,020      $ 5,374      $ 4,760
Return on equity (average)....................     10.0%       12.4%        13.7%        12.8%        12.7%
Stockholder's equity, excluding unrealized
   gains (losses) on investment securities....  $ 5,882     $ 5,524      $ 5,088      $ 4,628      $ 4,260
Return on equity (average), excluding
   unrealized gains (losses) on investment
   securities.................................     10.2%       13.6%        16.0%        14.6%        14.1%
</TABLE>


                                       13


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

Overview

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

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

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

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

Year Ended December 31, 1999 Compared to Year Ended December 31, 1998

Net  premiums  written  increased  $1,163  million  or  19% in  1999,  primarily
attributable  to inclusion of a full year of operating  activity for the October
1998 acquisitions of GE Re and Medical Protective, the March 1999 acquisition of
Eagle Star Re and core  growth in  various  product  lines.  This  increase  was
partially  offset by continued  competitive  market  conditions,  an increase in
contingently  payable  ceded  premiums  relating  to recorded  recoveries  under
aggregate  excess  retrocession  programs  and the  impact of  foreign  currency
translation in connection with the  strengthening of the U.S. dollar compared to
most major European currencies.

Net  earnings  decreased  $59  million or 8% in 1999,  including  an increase in
after-tax net realized gains on investments of $176 million. Excluding after-tax
net realized gains on investments, net earnings decreased $235 million or 46% in
1999.  This  decrease  was  primarily  attributable  to  increased  property and
casualty-related  losses  related to the  frequency  and  severity of large loss
events  occurring in 1999 as compared to 1998 and, to a lesser  extent,  adverse
development  on prior year  recorded  losses.  Large loss events are  individual
events  that,  after  specific   reinsurance   recoveries  and  related  premium
adjustments,  affect  operations by $2 million or more,  and include losses from
earthquakes,  aviation or railroad  accidents,  fire damage, and weather-related
damage from hurricanes,  tornadoes, wind and ice. Large loss events occurring in
1999 resulted in recorded losses of approximately  $510 million,  as compared to
approximately  $150 million in 1998. A portion of the 1999 losses was  recovered
under aggregate excess retrocession coverages obtained in the ordinary course of
business.  The increase in property and  casualty-related  losses was  partially
offset by a $166 million  increase in net  investment  income,  primarily due to
growth  in the  investment  portfolio  as a result of  acquisitions,  and a $134
million increase in other revenues, primarily due to acquisitions, equity-method
investments  and a gain on  disposition of the Company's  reinsurance  brokerage
subsidiary.  An increase in underwriting and operating expenses  associated with
acquisitions and continued competitive market conditions also contributed to the
deterioration in underwriting results.

                                       14


<PAGE>
Domestic Property and Casualty Business

<TABLE>
<CAPTION>
                                                    Year ended December 31,
                                                 -------------------------------
(In millions)                                      2000        1999        1998
                                                 -------------------------------
<S>                                                <C>         <C>         <C>

Net premiums written............................ $3,801      $3,370      $2,499
Net underwriting loss...........................   (419)       (423)        (58)
Net investment income...........................    606         513         419
Earnings before income taxes....................    250         533         601
Net realized gains on investments...............    128         516         311
Earnings before income taxes, excluding
   net realized gains on investments............    122          17         290
GAAP ratios (1):
   GAAP claims and claim expense ratio..........   77.4%       79.5%       68.9%
   GAAP underwriting expense ratio..............   34.4%       33.6%       33.6%
                                                  -----       -----       -----
   GAAP combined ratio..........................  111.8%      113.1%      102.5%
                                                  =====       =====       =====
</TABLE>

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


Net  premiums  written  increased  $431  million  or  13%  in  2000,   primarily
attributable to the combination of hardening pricing within the overall property
and casualty  insurance/reinsurance  industry  and a focus on growth  within the
niche direct commercial  market.  This increase was partially offset by the 2000
decision to exit certain lines of business and customer relationships as part of
a  reunderwriting  initiative  undertaken  during the year and higher  levels of
ceded  premiums  under  aggregate  excess  retrocession  programs.  Net premiums
written  increased $871 million or 35% in 1999,  primarily  attributable  to the
acquisitions of GE Re and Medical  Protective and core growth in various product
lines,  partially  offset by  continued  competitive  market  conditions  and an
increase in contingently  payable ceded premiums relating to recorded recoveries
under aggregate excess retrocession programs.

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

The  relatively  high  combined  ratios in 2000 and 1999  primarily  reflect the
effects of  continued  insufficient  pricing  within the  overall  property  and
casualty  insurance/reinsurance  industry and adverse  development on prior year
recorded  losses.  The 1999  combined  ratio was also  adversely  impacted  by a
heightened frequency and severity of large loss events occurring in that year.

Net  investment  income  increased  $93  million  or  18%  in  2000,   primarily
attributable to the combination of higher average investment yields (as a result
of the increasing U.S.  interest rate  environment  throughout most of 2000) and
repositioning  of the  investment  portfolio to include a higher  proportion  of
fixed maturity securities. Net investment income increased $94 million or 22% in
1999, primarily  attributable to inclusion of a full year of investment activity
in 1999 for the 1998 GE Re and Medical Protective acquisitions.

Earnings  before income  taxes,  excluding  net realized  gains on  investments,
increased $105 million in 2000,  primarily  attributable  to the decrease in the
combined  ratio and the  increase  in net  investment  income  discussed  above.
Earnings  before income  taxes,  excluding  net realized  gains on  investments,
decreased  $273  million  in 1999,  primarily  attributable  to the  significant
increase  in  the  combined  ratio,  partially  offset  by the  increase  in net
investment income discussed above.


                                       15


<PAGE>
International Property and Casualty Business

<TABLE>
<CAPTION>
                                                     Year ended December 31,
                                                 -------------------------------
(In millions)                                     2000        1999        1998
                                                 -------------------------------
<S>                                                <C>         <C>         <C>

Net premiums written............................ $2,754      $2,513      $2,389
Net underwriting loss...........................   (509)       (238)        (31)
Net investment income...........................    347         340         286
Earnings before income taxes....................    117         211         312
Net realized gains on investments...............    297         101          87
Earnings before income taxes, excluding
   net realized gains on investments............   (180)        110         225
GAAP ratios (1):
   GAAP claims and claim expense ratio..........  91.6%        76.3%       70.5%
   GAAP underwriting expense ratio..............  26.4%        33.6%       30.9%
                                                 ------       -----       -----
   GAAP combined ratio.......................... 118.0%       109.9%      101.4%
                                                 ======       =====       =====
</TABLE>

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


Net  premiums  written  increased  $241  million  or  10%  in  2000,   primarily
attributable to the combination of hardening pricing within the overall property
and  casualty  insurance/reinsurance  industry  and the impact of a full year of
operating  activity  for the  March  1999  acquisition  of Eagle  Star Re.  This
increase  was  somewhat  offset by the 2000  decision to exit  certain  lines of
business  and  customer  relationships  as part of a  reunderwriting  initiative
undertaken during the year. Net premiums written increased $124 million or 5% in
1999, primarily  attributable to the acquisitions of Eagle Star Re and GE Re and
core growth in various  product lines.  Premium growth in both 2000 and 1999 was
also  partially  offset by an increase in  contingently  payable ceded  premiums
relating to recorded recoveries under aggregate excess retrocession programs and
the impact of foreign currency  translation in connection with the strengthening
of the U.S. dollar compared to most major European currencies.

Consistent with experience in the domestic property and casualty  business,  the
relatively high combined  ratios in 2000 and 1999 primarily  reflect the effects
of  continued  insufficient  pricing  within the overall  property  and casualty
insurance/reinsurance  industry and adverse  development  on prior year recorded
losses.  The  increase  in the  combined  ratio in 2000  includes  the impact of
significant  adverse   development   relating  to  certain  European  windstorms
occurring late in 1999. The 1999 combined ratio was also adversely impacted by a
heightened  frequency and severity of large loss events  occurring in that year.

Net investment income increased $7 million or 2% in 2000, primarily attributable
to the repositioning of the investment  portfolio to include a higher proportion
of fixed maturity securities. Net investment income increased $54 million or 19%
in 1999, primarily attributable to the acquisitions of GE Re and Eagle Star Re.

Earnings  before income  taxes,  excluding  net realized  gains on  investments,
decreased  $290  million  in 2000,  primarily  attributable  to the  significant
increase in the combined ratio  discussed  above.  Earnings before income taxes,
excluding net realized  gains on  investments,  decreased $115 million or 51% in
1999, primarily  attributable to the significant increase in the combined ratio,
partially offset by the increase in net investment income discussed above.


                                       16


<PAGE>
Life Reinsurance Business

<TABLE>
<CAPTION>
                                                       Year ended December 31,
                                                      --------------------------
(In millions)                                           2000     1999     1998
                                                      --------------------------
<S>                                                     <C>        <C>      <C>

Revenues.............................................  $2,207   $1,789   $1,525
Earnings before income taxes.........................     238      244      157
</TABLE>

Revenues,  which consist of net premiums  earned,  net  investment  income,  net
realized gains on investments and other revenues,  including fees generated from
investment-related   life   reinsurance   products  and  financial   reinsurance
transactions, increased $418 million or 23% in 2000. This increase was primarily
attributable to growth in the domestic traditional life and credit life business
and an increase in net realized gains on  investments.  Revenues  increased $264
million  or 17% in  1999,  primarily  attributable  to  growth  in the  domestic
traditional life and credit life business,  an increase in net realized gains on
investments and fees generated from investment-related life reinsurance products
and financial reinsurance transactions.

Earnings before income taxes decreased $6 million or 2% in 2000, including a $15
million  increase in net realized gains on  investments.  Excluding net realized
gains on investments,  earnings before income taxes decreased $21 million or 13%
in 2000,  primarily  attributable to an increase in claims experience.  Earnings
before  income  taxes  increased  $87  million or 55% in 1999,  including  a $48
million  increase in net realized gains on  investments.  Excluding net realized
gains on investments,  earnings before income taxes increased $39 million or 32%
in  1999,  primarily  attributable  to an  increase  in net  investment  income,
primarily  due to  continued  growth  in the  investment  portfolios,  and  fees
generated  from  investment-related  life  reinsurance  products  and  financial
reinsurance transactions.


Liquidity and Capital Resources

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

Cash flows from  operating  activities,  which  primarily  consists  of premiums
collected  during the period and  payments  made for claims and claim  expenses,
decreased  $1,030  million in 2000,  primarily as a result of an  escalation  in
claim-related  payments  attributable  to higher  levels of incurred  claims and
claim expenses in recent years. Cash flows from operating  activities  increased
$578 million in 1999, primarily  attributable to a decrease in claim settlements
relative  to the  collection  of  premiums,  somewhat  offset by an  increase in
reinsurance  recoverables  under the  Company's  aggregate  excess  retrocession
programs.

