SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                                    FORM 10-Q


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


                    FOR QUARTERLY PERIOD ENDED JUNE 30, 1999


                          Commission File Number 1-8538


                             ASCENT ASSURANCE, INC.
                          ---------------------------
             (Exact name of Registrant as specified in its Charter)



     DELAWARE                                           73-1165000
------------------------                   ------------------------------------
(State of Incorporation)                   (I.R.S. Employer Identification No.)



 110 WEST SEVENTH STREET, SUITE 300, FORT WORTH, TEXAS                76102
--------------------------------------------------------            ---------
(Address of Principal Executive Offices)                            (Zip Code)

                                  817-878-3300
              ----------------------------------------------------
              (Registrant's Telephone Number, including Area Code)


                                       N/A
   --------------------------------------------------------------------------
   (Former Name, Address and Former Fiscal Year, if changed since Last Report)


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 whether the Registrant has filed all reports required to
be filed by  Section  12,  13 or 15(d) of the  Securities  Exchange  Act of 1934
subsequent to the  distribution of securities under a plan confirmed by a court.
YES X NO___


Common Stock - Par Value $.01   6,500,000 Shares Outstanding at August 13, 1999




<PAGE>




<TABLE>
<CAPTION>
                             ASCENT ASSURANCE, INC.
                               INDEX TO FORM 10-Q

-------------------------------------------------------------------------------
                                                                                                           PAGE NO.

<S>                                                                                                              <C>
PART I - FINANCIAL INFORMATION

ITEM 1 - FINANCIAL STATEMENTS

         Ascent Assurance, Inc. Condensed Consolidated Balance Sheets

           at June 30, 1999 and March 31, 1999..................................................................  3

         Westbridge Capital Corp. Condensed Consolidated Balance Sheet

           at December 31, 1998.................................................................................  4

         Ascent Assurance, Inc. Condensed Consolidated Statement of Income

           for the Three Months Ended June 30, 1999.............................................................  5

         Westbridge Capital Corp. Condensed Consolidated Statements of Income
           for the Three Months Ended March 31, 1999 and June 30, 1998 and for

           the Six Months Ended June 30, 1998...................................................................  6

         Ascent Assurance, Inc. Condensed Consolidated Statement of Cash Flows

           for the Three Months Ended June 30, 1999.............................................................  7

         Westbridge Capital Corp. Condensed Consolidated Statements of Cash Flows
           for the Three Months Ended March 31, 1999 and June 30, 1998 and for

           the Six Months Ended June 30, 1998...................................................................  8

         Notes to Condensed Consolidated Financial Statements...................................................  9

ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

         General................................................................................................ 16

         Business Overview...................................................................................... 16

         Operating Results...................................................................................... 17

         Financial Condition.................................................................................... 19

         Liquidity, Capital Resources and Statutory Capital and Surplus......................................... 21

         Year 2000.............................................................................................. 24

         Forward-Looking Statements............................................................................. 26

PART II - OTHER INFORMATION

ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.................................................... 27

ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K....................................................................... 28
</TABLE>


<PAGE>


<TABLE>
<CAPTION>
                             ASCENT ASSURANCE, INC.
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                   (Unaudited)


                                                                              JUNE 30, 1999          MARCH 31, 1999
                                                                            -------------------    -------------------
                                                                                (in thousands, except share data)

<S>                                                                         <C>                  <C>
ASSETS

Investments:
   Fixed Maturities:
     Available-for-sale, at market value (amortized cost $112,214
       and $116,352)                                                            $    109,204           $    116,352
   Equity securities, at market                                                        2,250                  2,275
   Other investments                                                                     468                    516
   Short-term investments                                                              7,210                  7,789
                                                                            -------------------    -------------------
       Total Investments                                                             119,132                126,932

Cash                                                                                   2,155                  2,210
Accrued investment income                                                              2,156                  2,169
Receivables from agents, net of allowance for doubtful accounts of
   $6,424 and $6,358                                                                   6,938                  8,182
Deferred policy acquisition costs                                                     16,383                 15,039
Deferred tax asset, net                                                                8,374                  7,347
Other assets                                                                           8,013                  7,916
                                                                            -------------------    -------------------

       TOTAL ASSETS                                                             $    163,151           $    169,795
                                                                            ===================    ===================

LIABILITIES, REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY

Liabilities:

   Policy liabilities and accruals:
     Future policy benefits                                                     $     55,760           $     54,738
     Claim reserves                                                                   38,386                 41,068
                                                                            -------------------    -------------------
       Total policy liabilities and accruals                                          94,146                 95,806
Accounts payable and other liabilities                                                16,636                 18,541
Notes payable                                                                          3,509                  5,088
                                                                            -------------------    -------------------
     Total Liabilities                                                               114,291                119,435
                                                                            -------------------    -------------------
Redeemable convertible preferred stock                                                23,257                 23,257
                                                                            -------------------    -------------------
Stockholders' Equity:
   Common stock ($.01 par value, 30,000,000 shares authorized;
     6,500,000 shares issued)                                                             65                     65
   Capital in excess of par value                                                     27,103                 27,038
   Accumulated other comprehensive income, net of tax                                 (1,972)                     -
   Retained Earnings                                                                     407                      -
                                                                            -------------------    -------------------
     Total Stockholders' Equity                                                       25,603                 27,103
                                                                            -------------------    -------------------
       TOTAL LIABILITIES, REDEEMABLE PREFERRED STOCK
         AND STOCKHOLDERS' EQUITY                                               $    163,151           $    169,795
                                                                            ===================    ===================
</TABLE>


See Notes to Condensed Consolidated Financial Statements.


<PAGE>



<TABLE>
<CAPTION>
                            WESTBRIDGE CAPITAL CORP.
                          (NOW, ASCENT ASSURANCE, INC.)
                      CONDENSED CONSOLIDATED BALANCE SHEET
                                    (Audited)

                                                                                              DECEMBER 31, 1998
                                                                                            -----------------------
                                                                                            (in thousands, except
ASSETS                                                                                           share data)

<S>                                                                                        <C>
Investments:
   Fixed Maturities:
     Available-for-sale, at market value (amortized cost $119,167)                                 $   122,864
   Equity securities, at market                                                                          2,575
   Other investments                                                                                       598
   Short-term investments                                                                                5,393
                                                                                            -----------------------
     Total Investments                                                                                 131,430

Cash                                                                                                       278
Accrued investment income                                                                                2,372
Receivables from agents, net of allowance for doubtful accounts of $6,592                                9,860
Deferred policy acquisition costs                                                                       14,177
Other assets                                                                                            11,624
                                                                                            -----------------------
       TOTAL ASSETS                                                                                $   169,741
                                                                                            =======================

LIABILITIES, REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' DEFICIT

Liabilities:
   Policy liabilities and accruals:
     Future policy benefits                                                                        $    53,871
     Claim reserves                                                                                     44,116
                                                                                            -----------------------
     Total policy liabilities and accruals                                                              97,987

Accounts payable and other liabilities                                                                  14,807
Accrued interest and dividends payable                                                                  11,377
Notes payable                                                                                            6,192
Senior subordinated notes, net of unamortized discount, due 2002                                        19,523
Convertible subordinated notes, due 2004                                                                70,000
                                                                                            -----------------------
     Total Liabilities                                                                                 219,886
                                                                                            -----------------------
Redeemable Preferred Stock                                                                              11,935
                                                                                            -----------------------
Stockholders' (Deficit) Equity:
   Common stock ($.10 par value, 30,000,000 shares authorized;
     7,035,809 shares issued)                                                                              703
   Capital in excess of par value                                                                       37,641
   Accumulated other comprehensive income, net of tax                                                    3,911
   Deficit                                                                                            (104,335)
                                                                                            -----------------------
     Total Stockholders' Deficit                                                                       (62,080)
                                                                                            -----------------------
       TOTAL LIABILITIES, REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' DEFICIT                     $   169,741
                                                                                            =======================
</TABLE>

See Notes to Condensed Consolidated Financial Statements.


<PAGE>

<TABLE>
<CAPTION>
                             ASCENT ASSURANCE, INC.
                   CONDENSED CONSOLIDATED STATEMENT OF INCOME
                                   (Unaudited)



                                                                              THREE MONTHS ENDED
                                                                                 JUNE 30, 1999
                                                                              --------------------
                                                                                (in thousands,
                                                                               except per share
                                                                                     data)
<S>                                                                         <C>
       REVENUES:
          Premiums:
            First-year                                                            $       3,903
            Renewal                                                                      25,671
                                                                              --------------------
                                                                                         29,574
          Net investment income                                                           2,333
          Fee and service income                                                          3,871
          Net realized loss on investments                                                  (63)
                                                                              --------------------
                                                                                         35,715
                                                                              --------------------
       BENEFITS, CLAIMS AND EXPENSES:
          Benefits and claims                                                            21,733
          Amortization of deferred policy
            acquisition costs                                                               865
          Commissions                                                                     4,139
          General and administrative expenses                                             5,971
          Taxes, licenses and fees                                                        1,293
          Interest expense on notes payable                                                  93
                                                                              --------------------
                                                                                         34,094
                                                                              --------------------
       Income before income taxes                                                         1,621
       Federal income tax expense                                                          (567)
                                                                              --------------------
          NET INCOME                                                              $       1,054
                                                                              ====================

       Preferred stock dividends                                                            647
                                                                              --------------------
       INCOME APPLICABLE TO COMMON STOCKHOLDERS                                   $         407
                                                                              ====================

       BASIC AND DILUTED NET INCOME PER COMMON SHARE                              $         .06
                                                                              ====================
       WEIGHTED AVERAGE SHARES OUTSTANDING:
          Basic                                                                           6,500
                                                                              ====================
          Diluted                                                                         6,530
                                                                              ====================

</TABLE>



See Notes to Condensed Consolidated Financial Statements.