Cash flows from investing  activities  increased $447 million in 2000, primarily
attributable  to a net decrease in the purchases of  investment  securities as a
result of the decrease in operating cash flows discussed above.  Cash flows from
investing activities increased $374 million in 1999, primarily attributable to a
reduction in cash used to fund acquisitions in 1999 due to the 1998 acquisitions
of  Medical  Protective  and GE Re,  somewhat  offset by a net  increase  in the
purchases of investment securities.

Cash flows from financing  activities  increased $520 million in 2000, primarily
attributable to the following factors: (1) an increase in short-term borrowings,
(2) a  reduction  in  dividends  paid on  common  stock and (3) an  increase  in
contract  deposit  liabilities  resulting  from growth in financial  reinsurance
business volumes. The $691 million of proceeds from long-term borrowings in 2000
were  substantially  all used to repay  outstanding  borrowings under an interim
loan  agreement  with GE Capital  Corporation  used to fund the  Company's  1998
acquisition  of  Medical  Protective.   Cash  flows  from  financing  activities
decreased $733 million in 1999,  primarily  attributable  to the large amount of
1998 proceeds from short-term  borrowings  associated  with the  acquisitions of
Medical  Protective  and GE Re and the change in  contract  deposit  liabilities
resulting  from the 1998  commutation  of a  significant  financial  reinsurance
treaty. The $395 million of proceeds from long-term borrowings in 1999 were used
largely  to  repay  short-term  borrowings  made in  1998  under  the  Company's
revolving credit agreement with GE Capital Services.


                                       17


<PAGE>

The Company has a one-year  $600  million  revolving  credit  agreement  with GE
Capital Services which enables the Company to borrow from GE Capital Services at
an interest rate per annum equal to GE Capital Services' cost of funds for a one
year period. The agreement is automatically extended for successive terms of one
year each unless terminated in accordance with terms of the agreement.


Investments

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

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

On a worldwide basis, based on data as of December 31, 2000, the Company manages
75% of its  investments  internally.  General  Electric  Investment  Corporation
manages  an  additional  9% of the  Company's  investments,  and the  balance is
managed by unaffiliated outside managers.

The Company's investment results are summarized as follows:

<TABLE>
<CAPTION>
                                                             Year ended December 31,
                                               ---------------------------------------------------
(In millions)                                    2000       1999       1998       1997      1996
                                               ---------------------------------------------------
<S>                                               <C>        <C>        <C>       <C>        <C>

Average invested assets (at cost)............. $21,197    $20,940    $18,794    $16,417   $15,195
Net investment income.........................   1,315      1,151        985        910       837
Net effective yield...........................     6.2%       5.5%       5.2%       5.5%      5.5%
Net realized gains on investments............. $   522    $   699    $   432    $   303   $   223
Unrealized gains on investment
   securities before deferred income taxes....     244         92      1,554      1,189       799
</TABLE>

The increase in unrealized gains on investment securities before deferred income
taxes in 2000 is  primarily  due to the  concentration  of fixed  maturity  debt
securities  held in the  investment  portfolio  and  the  effects  of a  general
decrease in interest rates which occurred in late 2000.

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.


                                       18


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

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

<TABLE>
<CAPTION>
                                                      Domestic Property
                                                        and Casualty          Domestic Life
                                                      ---------------------------------------
                                                                     December 31,
                                                      ---------------------------------------
                                                       2000       1999       2000       1999
                                                      ---------------------------------------
<S>                                                    <C>        <C>        <C>        <C>

U.S. government and government agency securities.....   0.5%       0.9%       2.6%       7.4%
Aaa..................................................  45.2       44.0        1.7        1.6
Aa...................................................  29.4       31.1        9.0        6.2
A....................................................  10.8        9.7       27.9       21.8
Baa..................................................   1.5        1.2       13.1       12.9
Ba...................................................   0.5        0.4        0.8        1.5
Canadian securities..................................   3.6        4.0        7.2        4.8
Mortgage-backed and other asset-backed securities....   6.7        4.3       36.0       37.8
Other................................................   1.8        4.4        1.7        6.0
                                                      -----      -----      -----      -----
   Total............................................. 100.0%     100.0%     100.0%     100.0%
                                                      =====      =====      =====      =====
</TABLE>

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

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

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

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


                                       19


<PAGE>
As of  December  31,  2000,  the  fair  value  of the  GE  Frankona  Re  Group's
investments totaled $6,740 million, a decrease of $750 million from December 31,
1999.  The  composition  of GE Frankona Re Group's  investments is summarized as
follows:

<TABLE>
<CAPTION>
                                                                  December 31,
                                                               -----------------
                                                                2000       1999
                                                               -----------------
            <S>                                                 <C>        <C>

            Fixed maturity securities.........................  89.5%      81.8%
            Equity securities.................................   7.5       15.8%
            Other invested assets.............................   3.0        2.4%
                                                               -----      -----

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

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


Interest Rate and Currency Risk Management

Interest  rate  and  currency  risk  management  is  important  in  the   normal
operations of the Company. The following discussion presents an overview of such
management.

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

The Company uses various  financial  instruments,  such as cross currency swaps,
options and currency forwards, principally to manage currency risks. The Company
is exclusively an end-user of these instruments,  which are commonly referred to
as derivatives.  The Company does not engage in trading,  market-making or other
speculative  activities in the  derivatives  markets.  Management  requires that
derivative financial  instruments relate to specific asset,  liability or equity
transactions or to currency  exposures.  More detailed  information  about these
financial instruments,  as well as the strategies and policies for their use, is
provided in Notes 2 and 14 to the consolidated financial statements.

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

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

                                       20


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

     One  means  of   assessing   exposure  to  interest   rate   changes  is  a
     duration-based  analysis that  measures the potential  loss in net earnings
     resulting  from a  hypothetical  decrease  in  interest  rates of 100 basis
     points across all maturities (sometimes referred to as a "parallel shift in
     the yield  curve").  Under  this  model,  it is  estimated  that,  all else
     constant,  such a decrease,  including  repricing effects in the securities
     portfolio,  would  reduce the 2001 net  earnings  of the  Company  based on
     year-end 2000 positions by an insignificant  amount.  Based on positions at
     year-end 1999, the pro forma effect on 2000 net earnings of such a decrease
     in interest rates was also estimated to be an insignificant amount.

     One means of assessing exposure to changes in currency exchange rates is to
     model effects on reported earnings using a sensitivity  analysis.  Year-end
     2000  consolidated  currency  exposures,  including  financial  instruments
     designated  and  effective  as hedges,  were  analyzed to identify  Company
     assets and liabilities  denominated in other than their relevant functional
     currency.  Net unhedged  exposures in each  currency  were then  remeasured
     assuming  a  10  percent  decrease  (substantially  greater  decreases  for
     hyperinflationary  currencies) in currency exchange rates compared with the
     U.S.  dollar.  Under this model,  it is estimated  that, all else constant,
     such a decrease would reduce the 2001 net earnings of the Company based  on
     year-end 2000 positions by an insignificant amount.

Cyclicality

The  property  and  casualty  reinsurance  industry  has been  highly  cyclical.
Underwriting  results of primary property and casualty  insurance  companies and
prevailing  general  economic  and  reinsurance   premium  rates   significantly
influences  demand for reinsurance.  The cyclical trends in the industry and the
industry's  profitability  can also be affected  significantly  by volatile  and
unpredictable developments, including changes in what the Company believes to be
the  propensity  of courts to grant large  awards,  natural  disasters and other
catastrophic  events (such as hurricanes,  windstorms,  earthquakes,  floods 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.



                                       21


<PAGE>
New Accounting Standards

The Financial  Accounting Standards Board ("FASB") has issued, then subsequently
amended,   Statement  of  Financial   Accounting  Standards  ("SFAS")  No.  133,
Accounting for Derivative Instruments and Hedging Activities,  effective for the
Company on January 1, 2001. Upon adoption, all derivative instruments (including
certain derivative  instruments  embedded in other contracts) will be recognized
in the balance  sheet at their fair values;  changes in such fair values must be
recognized  immediately in earnings  unless specific  hedging  criteria are met.
Effects of qualifying  changes in fair value will be recorded in equity  pending
recognition in earnings as offsets to the related earnings effects of the hedged
items.  Management  estimates  that,  at  January 1,  2001,  the  effects on its
consolidated  financial statements of adopting SFAS No. 133, as amended, will be
a one-time  reduction  of net  earnings  of less than $20  million.  The precise
transition  effect is uncertain  because the accounting for certain  derivatives
and hedging  relationships in accordance with SFAS No. 133 is subject to further
interpretation by the FASB.


Effects of Inflation

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


Item 7A.  Quantitative and Qualitative Disclosures About Market Risk.

Information  about  potential  effects of changes in interest rates and currency
exchange on the Company is discussed on pages 20-21.


Item 8.  Financial Statements and Supplementary Data.

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


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

Not applicable




                                       22


<PAGE>

                                    PART III


Item 10.  Directors and Executive Officers of the Registrant.

Omitted


Item 11.  Executive Compensation.

Omitted


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

Omitted


Item 13.  Certain Relationships and Related Transactions.

Omitted


                                     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 25).

   (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 25).

   (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, 2000 (material
                  omitted and separately filed  with the Securities and Exchange
                  Commission pursuant to a request for  confidential treatment).






                                       23


<PAGE>
           10.2   Second Whole  Account  Aggregate  Excess of Loss  Retrocession
                  Agreement (E2), between Employers Reinsurance  Corporation and
                  Centre  Insurance  Company,  dated  January 1, 2000  (material
                  omitted and separately filed  with the Securities and Exchange
                  Commission pursuant to a request for  confidential treatment).

           10.3   Second Whole  Account  Aggregate  Excess of Loss  Retrocession
                  Agreement (E2), between Employers Reinsurance  Corporation and
                  National Union Fire Insurance Company of Pittsburgh, PA, dated
                  January 1, 2000  (material omitted  and separately filed  with
                  the Securities and  Exchange Commission  pursuant to a request
                  for confidential treatment).

           10.4   Second  Whole  Account Aggregate  Excess of Loss  Retrocession
                  Agreement (E2), between Employers Reinsurance Corporation  and
                  Federal Insurance  Company,  dated  January 1,  2000 (material
                  omitted and separately filed  with the Securities and Exchange
                  Commission pursuant to a request for  confidential treatment).

           12     Computation of ratio of earnings to fixed charges.



   (b)     Reports on Form 8-K.

           None.

                                      24


<PAGE>
                                   ITEM 14(a)

                     GE Global Insurance Holding Corporation
                                and Subsidiaries

                                    Index to
                        Consolidated Financial Statements
                                       and
                          Financial Statement Schedules


                                                                            Page
                                                                            ----

Consolidated Financial Statements
   Independent Auditors' Report..............................................26
   Consolidated Statement of Earnings........................................27
   Consolidated Statement of Financial Position..............................28
   Consolidated Statement of Stockholder's Equity............................30
   Consolidated Statement of Cash Flows......................................31
   Notes to Consolidated Financial Statements................................32

Financial Statement Schedules
   Schedule II - Condensed Financial Information of Registrant...............56
   Schedule III - Supplementary Insurance Information........................60


                                       25


<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,
2000  and  1999,   and  the  related   consolidated   statements   of  earnings,
stockholder's  equity  and cash  flows for each of the  years in the  three-year
period ended December 31, 2000. Our audits also included the financial statement
schedules listed in the Index at Item 14(a) as of December 31, 2000 and 1999 and
for each of the years in the three-year  period ended  December 31, 2000.  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 auditing standards generally accepted
in the  United  States of  America.  Those  standards  require  that we plan and
perform the audit to obtain  reasonable  assurance  about  whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly,  in all material  respects,  the consolidated  financial  position of GE
Global  Insurance  Holding  Corporation and subsidiaries as of December 31, 2000
and 1999,  and the results of their  operations and their cash flows for each of
the years in the three-year  period ended December 31, 2000, in conformity  with
accounting principles generally accepted in the United States of America.  Also,
in our opinion,  the related financial statement  schedules,  when considered in
relation  to the  basic  consolidated  financial  statements  taken  as a whole,
present fairly, in all material respects, the information set forth therein.


                                                                        KPMG LLP


Kansas City, Missouri
January 22, 2001


                                       26


<PAGE>
<TABLE>
<CAPTION>
                     GE GLOBAL INSURANCE HOLDING CORPORATION
                                AND SUBSIDIARIES

                       Consolidated Statement of Earnings


                                                         Year ended December 31,
                                                      ------------------------------
(In millions)                                          2000        1999        1998
                                                      ------------------------------
<S>                                                     <C>         <C>         <C>

Revenues
Net premiums written                                  $8,191      $7,147      $5,984
                                                      ======      ======      ======

Net premiums earned                                   $8,001      $6,896      $5,635
Net investment income                                  1,315       1,151         985
Net realized gains on investments                        522         699         432
Other revenues                                           293         285         151
                                                      ------      ------      ------
Total revenues                                        10,131       9,031       7,203
                                                      ------      ------      ------

Costs and Expenses
Claims, claim expenses and policy benefits             6,727       5,385       4,103
Insurance acquisition costs                            1,913       1,839       1,357
Amortization of intangibles                              143         111          89
Interest expense                                         126         102          55
Other operating costs and expenses                       529         518         444
Minority interest in net earnings of consolidated
   subsidiaries                                           88          88          85
                                                      ------      ------      ------
Total costs and expenses                               9,526       8,043       6,133
                                                      ------      ------      ------

Earnings before income taxes                             605         988       1,070
                                                      ------      ------      ------

Provision for income taxes:
   Current                                              (109)        216         324
   Deferred                                              133          52         (33)
                                                      ------      ------      ------
                                                          24         268         291
                                                      ------      ------      ------

Net earnings                                          $  581      $  720      $  779
                                                      ======      ======      ======
</TABLE>


See Notes to Consolidated Financial Statements.


                                       27


<PAGE>
<TABLE>
<CAPTION>
                     GE GLOBAL INSURANCE HOLDING CORPORATION
                                AND SUBSIDIARIES

                  Consolidated Statement of Financial Position


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

Assets
Investments:
   Fixed maturity securities available-for-sale, at fair value      $18,761      $17,268
   Equity securities, at fair value                                     718        3,104
   Short-term investments, at amortized cost                          1,348          788
   Other invested assets                                                364          379
                                                                    -------      -------
   Total investments                                                 21,191       21,539

Cash                                                                    196          359

Securities and indebtedness of related parties                          676          299

Accrued investment income                                               407          419

Premiums receivable                                                   3,844        3,580

Funds held by reinsured companies                                       740          717

Reinsurance recoverables                                              6,436        6,029

Deferred insurance acquisition costs                                  1,494        1,418

Intangible assets                                                     1,640        1,516

Other assets                                                          1,940        1,685
                                                                    -------      -------

Total assets                                                        $38,564      $37,561
                                                                    =======      =======
</TABLE>


                                       28


<PAGE>
<TABLE>
<CAPTION>







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

Liabilities and equity
Claims and claim expenses                                           $17,678      $18,134
Accumulated contract values                                           2,161        2,164
Future policy benefits for life and health contracts                  2,636        2,230
Unearned premiums                                                     2,584        2,534
Other reinsurance balances                                            2,062        1,874
Income taxes payable                                                     11          136
Contract deposit liabilities                                          1,169        1,223
Other liabilities                                                       840          756
Deferred income taxes                                                    31           21
Long-term borrowings                                                  1,654          956
Indebtedness to related parties                                         536          779
                                                                    -------      -------
   Total liabilities                                                 31,362       30,807
                                                                    -------      -------

Minority interest in equity of consolidated
   subsidiaries                                                       1,177        1,179
                                                                    -------      -------

Preferred stock, $100,000 par value; authorized,
   issued and outstanding - 1,500 shares                                150          150
Common stock, $5,000 par value; authorized,
   issued and outstanding - 1,000 shares                                  5            5
Paid-in capital                                                         845          845
Retained earnings                                                     5,204        4,630
Accumulated unrealized gains on investment securities - net (a)         143           51
Accumulated foreign currency translation adjustments (a)               (322)        (106)
                                                                    -------      -------
   Total stockholder's equity                                         6,025        5,575
                                                                    -------      -------

Total liabilities and equity                                        $38,564      $37,561
                                                                    =======      =======
</TABLE>

(a)  The sum of  accumulated  unrealized  gains  on  investment  securities  and
     accumulated   foreign   currency   translation    adjustments   constitutes
     "Accumulated  nonowner  changes  other  than  earnings,"  as  shown  in the
     Consolidated Statement of Stockholder's Equity, and was $(179) million  and
     $(55) million at year-end 2000 and 1999, respectively.


See Notes to Consolidated Financial Statements.


                                       29


<PAGE>
<TABLE>
<CAPTION>
                     GE GLOBAL INSURANCE HOLDING CORPORATION
                                AND SUBSIDIARIES

                 Consolidated Statement of Stockholder's Equity



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

Balances, January 1, 1998                                           $150       $5      $845     $3,660        $714       $5,374
                                                                                                                         ------
   Changes other than transactions with share owner:
      Net earnings                                                     -        -         -        779           -          779
      Net unrealized gains on investment securities (a)                -        -         -          -         454          454
      Foreign currency translation adjustments (b)                     -        -         -          -         (41)         (41)
      Reclassification adjustments (c)                                 -        -         -          -        (268)        (268)
                                                                                                                         ------
      Total changes other than transactions with share owner                                                                924
                                                                                                                         ------

   Dividends paid on preferred stock                                   -        -         -         (8)          -           (8)
   Dividends paid on common stock                                      -        -         -       (270)          -         (270)
                                                                    ----       --      ----     ------        ----        -----

Balances, December 31, 1998                                          150        5       845      4,161         859        6,020
                                                                                                                         ------
   Changes other than transactions with share owner:
      Net earnings                                                     -        -         -        720           -          720
      Net unrealized losses on investment securities (a)               -        -         -          -        (408)        (408)
      Foreign currency translation adjustments (b)                     -        -         -          -         (33)         (33)
      Reclassification adjustments (c)                                 -        -         -          -        (473)        (473)
                                                                                                                         ------
      Total changes other than transactions with share owner                                                               (194)
                                                                                                                         ------

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

Balances, December 31, 1999                                          150        5       845      4,630         (55)       5,575
                                                                                                                         ------
   Changes other than transactions with share owner:
      Net earnings                                                     -        -         -        581           -          581
      Net unrealized losses on investment securities (a)               -        -         -          -        (234)        (234)
      Foreign currency translation adjustments (b)                     -        -         -          -        (216)        (216)
      Reclassification adjustments (c)                                 -        -         -          -         326          326
                                                                                                                         ------
      Total changes other than transactions with share owner                                                                457
                                                                                                                         ------

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

Balances, December 31, 2000                                         $150       $5      $845     $5,204       $(179)      $6,025
                                                                    ====       ==      ====     ======       =====       ======
</TABLE>

(a)  Presented  net of taxes of $163 million, $233 million and $(305) million in
     2000, 1999 and 1998, respectively.

(b)  Presented  net  of  taxes of $113 million, $17 million  and $20  million in
     2000, 1999 and 1998, respectively.

(c)  Presented  net of taxes of $(169) million, $274  million  and $164  million
     in 2000,  1999 and 1998,  respectively.  (Note: In addition to net realized
     gains  on  investment  securities,   the  2000  and  1999  reclassification
     adjustments include $27 million and $48 million,  respectively,  in pre-tax
     gains  related  to  available-for-sale  investment  securities  held  by an
     investee  accounted for under the equity method;  these gains were included
     in other revenues in the accompanying consolidated statement of earnings.)




See Notes to Consolidated Financial Statements.


                                       30


<PAGE>
<TABLE>
<CAPTION>
                     GE GLOBAL INSURANCE HOLDING CORPORATION
                                AND SUBSIDIARIES

                      Consolidated Statement of Cash Flows

                                                                     Year ended December 31,
                                                               ----------------------------------
(In millions)                                                    2000         1999         1998
                                                               ----------------------------------
<S>                                                               <C>          <C>          <C>

Cash Flows From Operating Activities
Net earnings                                                   $   581      $   720      $   779
Adjustments to reconcile net earnings to cash
   from (used for) operating activities:
      Claims and claim expenses                                  1,084        1,574          732
      Future policy benefits for life and health contracts         589          182          161
      Unearned premiums                                            207          400          245
      Funds held by reinsured companies                           (103)           5         (118)
      Reinsurance recoverables                                  (1,579)      (1,409)        (689)
      Deferred income taxes                                        133           52          (33)
      Income taxes payable (receivable)                           (120)          10         (116)
      Amortization of insurance acquisition costs                1,913        1,839        1,357
      Insurance acquisition costs deferred                      (2,200)      (1,915)      (1,606)
      Net realized gains on investments                           (522)        (699)        (432)
      Other, net                                                  (124)         130           31
                                                               -------      -------      -------
   Cash from (used for) operating activities                      (141)         889          311
                                                               -------      -------      -------

Cash Flows From Investing Activities
Fixed maturity securities available-for-sale:
   Purchases                                                    (9,823)      (7,995)      (4,788)
   Sales                                                         7,235        6,399        3,963
   Maturities                                                      940        1,566          843
Equity securities:
   Purchases                                                    (1,175)      (2,812)      (1,331)
   Sales                                                         3,522        2,812        1,602
Net (purchases) sales of short-term investments                   (560)        (216)         236
Net cash paid for acquisitions and in-force reinsurance
   transactions                                                      -         (258)      (1,018)
Net cash received from dispositions                                  -           88            -
Other investing activities                                          28          136         (161)
                                                               -------      -------      -------
   Cash from (used for) investing activities                       167         (280)        (654)
                                                               -------      -------      -------

Cash Flows From Financing Activities
Change in contract deposits                                         38         (171)        (362)
Net contract accumulation payments                                   6          (87)         (42)
Proceeds from short-term borrowings                                105          132        1,061
Principal payments on short-term borrowings                       (721)        (426)         (54)
Proceeds from long-term borrowings                                 691          395            -
Dividends paid                                                      (7)        (251)        (278)
                                                               -------      -------      -------
   Cash from (used for) financing activities                       112         (408)         325
                                                               -------      -------      -------

Effect of exchange rate changes on cash                           (301)        (100)           7
                                                               -------      -------      -------

Increase (decrease) in cash                                       (163)         101          (11)
Cash at beginning of year                                          359          258          269
                                                               -------      -------      -------
Cash at end of year                                            $   196      $   359      $   258
                                                               =======      =======      =======
</TABLE>


See Notes to Consolidated Financial Statements.