<PAGE>


<TABLE>
<CAPTION>
                            WESTBRIDGE CAPITAL CORP.
                          (NOW, ASCENT ASSURANCE, INC.)
                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                                   (Unaudited)



                                                        THREE MONTHS           THREE MONTHS            SIX MONTHS
                                                           ENDED                  ENDED                  ENDED
                                                       MARCH 31, 1999         JUNE 30, 1998          JUNE 30, 1998
                                                     -------------------    -------------------    -------------------
                                                                  (in thousands, except per share data)
<S>                                                <C>                    <C>                    <C>
REVENUES:
  Premiums:
     First-year                                          $       3,121          $       4,659          $      11,690
     Renewal                                                    26,827                 30,592                 61,000
                                                     -------------------    -------------------    -------------------
                                                                29,948                 35,251                 72,690
  Net investment income                                          2,562                  3,192                  6,358
  Fee and service income                                         4,039                  4,037                  8,099
  Net realized gain on investments                                  41                    267                    529
                                                     -------------------    -------------------    -------------------
                                                                36,590                 42,747                 87,676
                                                     -------------------    -------------------    -------------------
BENEFITS, CLAIMS AND EXPENSES:
  Benefits and claims                                           21,799                 25,412                 53,848
  Amortization of deferred policy
     acquisition costs                                           1,194                    713                  1,948
  Commissions                                                    5,002                  8,708                 18,199
  General and administrative expenses                            6,635                  6,892                 13,900
  Taxes, licenses and fees                                       1,059                  1,443                  2,731
  Interest expense on notes payable                                119                    235                    527
  Interest expense on retired/canceled debt                        507                  1,889                  3,777
  Reorganization expense                                             -                  1,084                  2,100
                                                     -------------------    -------------------    -------------------
                                                                36,315                 46,376                 97,030
                                                     -------------------    -------------------    -------------------
Income (loss) before income taxes                                  275                 (3,629)                (9,354)
Federal income tax (expense) benefit                               (67)                   480                  1,239
                                                     -------------------    -------------------    -------------------
     NET INCOME (LOSS)                                   $         208          $      (3,149)         $      (8,115)
                                                     ===================    ===================    ===================
Preferred stock dividends                                            -                    (62)                   409
                                                     ===================    ===================    ===================
INCOME APPLICABLE TO COMMON STOCKHOLDERS                 $         208          $      (3,087)         $      (8,524)
                                                     ===================    ===================    ===================
BASIC AND DILUTED EARNINGS (LOSS) PER
   COMMON SHARE                                          $         .03          $        (.48)         $       (1.36)
                                                     ===================    ===================    ===================
WEIGHTED AVERAGE SHARES OUTSTANDING:
  Basic                                                          7,032                  6,381                  6,289
                                                     ===================    ===================    ===================
  Diluted                                                        7,032                  6,381                  6,289
                                                     ===================    ===================    ===================
</TABLE>




See Notes to Condensed Consolidated Financial Statements.


<PAGE>


<TABLE>
<CAPTION>
                             ASCENT ASSURANCE, INC.
                 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                                   (Unaudited)




                                                                                   THREE MONTHS ENDED
                                                                                     JUNE 30, 1999
                                                                                   -------------------
                                                                                     (in thousands)

<S>                                                                                <C>
     CASH FLOWS FROM OPERATING ACTIVITIES:
        Net income                                                                     $       1,054
        Adjustments to reconcile net income to cash
          provided by (used for) operating activities:
          Amortization of deferred policy acquisition costs                                      864
          Decrease in receivables from agents                                                  1,244
          Addition to deferred policy acquisition costs                                       (2,208)
          Decrease in other assets                                                             1,066
          Decrease in policy liabilities and accruals                                         (1,660)
          Decrease in accounts payable and other liabilities                                  (2,552)
          Increase in deferred income taxes, net                                              (1,027)
        Other, net                                                                             1,405
                                                                                   -------------------
            Net Cash Used For Operating Activities                                            (1,814)
                                                                                   -------------------
     CASH FLOWS FROM INVESTING ACTIVITIES:
        Proceeds from investments sold:
          Fixed maturities, called or matured                                                    807
          Fixed maturities, sold                                                               6,563
          Other investments, sold or matured                                                      58
        Cost of investments acquired                                                          (2,927)
       Software, equipment, and other                                                         (1,163)
                                                                                   -------------------
            Net Cash Provided By Investing Activities                                          3,338
                                                                                   -------------------
     CASH FLOWS FROM FINANCING ACTIVITIES:
        Issuance of notes payable                                                              1,408
        Repayment of notes payable                                                            (2,987)
                                                                                   -------------------
            Net Cash Used For Financing Activities                                            (1,579)
                                                                                   -------------------
        Decrease In Cash During Period                                                           (55)
        Cash at Beginning of Period                                                            2,210
                                                                                   -------------------
            Cash at End of Period                                                      $       2,155
                                                                                   ===================
</TABLE>






See Notes to Condensed Consolidated Financial Statements.