                                       31


<PAGE>
                     GE GLOBAL INSURANCE HOLDING CORPORATION
                                AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements


1.  Basis of Presentation

Principles of Consolidation


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

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


Basis of Accounting

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


2.  Summary of Significant Accounting Policies

Investments

The Company's fixed maturity  securities and substantially all marketable equity
securities have been designated as available-for-sale,  and are reported at fair
value with net unrealized gains or (losses)  included in  stockholder's  equity,
net of applicable taxes and certain other adjustments. Such reported fair values
are based  primarily  on quoted  market  prices,  or if  quoted  prices  are not
available, are valued by third party pricing vendors. 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
insurance/reinsurance  treaties or  policies.  In general,  earned  premiums are
calculated on a pro rata basis,  are determined  based on reports  received from
reinsureds or are estimated if reports are not received timely from  reinsureds.
Premium  adjustments  under  retrospectively  rated  reinsurance  contracts  are
recorded based on estimated  claims and claim expenses,  including both case and
incurred  but not yet  reported  liabilities.  Assumed  foreign  reinsurance  is
accounted for using the periodic method.




                                       32


<PAGE>
                     GE GLOBAL INSURANCE HOLDING CORPORATION
                                AND SUBSIDIARIES

             Notes to Consolidated Financial Statements (continued)


2.  Summary of Significant Accounting Policies (continued)

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  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 $823  million and  $887  million at  December  31, 2000  and 1999,
respectively,  of long-term  disability  claims that are discounted at a 6% rate
(See Note 12).

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


Life Reinsurance Segment

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

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

Future policy benefits for traditional life and health  contracts  represent the
present value of such benefits  based on mortality and other  assumptions  which
were  appropriate  at the  time  the  policies  were  issued  or at the  date of
purchase.  Interest  rate  assumptions  used in  calculating  the present  value
generally  ranged  from 3.00% to 8.50% at December  31, 2000 and 1999.  Interest
rates  credited  to  universal  life  contracts  and  investment  contracts  are
generally  guaranteed for a specified time period with renewal rates  determined
by management.  Such crediting  interest  rates  generally  ranged from 3.00% to
9.00% in 2000, 1999 and 1998.

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




                                       33


<PAGE>
                     GE GLOBAL INSURANCE HOLDING CORPORATION
                                AND SUBSIDIARIES

             Notes to Consolidated Financial Statements (continued)


2.  Summary of Significant Accounting Policies (continued)

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

Funds Held by Reinsured Companies

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


Allowance for Doubtful Accounts

The Company  establishes  an allowance for  uncollectible  premiums  receivable,
reinsurance  recoverables  and other  doubtful  receivables.  The  allowance  is
recorded as a  valuation  account  that  reduces the  corresponding  asset.  The
allowance  totaled $74  million  and $79 million at December  31, 2000 and 1999,
respectively.


Goodwill

The  Company  amortizes  goodwill  recorded  in  connection  with  its  business
combinations  over periods  ranging from 15 to 30 years using the  straight-line
method.  If goodwill is identified with long-lived assets that are subject to an
impairment  loss,  and an  adjustment  is to be made to reflect fair value,  the
goodwill  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 consolidated statement of financial
position,  and transactions as such are considered  investing  activities in the
consolidated statement of cash flows.


Reinsurance

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


Income Taxes

GE  Global   Insurance,   together  with  its  domestic  property  and  casualty
insurance/reinsurance  subsidiaries,  one domestic  life  insurance  subsidiary,
various  non-insurance  subsidiaries and its parent,  GE Capital  Services,  are
included in the consolidated  federal income tax return of GE Company. GE Global
Insurance's  other  domestic  life  insurance  subsidiary  is  taxed  as a  life
insurance  company,  and that  subsidiary  files a separate  federal  income tax
return.




                                       34


<PAGE>
                     GE GLOBAL INSURANCE HOLDING CORPORATION
                                AND SUBSIDIARIES

             Notes to Consolidated Financial Statements (continued)


2.  Summary of Significant Accounting Policies (continued)

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

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

Interest Rate and Currency Risk Management

Upon adoption of Statement of Financial Accounting Standards No. 133, Accounting
for Derivative  Instruments and Hedging Activities,  on January 1, 2001, certain
financial  instruments  and  portions  of other  financial  instruments  will be
defined to be derivatives.  After that date, all derivatives  will be carried at
their fair  values,  and all changes in fair values will affect net  earnings or
share owners' equity immediately.

As a matter of policy, the Company does not engage in any trading, market-making
or other  speculative  activities in the  derivative  markets.  The Company uses
various  financial  instruments,  such as  cross  currency  swaps,  options  and
currency  forwards  principally  to lessen its  exposure to movements in foreign
currency exchange rates.

Designated cross currency swaps and foreign currency forward purchase  contracts
that modify certain  assets are accounted for on an accrual  basis.  The Company
requires all other derivative  instruments,  such as options and forwards, to be
designated  and  accounted  for as hedges of  specific  assets,  liabilities  or
committed   transactions;   resulting   payments  and  receipts  are  recognized
contemporaneously  with  effects  of hedged  transactions.  A payment or receipt
arising  from early  termination  of an effective  hedge is accounted  for as an
adjustment to the basis of the hedged transaction.

Instruments  used as hedges must be effective  at reducing  the risk  associated
with  the  exposure  being  hedged  and  must be  designated  as a hedge  at the
inception  of the  contract.  Accordingly,  changes  in market  values of hedged
instruments  must  be  highly  correlated  with  changes  in  market  values  of
underlying hedged items, both at inception of the hedge and over the life of the
hedge  contract.  As a matter of  policy,  any  derivative  that is  either  not
designated as a hedge,  or is so  designated  but is  ineffective,  is marked to
market and recognized in operations immediately.

Foreign Currency Translation

The  Company  operates in a multiple  functional  currency  environment  whereby
revenues and expenses in functional  currencies  are  translated  using periodic
weighted average  exchange rates during the year and functional  currency assets
and  liabilities  are translated at the rates of exchange in effect at the close
of  the  year.  Gains  or  losses  resulting  from  translating  the  functional
currencies  into  U.S.  dollars  are  accumulated  in a  separate  component  of
stockholder's   equity,   entitled  "accumulated  foreign  currency  translation
adjustments." It is the Company's general policy to offset currency risk related
to insurance  claims and claim  expenses by  maintaining  investment  securities
matched to the major  currencies  represented in its recorded net  claim-related
liabilities. In addition, the Company partially hedges its foreign currency risk
on its foreign  subsidiary  investments  by utilizing a cross  currency swap and
foreign currency forward  purchase  contracts (See Note 14). As a result,  while
foreign currency may have significantly  impacted  individual asset,  liability,
revenue and expense categories,  the net effect of foreign currency transactions
on operating results during 2000, 1999 and 1998 was immaterial.


                                       35


<PAGE>
                     GE GLOBAL INSURANCE HOLDING CORPORATION
                                AND SUBSIDIARIES

             Notes to Consolidated Financial Statements (continued)


2.  Summary of Significant Accounting Policies (continued)

Benefit Plans

Prior  to  September  30,  1999,  employees  of the  Company  and  its  domestic
subsidiaries were covered by trusteed,  noncontributory  defined benefit pension
plans and unfunded  postretirement plans that provided medical benefits and life
insurance   benefits  to  substantially  all  employees  and  their  dependents.
Effective  October 1, 1999,  the majority of the  Company's  domestic  employees
began  participating  in a trusteed,  contributory  defined benefit pension plan
sponsored by the Company's ultimate parent, GE Company. Additionally,  effective
September 30, 1999,  the Company  terminated  substantially  all of its domestic
postretirement  plans, with covered employees  becoming  participants in similar
plans sponsored by GE Company. The existing accumulated  postretirement  benefit
obligations under the terminated plans were also transferred to GE Company, with
no gain or loss resulting from this transaction. GE Company charges the Company,
in turn,  for its  relative  share of the costs  associated  with the overall GE
Company  Group  Pension  and  Postretirement  Plans.  Certain  of the  Company's
international  subsidiaries also sponsor noncontributory defined benefit pension
plans for  their  employees.  The  net  effect  of  all  benefit  plans  on  the
consolidated statement of financial position and statement of earnings for 2000,
1999 and 1998 was immaterial.

Reclassifications

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


3.  Acquisitions and Dispositions

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

On October 27, 1998, the Company completed the acquisition of Kemper Reinsurance
Company (subsequently  renamed GE Reinsurance  Corporation - "GE Re") for a cash
consideration  of  approximately  $468  million.   The  cash  consideration  was
initially   financed  by  utilizing   existing  unused  credit   facilities  and
subsequently  refinanced in 1999 through  additional  long-term  borrowings (See
Note 9). GE Re is a property and casualty  reinsurance company principally doing
business  through  intermediaries.  The  acquisition has been accounted for as a
purchase;  accordingly, the operating results of GE Re have been included in the
Company's consolidated financial statements since the date of acquisition.

On October 15, 1998, the Company completed the acquisition of Medical Protective
Corporation  ("Medical  Protective")  for a cash  consideration of approximately
$628  million.  The cash  consideration  was  initially  financed  by GE Capital
Corporation  via an interim loan agreement and  subsequently  refinanced in 2000
through additional  long-term borrowings (See Note 9). Medical Protective is the
oldest medical professional  liability insurer of physicians and dentists in the
United  States.   The   acquisition  has  been  accounted  for  as  a  purchase;
accordingly,  the operating results of Medical  Protective have been included in
the Company's consolidated financial statements since the date of acquisition.




                                       36


<PAGE>
                     GE GLOBAL INSURANCE HOLDING CORPORATION
                                AND SUBSIDIARIES

             Notes to Consolidated Financial Statements (continued)


3.  Acquisitions and Dispositions (continued)

On January 6, 1998,  the  Company  purchased  the assets and assumed the renewal
rights  of  Industrial  Risk  Insurers  ("IRI"),  a leader in  providing  highly
protected risk property  insurance,  for a cash  consideration  of approximately
$235 million.  IRI writes  business  utilizing  the  licensing  authority of its
members and the business  underwritten is  subsequently  allocated to members in
proportion to membership  participation.  The acquisition has been accounted for
as a purchase;  accordingly,  the operating results of IRI have been included in
the Company's consolidated financial statements since the date of acquisition.

The  allocations  of the  purchase  price for Medical  Protective  and GE Re are
summarized as follows:

<TABLE>
                                            Medical
(In millions)                              Protective       GE Re         Total
                                           ----------       -----         -----
<S>                                            <C>           <C>           <C>

Assets acquired, excluding goodwill          $1,612        $3,239        $4,851
Goodwill                                        178           276           454
Liabilities assumed                          (1,162)       (3,047)       (4,209)
                                             ------        ------        ------
Total purchase price                         $  628        $  468        $1,096
                                             ======        ======        ======
</TABLE>


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

                                       37


<PAGE>
                     GE GLOBAL INSURANCE HOLDING CORPORATION
                                AND SUBSIDIARIES

             Notes to Consolidated Financial Statements (continued)


4.  Investments

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

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

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


<TABLE>
<CAPTION>
                                                                              December 31, 1999
                                                            -----------------------------------------------------
                                                                            Gross          Gross        Estimated
                                                            Amortized     Unrealized     Unrealized       Fair
(In millions)                                                 Cost          Gains          Losses         Value
                                                            -----------------------------------------------------
<S>                                                             <C>           <C>           <C>             <C>

Fixed maturity securities:
   U.S. government                                           $   842          $  1         $ (28)        $   815
   International government                                    2,432            92           (61)          2,463
   Tax-exempt                                                  6,392            94          (196)          6,290
   Corporate                                                   5,484            55          (215)          5,324
   U.S. mortgage-backed and other asset-backed                 1,642             5           (49)          1,598
   International mortgage-backed and other asset-backed          772            17           (11)            778
                                                             -------          ----         -----         -------
   Total fixed maturity securities                            17,564           264          (560)         17,268
Equity securities                                              2,745           521          (162)          3,104
Short-term investments                                           788             -             -             788
Other invested assets                                            350            29             -             379
                                                             -------          ----         -----         -------
Total investments                                            $21,447          $814         $(722)        $21,539
                                                             =======          ====         =====         =======
</TABLE>


                                       38


<PAGE>
                     GE GLOBAL INSURANCE HOLDING CORPORATION
                                AND SUBSIDIARIES

             Notes to Consolidated Financial Statements (continued)


4.  Investments (continued)

The amortized  cost and  estimated  fair value of fixed  maturity  securities at
December 31, 2000 are summarized, by stated maturity, as follows:

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

 Maturity:
    Due in 2001                                           $   642       $   643
    Due in 2002-2005                                        3,332         3,359
    Due in 2006-2010                                        4,942         4,923
    Due after 2010                                          6,959         7,139
                                                          -------       -------
                                                           15,875        16,064
 Mortgage-backed and other asset-backed securities          2,671         2,697
                                                          -------       -------
 Total fixed maturity securities                          $18,546       $18,761
                                                          =======       =======
</TABLE>

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

Major categories of investment income are summarized as follows:

<TABLE>
<CAPTION>
                                                        Year ended December 31,
                                                     -----------------------------
 (In millions)                                          2000      1999      1998
                                                     -----------------------------
 <S>                                                   <C>       <C>       <C>

 Gross investment income:
    Fixed maturity securities                         $1,081    $  997      $853
    Equity securities                                     82        58        59
    Short-term investments                                66        45        32
    Securities and indebtedness of related parties        22        21        19
    Other                                                 79        47        33
                                                      ------      ----      ----
                                                       1,330     1,168       996
 Investment expenses                                     (15)      (17)      (11)
                                                      ------    ------      ----
 Net investment income                                $1,315    $1,151      $985
                                                      ======    ======      ====
</TABLE>


                                       39


<PAGE>
                     GE GLOBAL INSURANCE HOLDING CORPORATION
                                AND SUBSIDIARIES

             Notes to Consolidated Financial Statements (continued)


4.  Investments (continued)

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

<TABLE>
<CAPTION>
                                                                Year ended December 31,
                                                           --------------------------------
(In millions)                                                2000        1999        1998
                                                           --------------------------------
<S>                                                           <C>         <C>         <C>

Sales proceeds from investment securities                  $10,757      $9,211      $5,565
                                                           =======      ======      ======

Net realized gains on investments before income taxes:
   Fixed maturity securities:
      Gross realized gains                                    $194        $119        $124
      Gross realized losses                                    (87)        (87)        (15)
   Equity securities:
      Gross realized gains                                     696         734         412
      Gross realized losses                                   (281)        (67)        (89)
                                                              ----        ----        ----
   Total net realized gains before income taxes                522         699         432
Provision for income taxes                                    (178)       (255)       (164)
                                                              ----        ----        ----
Net realized gains on investments, after income taxes         $344        $444        $268
                                                              ====        ====        ====
</TABLE>

The change in net  unrealized  gains  (losses),  before income  taxes,  on fixed
maturity securities was $511 million, $(1,179) million and $225 million in 2000,
1999 and 1998,  respectively;  the  corresponding  amounts for equity securities
were $(330)  million,  $(209)  million  and $37 million in 2000,  1999 and 1998,
respectively; and the corresponding amounts for other invested assets were $(29)
million, $(74) million and $103 million in 2000, 1999 and 1998, respectively.

The Company had investments in fixed maturity  securities with a carrying amount
of $857 million and $768 million at December 31, 2000 and 1999, respectively, on
deposit with state and provincial  insurance  departments to satisfy  regulatory
requirements.


                                       40


<PAGE>
                     GE GLOBAL INSURANCE HOLDING CORPORATION
                                AND SUBSIDIARIES

             Notes to Consolidated Financial Statements (continued)


5.  Intangible Assets

The Company's intangible assets are summarized as follows:

<TABLE>
<CAPTION>
                                                                  December 31,
                                                                 ---------------
(In millions)                                                     2000      1999
                                                                 ---------------
<S>                                                                <C>      <C>

Goodwill                                                         $1,327   $1,266
Present value of future profits ("PVFP")                            200      107
Value of insurance in-force                                           -       26
Customer list                                                       113      117
                                                                 ------   ------
                                                                 $1,640   $1,516
                                                                 ======   ======
</TABLE>

The Company's  intangible  assets are shown net of accumulated  amortization  of
$568 million and $721 million at December 31, 2000 and 1999, respectively.

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

The Company's  intangible  asset other than goodwill and PVPF includes the value
of a customer  list  recorded  in  connection  with the  acquisition  of the IRI
business in 1998, which is being amortized using the straight-line method over a
20 year period.


                                       41


<PAGE>
                     GE GLOBAL INSURANCE HOLDING CORPORATION
                                AND SUBSIDIARIES

             Notes to Consolidated Financial Statements (continued)


6.  Claims and Claim Expenses

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

<TABLE>
<CAPTION>
                                                                   Year ended December 31,
                                                              ----------------------------------
(In millions)                                                   2000         1999         1998
                                                              ----------------------------------
<S>                                                              <C>          <C>          <C>

Balance at January 1 - gross                                  $18,134      $15,852      $10,961
Less reinsurance recoverables                                  (4,314)      (2,936)      (1,822)
                                                              -------      -------      -------
Balance at January 1 - net                                     13,820       12,916        9,139
                                                              -------      -------      -------

Claims and expenses incurred:
   Current year                                                 5,525        4,789        3,904
   Prior years                                                    934          340          (56)
                                                              -------      -------      -------
                                                                6,459        5,129        3,848
                                                              -------      -------      -------

Claims and expenses paid:
   Current year                                                (1,650)      (1,672)      (1,387)
   Prior years                                                 (5,290)      (2,997)      (2,309)
                                                              -------      -------      -------
                                                               (6,940)      (4,669)      (3,696)
                                                              -------      -------      -------

Claim reserves related to acquired companies (See Note 3)         279          793        3,470

Claim reserves related to disposed companies                        -         (202)           -

Foreign exchange and other                                       (864)        (147)         155
                                                              -------      -------      -------
Balance at December 31 - net                                   12,754       13,820       12,916
Add reinsurance recoverables                                    4,924        4,314        2,936
                                                              -------      -------      -------
Balance at December 31 - gross                                $17,678      $18,134      $15,852
                                                              =======      =======      =======
</TABLE>

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

The high level of claims and expenses  incurred related to prior years reflected
in the above table for 2000 is primarily  attributable to the combination of the
effects of  continued  insufficient  pricing  within the  overall  property  and
casualty   insurance/reinsurance   industry   and   the   insurance   industry's
undervaluing  the  initial  loss  estimates  for  certain  European   windstorms
occurring late in December 1999.  Based on the continued  escalation in reported
losses relative to associated premiums, it became more apparent during 2000 that
the level of general  price  erosion that  occurred in the primary  property and
casualty insurance  industry in recent years was significantly  greater than had
been previously  contemplated.  In response to this new  information,  it became
necessary  for the  Company to  increase  claim  reserves  to reflect the higher
ultimate  loss  projections  resulting  from  this  increasing  trend  of  claim
development on these more recent underwriting years. The increase in 1999 claims
and  expenses  incurred  related to prior years is  attributable  to higher than
normal  claim and  expense  development  across a number  of lines of  business,
including property coverages (which was most highly impacted by much higher than
expected  industry-wide  losses with  respect to Hurricane  Georges),  long-term
disability and communications/media liability.

                                       42


<PAGE>
                     GE GLOBAL INSURANCE HOLDING CORPORATION
                                AND SUBSIDIARIES

             Notes to Consolidated Financial Statements (continued)


6.  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 $829
million and $183 million,  respectively, at December 31, 2000. These amounts are
management's best estimate, based on currently available information,  of future
claim and claim expense  payments and recoveries that are expected to develop in
future  years.  The  Company  monitors  evolving  case  law  and its  effect  on
asbestos-related   illness  and  toxic  waste  cleanup  claims.   Changing  U.S.
government  regulations  and  legislation,  including  continuing  Congressional
consideration of a Federal  Superfund law, newly reported  claims,  new contract
interpretations  and other  factors  could  significantly  affect  future  claim
development. While the Company has recorded its best estimate of its liabilities
for  asbestos-related  illness and toxic waste cleanup claims based on currently
available  information,  it is possible that additional liabilities may arise in
the future.  It is not  possible to estimate  with any  certainty  the amount of
additional  net loss,  or the range of net loss,  that is  reasonably  possible;
therefore, there can be no assurance that future liabilities will not materially
affect the Company's results of operations, financial position or cash flows.


7.  Income Taxes

The Company's provision for income taxes is summarized as follows:

<TABLE>
<CAPTION>
                                                 Year ended December 31,
                  -------------------------------------------------------------------------------------
                            2000                          1999                          1998
                  -------------------------     -------------------------     -------------------------
                  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            $(73)    $ (36)   $(109)      $138      $ 78     $216       $210      $114     $324
Deferred            202       (69)     133         27        25       52        (93)       60      (33)
                   ----     -----     ----       ----      ----     ----       ----      ----     ----
Total              $129     $(105)   $  24       $165      $103     $268       $117      $174     $291
                   ====     =====    =====       ====      ====     ====       ====      ====     ====
</TABLE>

Income  taxes paid by the Company  totaled $22  million,  $244  million and $390
million in 2000, 1999 and 1998, respectively.