<PAGE>


<TABLE>
<CAPTION>
                                              WESTBRIDGE CAPITAL CORP.
                                            (NOW, ASCENT ASSURANCE, INC.)
                                   CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                     (Unaudited)



                                                           THREE MONTHS           THREE MONTHS           SIX MONTHS
                                                              ENDED                  ENDED                  ENDED
                                                          MARCH 31, 1999         JUNE 30, 1998          JUNE 30, 1998
                                                        -------------------    -------------------    ------------------
                                                                                (in thousands)

<S>                                                    <C>                   <C>                     <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Income (loss) applicable to common stockholders             $         208          $      (3,087)         $      (8,524)
  Adjustments to reconcile net income to cash
     provided by (used for) operating activities
  Amortization of deferred policy acquisition costs                 1,194                    713                  1,948
  Decrease in receivables from agents                               1,678                  2,560                  5,152
  Addition to deferred policy acquisition costs                    (2,056)                  (549)                (1,263)
  (Increase) decrease in other assets                              (1,007)                 1,307                   (517)
  Decrease in policy liabilities and accruals                      (2,181)                (2,405)                (3,391)
  Increase in accounts payable and other                            4,428                  2,840                  4,914
liabilities
  Increase in deferred income taxes, net                           (1,070)                     -                      -
  Other, net                                                        1,308                   (493)                  (313)
                                                        -------------------    -------------------    ------------------
     Net Cash Provided By (Used For) Operating
       Activities                                                   2,502                    886                 (1,994)
                                                        -------------------    -------------------    ------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Proceeds from investments sold:
     Fixed maturities, called or matured                            2,215                  1,872                  5,126
     Fixed maturities, sold                                         4,904                  7,116                 11,343
     Other investments, sold or matured                               139                  1,871                  1,936
  Cost of investments acquired                                     (5,851)                (6,474)               (10,429)
  Other                                                              (873)                  (604)                  (763)
                                                        -------------------    -------------------    ------------------
     Net Cash Provided By Investing Activities                        534                  3,781                  7,213
                                                        -------------------    -------------------    ------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Retirement of senior subordinated debentures                    (15,167)                     -                      -
   Issuance of notes payable                                          911                  1,599                  2,974
  Repayment of notes payable                                       (2,015)                (4,526)                (7,022)
  Issuance of preferred stock                                      15,167                      -                      -
                                                        -------------------    -------------------    ------------------
     Net Cash Used For Financing Activities                        (1,104)                (2,927)                (4,048)
                                                        -------------------    -------------------    ------------------
Increase in Cash During Period                                      1,932                  1,740                  1,171
Cash at Beginning of Period                                           278                    461                  1,030
                                                        -------------------    -------------------    ------------------
     Cash at End of Period                                  $       2,210          $       2,201          $       2,201
                                                        ===================    ===================    ==================
</TABLE>

See Notes to Condensed Consolidated Financial Statements.



                             ASCENT ASSURANCE, INC.
                      (FORMERLY, WESTBRIDGE CAPITAL CORP.)
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)




NOTE 1 - REORGANIZATION EFFECTIVE MARCH 24, 1999

On September 16, 1998, Westbridge Capital Corp. ("Westbridge") commenced its
reorganization by filing a voluntary petition for relief under Chapter 11 of the
United States Code in the United States Bankruptcy Court for the District of
Delaware (the "Bankruptcy Court"), along with a disclosure statement (as
amended, the "Disclosure Statement") and a proposed plan of reorganization (as
amended, the "Plan"). The filing of the Disclosure Statement and Plan culminated
months of negotiations between Westbridge and an ad hoc committee (the
"Creditors' Committee") of holders of its 11% Senior Subordinated Notes due 2002
(the "Senior Notes") and its 7-1/2% Convertible Subordinated Notes due 2004 (the
"Convertible Notes"). The Disclosure Statement was approved by entry of an order
by the Bankruptcy Court on October 30, 1998. Following the approval of the Plan
by the holders of allowed claims and equity interests, the Bankruptcy Court
confirmed the Plan on December 17, 1998. The Plan became effective March 24,
1999 (the "Effective Date").

On the Effective Date, Westbridge's certificate of incorporation and by-laws
were amended and restated in their entirety and pursuant thereto, Westbridge
changed its corporate name to "Ascent Assurance, Inc." ("Ascent"). References
herein to the "Company" shall mean for all periods on or prior to March 31,
1999, Westbridge and its subsidiaries, and for all periods on or after the close
of business on March 31, 1999, Ascent and its subsidiaries.