                                       43


<PAGE>
                     GE GLOBAL INSURANCE HOLDING CORPORATION
                                AND SUBSIDIARIES

             Notes to Consolidated Financial Statements (continued)


7.  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,
                                                       -------------------------
                                                       2000      1999      1998
                                                       -------------------------
<S>                                                    <C>       <C>       <C>

Corporate federal income tax rate                       35%       35%       35%
Tax-exempt investment income                           (20)      (12)      (10)
German restructuring resulting in step-up
   of tax basis                                        (12)        -         -
Increase in foreign tax credit capacity                 (4)        -         -
Intercompany dividend payment                            4         3         3
Other items, net                                         1         1        (1)
                                                         -        --        --
Effective tax rate                                       4%       27%       27%
                                                         =        ==        ==
</TABLE>

The  significant  adjustments  from the  prevailing 35% U.S.  corporate  federal
income tax rate, in arriving at the Company's effective tax rate,  include:  (1)
tax benefits  attributable to the Company  holding a significant  portion of its
overall  investment  portfolio in securities that are substantially  exempt from
U.S.  taxation  (principally  state and  municipal  bonds) and (2) tax  benefits
attributable to a step-up in the tax basis of certain assets  following the 2000
conversion of a corporate subsidiary to a partnership for German tax purposes.

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

<TABLE>
<CAPTION>
                                                                December 31,
                                                             -------------------
(In millions)                                                  2000       1999
                                                             -------------------
<S>                                                            <C>         <C>

Deferred tax assets:
   Claims and claim expenses                                   $206       $352
   Unearned premiums                                            169        123
   Foreign tax credit carryforwards                              20        130
   Foreign currency translation                                 199         81
   Contract deposit assets                                      113        118
   Other                                                        135        112
                                                               ----       ----
   Total gross deferred tax assets                              842        916
   Valuation allowance                                            -        (55)
                                                               ----       ----
   Total deferred tax assets                                    842        861
                                                               ----       ----

Deferred tax liabilities:
   Deferred insurance acquisition costs                         527        465
   Net unrealized gains on investment securities                 79         57
   Software                                                      45         35
   Contract deposit liabilities                                  41         92
   Other                                                        181        233
                                                               ----       ----
   Total deferred tax liabilities                               873        882
                                                               ----       ----
Net deferred tax liability                                     $(31)      $(21)
                                                               ====       ====
</TABLE>

The Company did not have a payable to (recoverable from) GE Capital Services for
income taxes due at December 31, 2000 or 1999.


                                       44


<PAGE>
                    GE GLOBAL INSURANCE HOLDING CORPORATION
                                AND SUBSIDIARIES

             Notes to Consolidated Financial Statements (continued)


8.  Indebtedness to/from Related Parties

The Company and GE Capital  Corporation are  participants in a revolving  credit
agreement that involves an international  cash pooling  arrangement on behalf of
certain European  affiliates of the Company.  In such roles,  either participant
may make short-term loans to the other as part of the cash pooling  arrangement.
Each such borrowing shall be repayable upon demand,  but not to exceed 364 days.
This unsecured line of credit has an interest rate per annum equal to GE Capital
Services'  cost of funds for the currency in which such borrowing is denominated
and is available  for an initial term of five years  expiring  October 21, 2002,
and shall be  automatically  extended  for  successive  terms of one year  each,
unless  terminated  in  accordance  with the terms of the  agreement.  The total
amount  drawn on this  credit  facility  by the  Company was $32 million and $53
million as of December 31, 2000 and 1999, respectively.

The Company has in place a revolving  credit  agreement with GE Capital Services
for an amount up to $600 million that expires  January 1, 2002, with an interest
rate per annum equal to GE Capital  Services'  cost of funds.  This agreement is
automatically  extended for successive terms of one year each, unless terminated
in accordance  with the terms of the  agreement.  The total amount drawn on this
credit facility,  including accrued interest  payable,  was $129 million and $42
million as of December 31, 2000 and 1999, respectively. Interest accrued on such
borrowings  at an annual  weighted-average  interest rate of 6.70% and 5.18% for
the years ended December 31, 2000 and 1999,  respectively.  No interest was paid
in 2000; total interest paid in 1999 was $9 million.

In October  1998,  the Company  entered into an interim loan  agreement  with GE
Capital  Corporation  for  $625  million  to fund  its  acquisition  of  Medical
Protective.  This interim loan agreement had an interest rate per annum equal to
GE Capital Corporation's cost of funds. The total balance outstanding under this
interim loan agreement,  including accrued interest payable, was $666 million as
of December 31, 1999,  which was repaid in 2000 using  proceeds  from  long-term
borrowings  (See  Note 9).  Interest  accrued  on such  borrowings  at an annual
weighted-average  interest rate of 6.16% and 5.26% for the years ended  December
31, 2000 and 1999,  respectively.  Total  interest  paid in 2000 was $62 million
with no interest paid in 1999.

9.  Borrowings

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

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

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

Total interest paid on borrowings  was $93 million,  $55 million and $42 million
in 2000, 1999 and 1998, respectively.

                                       45


<PAGE>
                     GE GLOBAL INSURANCE HOLDING CORPORATION
                                AND SUBSIDIARIES

             Notes to Consolidated Financial Statements (continued)


10.  Supplemental Financial Statement and Reinsurance Data

Insurance  premiums written and earned in 2000, 1999 and 1998 and life insurance
in-force as of December 31, 2000, 1999 and 1998 are summarized as follows:

<TABLE>
<CAPTION>
                                   Insurance Premiums Written
                               -----------------------------------
                               Property/
(In millions)                  Casualty        Life        Total
                               -----------------------------------
<S>                               <C>           <C>          <C>
2000:
   Direct                       $1,455        $    6       $1,461
   Assumed                       6,644         2,044        8,688
   Ceded                        (1,545)         (413)      (1,958)
                                ------        ------       ------
   Net                          $6,554        $1,637       $8,191
                                ======        ======       ======
1999:
   Direct                       $  999        $    5       $1,004
   Assumed                       6,373         1,525        7,898
   Ceded                        (1,489)         (266)      (1,755)
                                ------        ------       ------
   Net                          $5,883        $1,264       $7,147
                                ======        ======       ======

1998:
   Direct                       $  535        $    4       $  539
   Assumed                       5,300         1,314        6,614
   Ceded                          (947)         (222)      (1,169)
                                ------        ------       ------
   Net                          $4,888        $1,096       $5,984
                                ======        ======       ======


</TABLE>

<TABLE>
<CAPTION>
                                    Insurance Premiums Earned
                               -----------------------------------       Life
                               Property/                               Insurance
(In millions)                  Casualty        Life        Total       In-Force
                               -------------------------------------------------
<S>                               <C>           <C>          <C>           <C>
2000:
   Direct                       $1,228        $    6      $1,234       $  3,284
   Assumed                       6,753         2,025       8,778        583,279
   Ceded                        (1,604)         (407)     (2,011)      (174,206)
                                ------        ------      ------       --------
   Net                          $6,377        $1,624      $8,001       $412,357
                                ======        ======      ======       ========

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

1998:
   Direct                       $  509        $    4      $  513       $  2,291
   Assumed                       4,911         1,322       6,233        317,571
   Ceded                          (888)         (223)     (1,111)       (56,378)
                                ------        ------      ------       --------
   Net                          $4,532        $1,103      $5,635       $263,484
                                ======        ======      ======       ========


</TABLE>


                                       46


<PAGE>
                     GE GLOBAL INSURANCE HOLDING CORPORATION
                                AND SUBSIDIARIES

             Notes to Consolidated Financial Statements (continued)


10.  Supplemental Financial Statement and Reinsurance Data (continued)

Claims,  claim expenses and policy benefits  incurred in 2000, 1999 and 1998 are
summarized as follows:

<TABLE>
<CAPTION>
                                                Property/
(In millions)                                   Casualty     Life        Total
                                                --------------------------------
<S>                                               <C>         <C>          <C>
2000:
   Direct                                       $  682      $    -       $  682
   Assumed                                       7,113       1,754        8,867
   Ceded                                        (2,460)       (362)      (2,822)
                                                ------      ------       ------
   Net                                          $5,335      $1,392       $6,727
                                                ======      ======       ======

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

1998:
   Direct                                       $  377      $    3       $  380
   Assumed                                       3,761       1,169        4,930
   Ceded                                          (978)       (229)      (1,207)
                                                ------      ------       ------
   Net                                          $3,160      $  943       $4,103
                                                ======      ======       ======


</TABLE>

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

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

The   Company's   insurance   company   subsidiaries   remain  liable  to  their
policyholders  if  the  reinsurers  they  cede  to  are  unable  to  meet  their
contractual obligations under the applicable reinsurance agreements. To minimize
its exposure to significant  losses from reinsurance  insolvencies,  the Company
evaluates the financial condition of its reinsurers and monitors  concentrations
of credit risk arising from similar geographic  regions,  activities or economic
characteristics  of the reinsurers.  There was no significant  concentration  of
reinsurance  recoverables  and  prepaid  reinsurance  premiums  due from any one
reinsurer at December 31, 2000, with the exception of approximately $938 million
of accrued  reinsurance  recoverables from National Indemnity Company (currently
rated A++  (Superior)  by A.M.  Best  Company) in connection  with the Company's
aggregate excess retrocession program.




                                       47


<PAGE>
                     GE GLOBAL INSURANCE HOLDING CORPORATION
                                AND SUBSIDIARIES

             Notes to Consolidated Financial Statements (continued)



10.  Supplemental Financial Statement and Reinsurance Data (continued)

For financial  reinsurance  assumed,  premiums received are reported as contract
deposit  liabilities,  not as revenues-the  Company reports revenue for the risk
fees charged for those services.  Statutory  policyholder's  surplus of the life
insurance company  subsidiaries has been reduced  approximately  $220 million at
December 31, 2000 in connection with financial reinsurance assumed,  principally
due to  ceding  commissions  paid in  connection  with such  transactions  being
expensed as incurred for statutory reporting purposes.  Such amounts are secured
by future  profits on the  reinsured  business.  The  Company's  life  insurance
subsidiaries  are also subject to the risk that the ceding  companies may become
insolvent  and the right of offset would not be permitted;  however,  management
does not believe such risk is significant.

11.  Stockholder's Equity

ERC has  issued  11,673  shares of  $100,000  par value,  nonredeemable,  voting
preferred  stock  to  GE  Capital  Corporation.  This  preferred  stock  accrues
preferential and cumulative  dividends at an annual rate of 7.5% (prior to 1999,
the dividend  rate was a variable rate).  ERC may, upon approval by its Board of
Directors,  redeem the preferred  stock, in whole or in part, at 100% of the par
value of the preferred  stock plus all dividends  accrued thereon to the date of
redemption.  Preferred  stock  dividends  paid by ERC totaled $88  million,  $88
million and $85 million in 2000, 1999 and 1998, respectively.