The following summary of the Plan omits certain information set forth in the
Plan. Any statements contained herein concerning the Plan are not necessarily
complete, and in each such instance reference is made to the Plan, a copy of
which is incorporated by reference to Exhibit 2 of Westbridge's Current Report
on Form 8-K which was filed with the Securities and Exchange Commission on
December 29, 1998. Each such statement is qualified in its entirety by such
reference. The Plan provided for the recapitalization of certain old debt and
equity interests in Westbridge and the issuance of new equity securities and
warrants. Key terms of the Plan included the following:

CANCELLATION OF EXISTING SECURITIES. Pursuant to the Plan, the following
securities of Westbridge were canceled as of the Effective Date: (i) $23.3
million aggregate principal amount and all accrued and unpaid interest on, the
Senior Notes, (ii) $77.3 million aggregate principal amount and all accrued and
unpaid interest on, the Convertible Notes, (iii) $13.2 million aggregate
liquidation preference of and all accrued and unpaid dividends on, Westbridge's
Series A Convertible Redeemable Exchangeable Preferred Stock (the "Old Preferred
Stock"), (iv) Westbridge's Common Stock, par value $.10 per share (the "Old
Common Stock"), (v) all outstanding warrants to purchase Old Common Stock, (vi)
all outstanding unexercised stock options to purchase Old Common Stock, and
(vii) all unvested grants of restricted Old Common Stock.


<PAGE>



NEW EQUITY CAPITAL STRUCTURE. Pursuant to Ascent's Amended and Restated
Certificate of Incorporation, the total number of shares of capital stock Ascent
has the authority to issue is 30,040,000, consisting of 30,000,000 shares of
common stock, par value $.01 per share (the "New Common Stock") and 40,000
shares of preferred stock, par value $.01 per share, all of which are designated
Series A Convertible Preferred Stock (the "New Preferred Stock").

DISTRIBUTIONS UNDER THE PLAN

         CASH DISTRIBUTION

         To the holders of Senior Notes other than Credit Suisse First Boston
         Corporation ("CSFB"), cash payments totaling approximately $15.2
         million, which equaled the total Allowed 11% Senior Note Claims (as
         defined in the Plan) held by creditors other than CSFB, were
         distributed subject to completion of the exchange of securities as
         contemplated by the Plan. In order to provide the Company with
         sufficient funds to make the cash distribution to the holders of the
         Allowed 11% Senior Notes under the Plan, an affiliate of CSFB (the
         "CSFB Affiliate") purchased all of the shares of the New Preferred
         Stock which were not otherwise distributed under the Plan.

         ISSUANCE OF NEW SECURITIES

         Pursuant to the Plan and the purchase of New Preferred Stock, 6,500,000
         shares of New Common Stock and 23,257 shares of New Preferred Stock
         were issued, subject to the completion of the exchange requirements as
         contemplated by the Plan, on the Effective Date as follows:

               To holders of general unsecured claims and Convertible Notes as
              of December 10, 1998, 6,077,500 shares, and to management at the
              Effective Date, 32,500 shares, or in aggregate 94% of the New
              Common Stock issued on the Effective Date. Holders of general
              unsecured claims and Convertible Notes received their first
              distribution of shares in partial satisfaction and discharge of
              their allowed claims in April 1999. The remaining shares of New
              Common Stock are expected to be distributed by September 1999.

               To holders of Old Preferred Stock as of December 10, 1998,
              260,000 shares, or 4%, of the New Common Stock issued on the
              Effective Date and Warrants ("New Warrants") to purchase an
              additional 277,505 shares, or 2%, of the New Common Stock issued
              on the Effective Date, on a fully diluted basis.

               To holders of Old Common Stock as of December 10, 1998, 130,000
              shares, or 2%, of the New Common Stock issued on the Effective
              Date and New Warrants to purchase an additional 693,761 shares, or
              5%, of the New Common Stock issued on the Effective Date, on a
              fully diluted basis. Fractional shares of New Common Stock will
              not be issued in connection with the Plan. As a result of this
              provision, certain holders of Old Common Stock received no
              distribution of New Common Stock or New Warrants under the Plan.

               To the CSFB Affiliate, in respect of the Senior Notes owned by
              CSFB as of December 10, 1998, 8,090 shares of New Preferred Stock
              which, together with the 15,167 additional shares of New Preferred
              Stock purchased by the CSFB Affiliate as described above, are
              convertible into 4,765,165 shares of the New Common Stock. As a
              result of the New Preferred Stock received by the CSFB Affiliate,
              together with the 3,093,998 shares of New Common Stock received by
              the CSFB Affiliate in respect of the Convertible Notes owned by
              CSFB, the CSFB Affiliate beneficially owns approximately 56.6% of
              the New Common Stock on an as converted basis, assuming the
              exercise of all New Warrants and issuance of New Common Stock
              reserved under the 1999 Stock Option Plan as discussed below. The
              New Preferred Stock has a stated value of $1,000 per share and a
              cumulative annual dividend rate of $102.50 per share payable in
              January of each year in cash or by the issuance of additional
              shares of New Preferred Stock. The New Preferred Stock is
              convertible at any time into 204.8897 shares of New Common Stock
              at an initial conversion price of $4.88 per share of New Common
              Stock, subject to customary anti-dilution adjustments.

         RESERVATION OF ADDITIONAL NEW COMMON STOCK

               In connection with the New Warrants described above, 971,266
              shares of New Common Stock have been reserved for issuance upon
              the exercise of New Warrants. The New Warrants are exercisable at
              an initial exercise price of $9.04 per share of New Common Stock,
              subject to customary anti-dilution adjustments, and will expire on
              March 24, 2004.

               Pursuant to the Plan, up to 1,251,685 shares, or 10%, of the
              fully diluted number of shares of New Common Stock issued and
              outstanding on the Effective Date have been reserved for issuance
              to employees and directors, and up to 387,119 shares, or 3%, of
              the fully diluted number of shares of New Common Stock issued on
              the Effective Date have been reserved for issuance to the
              Company's marketing agents under the Company's 1999 Stock Option
              Plan, which was approved by the Company's shareholders.

NOTE 2 - SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES  INCLUDING  FRESH  START
         ACCOUNTING PRINCIPLES EFFECTIVE MARCH 31, 1999 FOR ASCENT
         BASIS OF PRESENTATION.

The accompanying  unaudited condensed  consolidated  financial statements of the
Company have been prepared in accordance with the  instructions to Form 10-Q and
Rule 10-01 of  Regulation  S-X and do not  include  all of the  information  and
footnotes  required by generally  accepted  accounting  principles  ("GAAP") for
complete financial statements.  Financial statements prepared in accordance with
GAAP require the use of management estimates. In the opinion of management,  all
adjustments  (consisting only of normal recurring accruals) considered necessary
for a fair presentation have been included.  Certain reclassifications have been
made  to  1998  amounts  in  order  to  conform  to  1999  financial   statement
presentation.  The financial  statements  should be read in conjunction with the
consolidated  financial  statements and notes thereto  included in the Company's
Annual Report on Form 10-K for the year ended December 31, 1998.

FRESH START ADJUSTMENTS. In accordance with the American Institute of Certified
Public Accountants' Statement of Position 90-7 ("SOP 90-7"), "Financial
Reporting by Entities in Reorganization Under the Bankruptcy Code," the Company
adopted fresh start reporting effective March 31, 1999. Fresh start reporting
requires the new reporting entity created on the reorganization effective date
to determine a reorganization book value. The reorganization book value is
allocated to the fair value of assets and liabilities similar to the purchase
method of accounting under APB 16. As a result of the application of fresh start
reporting, the financial statements of Ascent issued subsequent to the adoption
of fresh start reporting will not be comparable with those of Westbridge
prepared before adoption of fresh start accounting, including the historical
financial statements of Westbridge in this quarterly report. With the adoption
of fresh start accounting, the Company retained a fiscal accounting year ended
on December 31 of each year.

Ascent's reorganization book value was determined with the assistance of its
financial advisors. The significant factors used in the determination of
reorganization book value were analyses of industry, economic and overall market
conditions, historical and projected performance of the Company, and certain
financial analyses, including discounted future cash flows.


<PAGE>



The effects of the Plan and fresh start reporting on the Company's consolidated
balance sheet as of March 31, 1999 are as follows (in thousands):
<TABLE>
<CAPTION>

                                        WESTBRIDGE      Issue New       Issue New       Fresh Start        ASCENT
                                        03/31/1999    Preferred (a)     Common (b)      Adjustments(c)    03/31/1999
                                       -------------- -------------- ---------------- ----------------- --------------
<S>                                   <C>             <C>            <C>              <C>               <C>
ASSETS
Total investments                      $   126,932    $              $                $                 $   126,932
Cash                                         2,210                                                            2,210
Accrued investment income                    2,169                                                            2,169
Agent receivables, net                       8,182                                                            8,182
Deferred policy acquisition costs           15,039                                                           15,039
Deferred tax asset, net                      1,070                                              6,277         7,347
Other assets                                13,504                         (3,088)             (2,500)        7,916
                                       -------------- -------------- ---------------- ----------------- --------------
     Total assets                      $   169,106    $         -    $     (3,088)    $         3,777   $   169,795
                                       ============== ============== ================ ================= ==============

LIABILITIES, PREFERRED STOCK & EQUITY
Policy liabilities and accruals        $    95,806    $              $                $                 $    95,806
Accounts payable and accruals               18,790                                               (249)       18,541
Notes payable                                5,088                                                            5,088
Accrued dividends                            1,304                         (1,304)                                -
Accrued interest                            10,518         (3,257)         (7,261)                                -
Senior subordinated notes, net              19,523        (19,523)                                                -
Convertible subordinated notes              70,000                        (70,000)                                -
                                       -------------- -------------- ---------------- ----------------- --------------
     Total liabilities                     221,029        (22,780)        (78,565)               (249)      119,435

Old Series A preferred stock                11,935                        (11,935)                                -
New Series A preferred stock                               23,257                                            23,257
                                       -------------- -------------- ---------------- ----------------- --------------
     Total preferred stock                  11,935         23,257         (11,935)                  -        23,257