GE Global  Insurance  has issued 1,500 shares of $100,000 par value,  nonvoting,
cumulative preferred stock to GE Capital Corporation. Dividends on the preferred
stock are paid at a rate of 5% per annum if, as and when  declared  by the Board
of Directors  of the  Company,  and totaled $7 million in 2000 and $8 million in
1999 and 1998.

12.  Statutory Accounting Practices

ERC and its domestic  insurance  company  subsidiaries are domiciled in Missouri
and Kansas,  GE Re is domiciled in Illinois and Medical  Protective is domiciled
in Indiana. Statutory-basis financial statements are prepared in accordance with
accounting  practices  prescribed or permitted by the respective state insurance
departments.  "Prescribed"  statutory  accounting  practices include state laws,
regulations  and  general   administrative  rules,  as  well  as  a  variety  of
publications of the National  Association of Insurance  Commissioners  ("NAIC").
"Permitted"  statutory  accounting  practices encompass all accounting practices
that are not  prescribed;  such  practices  may differ from state to state,  may
differ  from  company  to company  within a state and may change in the  future.
There  are  no  significant   permitted  accounting  practices  that  vary  from
prescribed  accounting  practices  being  utilized  by  the  Company's  domestic
insurance company subsidiaries, except as noted on page 49.





                                       48


<PAGE>
                     GE GLOBAL INSURANCE HOLDING CORPORATION
                                AND SUBSIDIARIES

             Notes to Consolidated Financial Statements (continued)


12.  Statutory Accounting Practices (continued)

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

<TABLE>
<CAPTION>
                                                                 December 31,
                                                               -----------------
(In millions)                                                   2000       1999
                                                               -----------------
<S>                                                              <C>        <C>

Stockholder's equity:
   ERC                                                         $4,050     $4,270
   Property and casualty subsidiaries of ERC                      225        231
   Life and annuity subsidiaries of ERC                         2,517      2,554
   GE Re                                                          775        755
   Medical Protective                                             373        358
</TABLE>

<TABLE>
<CAPTION>
                                                        Year ended December 31,
                                                       -------------------------
(In millions)                                          2000       1999      1998
                                                       -------------------------
<S>                                                    <C>        <C>       <C>

Net income (loss):
   ERC                                                 $263       $349      $671
   Property and casualty subsidiaries of ERC              9         22       112
   Life and annuity subsidiaries of ERC                 665         (9)      168
   GE Re                                                 80         40      (146)
   Property and casualty subsidiary of GE Re              -          -        40
   Medical Protective                                    81         66         -
</TABLE>

The comparability of the 1999 and 1998 amounts in the above table is impacted by
the  following two 1999  transactions:  (1) the merger of GE Re and its property
and casualty  subsidiary  and (2) the  assignment  by ERC of its  investment  in
Medical Protective to GE Global Insurance.

The payment of stockholder dividends by domestic insurance companies without the
prior  approval  of  regulators  is  limited  to  formula  amounts  based on net
investment  income  and/or  net  income,   capital  and  surplus  determined  in
accordance with statutory accounting practices, as well as the timing and amount
of dividends paid in the preceding 12 months.  The maximum amount  available for
the  payment of  dividends  by ERC  without  prior  regulatory  approval is $206
million at December  31,  2000.  Such amount  will  increase to $360  million by
December 31, 2001. Of this amount,  $88 million is committed to pay dividends on
the preferred stock issued by ERC to GE Capital  Corporation.  GE Re will not be
able to make any dividend payments during 2001 without the prior approval of the
Director of Insurance for the State of Illinois.  The maximum  amount  available
for the payment of dividends  during 2001 by Medical  Protective  without  prior
regulatory approval is $80 million after December 18, 2001.

ERC has received written  approval from the Missouri  Department of Insurance to
discount  its  claims  and  claim  expense   liabilities  related  to  long-term
disability business. Prescribed statutory accounting practice does permit claims
and  claim  expense  liabilities  associated  with  long-term  disability  to be
accounted  for  on a  discounted  basis  although  the  Missouri  Department  of
Insurance  requires  that  insurance  companies  obtain  written  permission  to
discount  certain  claims  and claim  expense  liabilities.  The total  discount
recognized for statutory  purposes was $244 million and $302 million at December
31, 2000 and 1999, respectively.

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

                                       49


<PAGE>
                     GE GLOBAL INSURANCE HOLDING CORPORATION
                                AND SUBSIDIARIES

             Notes to Consolidated Financial Statements (continued)


12.  Statutory Accounting Practices (continued)

The NAIC has adopted  minimum  risk-based  capital  requirements to evaluate the
adequacy of statutory capital and surplus in relation to an insurance  company's
risks.  Regulatory compliance with risk-based capital requirements is defined by
a ratio of a  company's  regulatory  total  adjusted  capital to its  authorized
control  level  risk-based  capital,  as defined by the NAIC.  Each of GE Global
Insurance's  domestic  insurance  company  subsidiaries   exceeded  the  minimum
risk-based capital requirements at December 31, 2000.

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

13.  Contingencies

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

14.  Fair Value of Financial Instruments

This note  discloses  fair value  information  about  certain  of the  Company's
financial  instruments,  whether or not  recognized  in the  balance  sheet.  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.

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, separate accounts 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.

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.


                                       50


<PAGE>
                     GE GLOBAL INSURANCE HOLDING CORPORATION
                                AND SUBSIDIARIES

             Notes to Consolidated Financial Statements (continued)


14.  Fair Value of Financial Instruments (continued)

Information  about certain  financial  instruments that were not carried at fair
value at December 31, 2000 and 1999, is summarized as follows:

<TABLE>
<CAPTION>
                                                      December 31, 2000                            December 31, 1999
                                          ------------------------------------------   ------------------------------------------
                                                          Assets (liabilities)                         Assets (liabilities)
                                                     -------------------------------              -------------------------------
                                                                Estimated Fair Value                         Estimated Fair Value
                                          Notional   Carrying   --------------------   Notional   Carrying   --------------------
(In millions)                              Amount     Amount      High       Low        Amount     Amount      High       Low
                                          ------------------------------------------   ------------------------------------------
<S>                                          <C>        <C>        <C>        <C>         <C>        <C>        <C>        <C>

Assets:
  Options, including "floors"              $ 209      $   6      $  12      $  12       $  52      $   7      $  13      $  13
  Other cash financial instruments           (a)         93         95         95         (a)         70         70         70

Liabilities:
  Borrowings and related instruments:
   Borrowings (b)                            (a)     (1,654)    (1,711)    (1,711)        (a)       (956)      (898)      (898)
   Currency forwards                         591          2          2          2         270          -          -          -
  Investment contract benefits               (a)     (1,060)    (1,039)    (1,039)        (a)     (1,145)    (1,125)    (1,125)
  Financial guaranty reinsurance           3,877        (19)       (21)       (28)      4,132        (34)       (32)       (43)
  Performance guarantees,
    principally letters of credit            644          -          -          -         549          -          3          1
Other firm commitments:
  Cross currency swaps                       647        292        275        275       1,004        238        200        200
</TABLE>

(a)  Not applicable.
(b)  See Note 9.

The  Company  uses S&P 500  indexed  call  options  to hedge  the  equity  index
component of reinsured  single-premium  equity-indexed  annuities.  The Company,
having  paid a premium for these  options,  has the right to purchase a notional
investment  in  the  S&P  500  index  at  a  fixed  price  on a  specific  date.
Additionally, the Company has entered into an equity floor contract to hedge the
equity-related  risk resulting from certain Canadian  equity-indexed  investment
contracts.

Cross  currency  swaps and  foreign  currency  forward  purchase  contracts  are
employed  to manage  exposures  to changes in  currency  exchange  rates.  These
financial  instruments  generally  are  used as  hedges  of  identified  assets,
liabilities or net functional currency positions.

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

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

                                       51


<PAGE>
                     GE GLOBAL INSURANCE HOLDING CORPORATION
                                AND SUBSIDIARIES

             Notes to Consolidated Financial Statements (continued)


15.  Segment Information

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

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

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

International  property/casualty  operations are conducted through  subsidiaries
and branch  offices  located in Australia,  Brazil,  Denmark,  England,  France,
Germany,  Hong Kong,  Ireland,  Italy,  Japan,  Lebanon,  Luxembourg,  Malaysia,
Mexico,  New Zealand,  Poland,  Singapore and Spain and include  reinsurance  of
property/casualty business in those countries and elsewhere.


Life Reinsurance Segment (Life)

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

The Company's industry segment activity is summarized as follows:

<TABLE>
<CAPTION>
                                                  2000 - Industry Segments
                                            ------------------------------------
                                            Property/
(In millions)                               Casualty       Life     Consolidated
                                            ------------------------------------
<S>                                             <C>         <C>           <C>

Net premiums written                         $ 6,554     $ 1,637      $ 8,191
                                             =======     =======      =======

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

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

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

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


                                       52


<PAGE>
                     GE GLOBAL INSURANCE HOLDING CORPORATION
                                AND SUBSIDIARIES

             Notes to Consolidated Financial Statements (continued)


15.  Segment Information (continued)

<TABLE>
<CAPTION>
                                                  1999 - Industry Segments
                                            ------------------------------------
                                            Property/
(In millions)                               Casualty       Life     Consolidated
                                            ------------------------------------
<S>                                             <C>         <C>          <C>

Net premiums written                         $ 5,883      $1,264       $ 7,147
                                             =======      ======       =======

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

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

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

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

<TABLE>
<CAPTION>
                                                  1998 - Industry Segments
                                            ------------------------------------
                                            Property/
(In millions)                               Casualty       Life     Consolidated
                                            ------------------------------------
<S>                                             <C>         <C>          <C>

Net premiums written                         $ 4,888      $1,096       $ 5,984
                                             =======      ======       =======

Net premiums earned                          $ 4,532      $1,103       $ 5,635
Net investment income                            705         280           985
Net realized gains on investments                398          34           432
Other revenues                                    43         108           151
                                             -------      ------       -------
Total revenues                                 5,678       1,525         7,203
                                             -------      ------       -------

Claims, claim expenses and policy benefits     3,160         943         4,103
Insurance acquisition costs                    1,095         262         1,357
Other operating costs and expenses               510         163           673
                                             -------      ------       -------
Total costs and expenses                       4,765       1,368         6,133
                                             -------      ------       -------

Earnings before income taxes                 $   913      $  157       $ 1,070
                                             =======      ======       =======

Total assets at December 31                  $25,754      $9,293       $35,047
                                             =======      ======       =======
</TABLE>


                                       53


<PAGE>
                     GE GLOBAL INSURANCE HOLDING CORPORATION
                                AND SUBSIDIARIES

             Notes to Consolidated Financial Statements (continued)