Old common stock                               703                           (703)                                -
New common stock                                                               65                                65
Additional paid in capital                  37,641                         91,138            (101,741)       27,038
Accumulated other comprehensive
  income, net of tax                         1,925                                             (1,925)            -
Retained earnings                         (104,127)          (477)         (3,088)            107,692             -
                                       -------------- -------------- ---------------- ----------------- --------------
     Total equity                          (63,858)          (477)         87,412               4,026        27,103
                                       -------------- -------------- ---------------- ----------------- --------------
     Total liabilities, preferred
       stock and equity                $   169,106    $         -    $     (3,088)    $         3,777   $   169,795
                                       ============== ============== ================ ================= ==============
</TABLE>

(a)  Reflects issuance of 23,257 shares of New Preferred Stock to CFSB for $15.2
     million in cash and exchange of Senior Notes held by CSFB, including
     accrued interest, for $8.1 million. Includes simultaneous retirement of
     Senior Notes held by holders other than CSFB, including accrued interest,
     for $15.2 million and write-off of unamortized debt discount of $0.5
     million.

(b)  Reflects issuance of 6,500,000 shares of New Common Stock in exchange for
     Convertible Notes, Old Preferred Stock, Old Common Stock and settlement of
     general unsecured claims. Includes 32,500 shares of New Common Stock issued
     to management on the Effective Date, and includes write-off of unamortized
     debt issuance costs of $3.1 million.

(c)  Reflects adjustments to record assets and liabilities at fair market value
     and to set retained earnings to zero.


<PAGE>



INVESTMENTS. The Company's fixed maturity portfolio is classified as
available-for-sale and is carried at estimated market value. Equity securities
(common and nonredeemable preferred stocks) are also carried at estimated market
value. With the application of fresh start reporting, the Company's marketable
securities book values under GAAP were adjusted to equal the market values of
such securities at March 31, 1999. Accordingly, the stockholders' equity section
of Ascent's March 31, 1999 fresh start balance sheet reflects a zero balance in
accumulated other comprehensive income. Changes in aggregate unrealized
appreciation or depreciation on fixed maturity and equity securities subsequent
to March 31, 1999 are reported directly in stockholders' equity, net of
applicable deferred income taxes and, accordingly, will have no effect on
current operations.

DEFERRED POLICY ACQUISITION COSTS ("DPAC"). Policy acquisition costs consisting
of commissions and other policy issue costs, which vary with and are primarily
related to the production of new business, are deferred and amortized over
periods not to exceed the estimated premium-paying periods of the related
policies. Also included in DPAC is the cost of insurance purchased on acquired
business. The amortization of these costs is based on actuarially estimated
future premium revenues, and the amortization rate is adjusted periodically to
reflect actual experience. Projected future levels of premium revenue are
estimated using assumptions as to interest, mortality, morbidity and withdrawals
consistent with those used in calculating liabilities for future policy
benefits. No changes were made to DPAC assumptions for purposes of fresh start
accounting.

FUTURE POLICY BENEFITS. Liabilities for future policy benefits not yet incurred
are computed primarily using the net level premium method including actuarial
assumptions as to investment yield, mortality, morbidity, withdrawals,
persistency and other assumptions which were appropriate at the time the
policies were issued. Assumptions used are based on the Company's experience as
adjusted to provide for possible adverse deviation. These estimates are
periodically reviewed and compared with actual experience. If it is determined
that future experience will probably differ significantly from that previously
assumed, the estimates are revised and any adjustments reflected in current
operations. No changes were made to such actuarial assumptions for purposes of
fresh start accounting.

CLAIM RESERVES. Claim reserves represent the estimated liabilities on claims
reported plus claims incurred but not yet reported. These liabilities are
subject to the impact of future changes in claim experience. As estimates are
revised, any adjustments are reflected in current operations. No changes were
made to claim reserve estimates for purposes of fresh start accounting.

FEDERAL INCOME TAXES. The Company records income taxes based on the asset and
liability approach, which requires the recognition of deferred tax liabilities
and assets for the expected future tax consequence of temporary differences
between the carrying amounts and the tax basis of assets and liabilities. The
tax effect of future taxable temporary differences (liabilities) and future
deductible temporary differences (assets) are separately calculated and recorded
when such differences arise. A valuation allowance, reducing any recognized
deferred tax asset, must be recorded if it is determined that it is more likely
than not that such deferred tax asset will not be realized. The deferred tax
asset at June 30 and March 31, 1999 is net of a valuation allowance of
approximately $16.9 million related principally to net operating loss
carryforwards ("NOLs") of Ascent's operating subsidiaries.

In connection with its reorganization, the Company realized a non-taxable gain
from the extinguishment of certain indebtedness for tax purposes, since the gain
results from a reorganization under the Bankruptcy Code. However, the Company is
required to reduce certain tax attributes of the holding company, including (i)
NOLs, (ii) certain tax credits and (iii) tax bases in assets in an amount equal
to such a gain on extinguishment.