15.  Segment Information (continued)

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

<TABLE>
<CAPTION>
                                                        Geographic Area
                                          -------------------------------------------
(In millions)                             Domestic     International     Consolidated
                                          -------------------------------------------
<S>                                          <C>             <C>              <C>
2000:
   Revenues                               $ 5,617         $ 4,514          $10,131
   Earnings before income taxes               357             248              605
   Identifiable assets at December 31      23,285          15,279           38,564

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

1998:
   Revenues                               $ 3,808         $ 3,395          $ 7,203
   Earnings before income taxes               674             396            1,070
   Identifiable assets at December 31      21,475          13,572           35,047


</TABLE>


16.  Unaudited Quarterly Financial Data

The Company's  quarterly  financial  results and other data in 2000 and 1999 are
summarized as follows:

<TABLE>
<CAPTION>
                                            Year ended December 31, 2000
                                     -------------------------------------------
                                      First      Second       Third      Fourth
(In millions)                        Quarter     Quarter     Quarter     Quarter
                                     -------------------------------------------
<S>                                    <C>         <C>         <C>         <C>

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

<TABLE>
<CAPTION>
                                            Year ended December 31, 1999
                                     -------------------------------------------
                                      First      Second       Third      Fourth
(In millions)                        Quarter     Quarter     Quarter     Quarter
                                     -------------------------------------------
<S>                                    <C>         <C>         <C>         <C>

Net premiums earned                  $1,674      $1,722      $1,622      $1,878
Net investment income                   278         295         294         284
Total costs and expenses              1,801       2,001       1,946       2,295
Net earnings                            249         174         220          77
</TABLE>


                                       54





<PAGE>
                          Financial Statement Schedules


                                       55


<PAGE>
<TABLE>
<CAPTION>
                                                                     Schedule II

                     GE GLOBAL INSURANCE HOLDING CORPORATION
                                AND SUBSIDIARIES

                  Condensed Financial Information of Registrant
                                (Parent Company)

                              Statement of Earnings


                                                        Year ended December 31,
                                                       -------------------------
(In millions)                                          2000      1999      1998
                                                       -------------------------
<S>                                                    <C>       <C>       <C>

Revenues
Net investment income                                  $ 11      $  1      $  2
Equity in undistributed earnings                        582       393       168
Dividends from subsidiaries                              88       387       654
Other income                                              7         -         -
                                                       ----      ----      ----
Total revenues                                          688       781       824
                                                       ----      ----      ----

Costs and Expenses
Interest expense                                        121        68        49
Other operating costs and expenses                       34        26        20
                                                       ----      ----      ----
Total costs and expenses                                155        94        69
                                                       ----      ----      ----

Earnings before income taxes                            533       687       755

Income tax benefit                                       48        33        24
                                                       ----      ----      ----

Net earnings                                           $581      $720      $779
                                                       ====      ====      ====
</TABLE>


See Notes to Condensed Financial Information of Registrant.


                                       56


<PAGE>
<TABLE>
<CAPTION>
                                                                            Schedule II

                     GE GLOBAL INSURANCE HOLDING CORPORATION
                                AND SUBSIDIARIES

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

                         Statement of Financial Position


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

Assets
Cash                                                                $    1      $    4
Investment in subsidiaries                                           7,577       7,074
Short-term investments, at amortized cost                               89          85
Indebtedness of related parties                                        144         113
Other assets                                                            22          11
                                                                    ------      ------

Total assets                                                        $7,833      $7,287
                                                                    ======      ======

Liabilities and equity
Other liabilities                                                   $   25      $   31
Long-term borrowings                                                 1,654         956
Indebtedness to related parties                                        129         725
                                                                    ------      ------
   Total liabilities                                                 1,808       1,712
                                                                    ------      ------
Preferred stock, $100,000 par value; authorized,
   issued and outstanding - 1,500 shares                               150         150
Common stock, $5,000 par value; authorized,
   issued and outstanding - 1,000 shares                                 5           5
Paid-in capital                                                        845         845
Retained earnings                                                    5,204       4,630
Accumulated unrealized gains on investment securities - net (a)        143          51
Accumulated foreign currency translation adjustments (a)              (322)       (106)
                                                                    ------      ------
   Total stockholder's equity                                        6,025       5,575
                                                                    ------      ------

Total liabilities and equity                                        $7,833      $7,287
                                                                    ======      ======
</TABLE>

(a)  The sum of  accumulated  unrealized  gains  on  investment  securities  and
     accumulated   foreign   currency   translation    adjustments   constitutes
     "Accumulated  nonowner  changes  other  than  earnings,"  as  shown  in the
     Consolidated Statement of Stockholder's  Equity, and was $(179) million and
     $(55) million at year-end 2000 and 1999, respectively.


See Notes to Condensed Financial Information of Registrant.


                                       57


<PAGE>
<TABLE>
<CAPTION>
                                                                     Schedule II

                     GE GLOBAL INSURANCE HOLDING CORPORATION
                                AND SUBSIDIARIES

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

                             Statement of Cash Flows


                                                      Year ended December 31,
                                                    ----------------------------
(In millions)                                        2000       1999       1998
                                                    ----------------------------
<S>                                                  <C>        <C>         <C>

Cash Flows From Operating Activities
Net earnings                                         $581       $720       $779
Adjustments to reconcile net earnings to cash
   from operating activities:
      Equity in undistributed earnings               (625)      (393)      (432)
      Other, net                                       54         (7)       (22)
                                                     ----       ----       ----
   Cash from operating activities                      10        320        325
                                                     ----       ----       ----

Cash Flows From Investing Activities
Net  purchases  of short-term investments              (7)       (34)       (10)
Investment in subsidiaries                           (108)      (694)      (463)
                                                     ----       ----       ----
   Cash used for investing activities                (115)      (728)      (473)
                                                     ----       ----       ----

Cash Flows From Financing Activities
Proceeds from short-term borrowings                   126        694        426
Payments on short-term borrowings                    (708)      (426)         -
Proceeds from long-term borrowings                    691        395          -
Dividends paid                                         (7)      (251)      (278)
                                                     ----       ----       ----
   Cash from financing activities                     102        412        148
                                                     ----       ----       ----

Increase (decrease) in cash                            (3)         4          -
Cash at beginning of year                               4          -          -
                                                     ----       ----       ----

Cash at end of year                                  $  1       $  4       $  -
                                                     ====       ====       ====
</TABLE>


See Notes to Condensed Financial Information of Registrant.


                                       58


<PAGE>
                                                                     Schedule II

                     GE GLOBAL INSURANCE HOLDING CORPORATION
                                AND SUBSIDIARIES

             Notes to Condensed Financial Information of Registrant
                                (Parent Company)


1.  Basis of Presentation

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

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

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

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


2.  Dividends from Subsidiaries

Cash dividends paid to GE Global Insurance by its consolidated subsidiaries were
$109  million,   $323  million  and  $390  million  in  2000,   1999  and  1998,
respectively.

On December 31,  1998,  ERC  transferred  to GE Global  Insurance, as a non-cash
dividend,  100% of its $264  million  investment  in the  common  stock of First
Excess  Reinsurance  Corporation  ("First  Excess").  GE Global  Insurance  then
contributed the common stock of First Excess to GE Re on that same date.


                                       59


<PAGE>
<TABLE>
<CAPTION>
                                                                                              Schedule III

                     GE GLOBAL INSURANCE HOLDING CORPORATION
                                AND SUBSIDIARIES

                       Supplementary Insurance Information


      Column A            Column B            Column C             Column D        Column E       Column F
----------------------------------------------------------------------------------------------------------
                          Deferred         Claims and Claim
                          Insurance      Expenses and Future                     Accumulated         Net
                         Acquisition       Policy Benefit         Unearned         Contract       Premiums
(In millions)               Costs              Reserves           Premiums          Values         Earned
                         ---------------------------------------------------------------------------------
<S>                          <C>                  <C>                 <C>             <C>            <C>

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

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

December 31, 1998:
   Property/Casualty       $  459              $15,342              $1,934          $    -         $4,532
   Life                       744                2,174                 231           2,271          1,103
                           ------              -------              ------          ------         ------
   Total                   $1,203              $17,516              $2,165          $2,271         $5,635
                           ======              =======              ======          ======         ======


</TABLE>

<TABLE>
<CAPTION>
                          Column G            Column H             Column I        Column J       Column K
                         ---------------------------------------------------------------------------------

                                                                 Amortization        Other
                                            Claims, Claim        of Deferred       Operating
                             Net          Expenses and Policy      Insurance         Costs          Net
(In millions)            Investment            Benefits          Acquisition          and         Premiums
                           Income              Incurred             Costs          Expenses       Written
                         ---------------------------------------------------------------------------------
<S>                        <C>                    <C>                 <C>             <C>            <C>
December 31, 2000:
   Property/Casualty       $  953               $5,335              $1,553          $  669         $6,554
   Life                       362                1,392                 360             217
                           ------               ------              ------          ------
   Total                   $1,315               $6,727              $1,913          $  886
                           ======               ======              ======          ======

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

December 31, 1998:
   Property/Casualty       $  705               $3,160              $1,095          $  510         $4,888
   Life                       280                  943                 262             163
                           ------               ------              ------          ------
   Total                   $  985               $4,103              $1,357          $  673
                           ======               ======              ======          ======


</TABLE>


                                       60


<PAGE>
                                   SIGNATURES

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


<TABLE>
<CAPTION>
                                                      GE GLOBAL INSURANCE HOLDING CORPORATION

March 23, 2001                                         By:                  /s/ Marc A. Meiches
                                                          ------------------------------------------------------------
                                                                              Marc A. Meiches
                                                               Senior Vice President and Chief Financial Officer


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

              <S>                                                   <C>                                      <C>

              Signatures                                           Title                                     Date
              ----------                                           -----                                     ----

        /s/ RONALD R. PRESSMAN          President, Chief Executive Officer and Director                 March 23, 2001
---------------------------------------
          Ronald R. Pressman            (Principal Executive Officer)


        /s/ MARC A. MEICHES             Senior Vice President, Chief Financial Officer and Director     March 23, 2001
---------------------------------------
          Marc A. Meiches               (Principal Financial Officer)


        /s/ DENNIS D. DAMMERMAN         Chairman                                                        March 23, 2001
---------------------------------------
          Dennis D. Dammerman


          /s/ JAMES A. PARKE            Director                                                        March 23, 2001
---------------------------------------
            James A. Parke


       /s/ NICHOLAS J. SPAETH           Senior Vice President and General Counsel                       March 23, 2001
---------------------------------------
          Nicholas J. Spaeth


         /s/ JOHN M. CONNELLY           Senior Vice President and Director                              March 23, 2001
---------------------------------------
           John M. Connelly


         /s/ WILLIAM J. STEILEN         Vice President and Controller                                   March 23, 2001
---------------------------------------
           William J. Steilen           (Principal Accounting Officer)
</TABLE>


                                       61