<PAGE>



NOTE 3 - EARNINGS PER SHARE ("EPS")

Basic EPS is calculated by dividing income attributable to common shareholders
by the weighted average number of common shares outstanding ("average shares")
during the period. To obtain net income attributable to common shareholders for
EPS computations, preferred stock dividends are deducted from net income.
Diluted EPS reflects the potential dilution of average shares that could occur
if securities or other contracts to issue common stock were converted or
exercised. The following table reflects the calculation of basic and diluted
EPS:
<TABLE>
<CAPTION>

                                               ASCENT                                   WESTBRIDGE
                                          -----------------    ------------------------------------------------------------
                                             THREE MONTHS          THREE MONTHS         THREE MONTHS          SIX MONTHS
                                                ENDED                 ENDED                 ENDED                ENDED
                                            JUNE 30, 1999         MARCH 31, 1999        JUNE 30, 1998        JUNE 30, 1998
                                          -----------------    -------------------    ----------------     ----------------
                                                           (Amounts in thousands, except per share amounts)

<S>                                      <C>                   <C>                    <C>                 <C>
  Income (loss) applicable to common
     stockholders                           $       407            $       208          $   (3,087)          $   (8,524)
                                          =================      ================     ================     =================
  Basic and diluted earnings (loss)
     per share                              $       .06            $       .03          $     (.48)          $    (1.36)
                                          =================      ================     ================     =================
  Weighted average shares outstanding:
     Basic                                        6,500                  7,032               6,381                6,289
                                          =================      ================     ================     =================
     Diluted                                      6,530                  7,032               6,381                6,289
                                          =================    ===================    ================     =================
</TABLE>

NOTE 4 - COMPREHENSIVE INCOME

The Company's other comprehensive income consists of the unrealized appreciation
(depreciation) of marketable securities held net of tax. Comprehensive income
(loss), net of related tax, is as follows:

<TABLE>
<CAPTION>
                                                ASCENT                                  WESTBRIDGE
                                          -----------------    ------------------------------------------------------------
                                             THREE MONTHS          THREE MONTHS         THREE MONTHS          SIX MONTHS
                                                ENDED                 ENDED                 ENDED                ENDED
                                            JUNE 30, 1999         MARCH 31, 1999        JUNE 30, 1998        JUNE 30, 1998
                                          -----------------    -------------------    ----------------     ----------------
                                                                       (Amounts in thousands)

<S>                                      <C>                   <C>                   <C>                   <C>
Income (loss) applicable to common
     stockholders                              $      407        $        208          $    (3,087)          $   (8,524)
Other comprehensive loss
     Unrealized holding loss arising
       during period, net of tax                   (2,013)             (1,959)                 955                5,722
     Reclassification adjustment of loss
       (gain) on sales of fixed maturity
       and equity securities included in
       net income, net of tax                          41                 (27)                 (53)                (224)
                                          -----------------    -------------------    ----------------     ----------------
Comprehensive loss, net of tax                 $   (1,565)       $     (1,778)          $   (2,185)          $   (3,026)
                                          =================    ===================    ================     ================
</TABLE>



<PAGE>



NOTE 5 - COMMITMENTS AND CONTINGENCIES

In the normal course of its business operations, the Company is involved in
various claims and other business related disputes. In the opinion of
management, the Company is not a party to any pending litigation the disposition
of which would have a material adverse effect on the Company's business,
financial position or its results of operations.

NOTE 6 - IMPLEMENTATION OF NEW ACCOUNTING PRONOUNCEMENTS

In December 1997, the Accounting Standards Executive Committee ("AcSEC") issued
Statement of Position ("SOP") 97-3, "Accounting by Insurance and Other
Enterprises for Insurance-Related Assessments," which provides guidance on
accounting for insurance-related assessments. The Company adopted SOP 97-3 on a
prospective basis effective January 1, 1999. The adoption of SOP 97-3 did not
have a material impact on the Company's results of operations, liquidity or
financial position.

In March 1998, AcSEC issued SOP 98-1, "Accounting for the Costs of Software
Developed or Obtained for Internal Use," which requires capitalization of
certain costs after the date of adoption in connection with developing or
obtaining software for internal use. The Company adopted SOP 98-1 on a
prospective basis effective January 1, 1999. The adoption of SOP 98-1 did not
have a material impact on the Company's results of operations, liquidity or
financial position.

In 1998, the National Association of Insurance Commissioners ("NAIC") adopted
the Codification of Statutory Accounting Principles guidance, which will replace
the current Accounting Practices and Procedures manual as the NAIC's primary
guidance on statutory accounting. The NAIC is now considering amendments to the
Codification guidance that would also be effective upon implementation. The NAIC
has recommended an effective date of January 1, 2001. The Codification provides
guidance for areas where statutory accounting has been silent and changes
current statutory accounting in certain areas. It is not known whether the
insurance departments of the state of domicile of the Company's Insurance
Subsidiaries will adopt the Codification or whether those insurance departments
will make any changes to that guidance. The Company does not expect Codification
guidance, if adopted, to materially impact statutory surplus. However, the
actual effect of adoption could differ as changes are made to the Codification
guidance, prior to its recommended effective date of January 1, 2001.

NOTE 7 - SUBSEQUENT EVENTS

In August 1999, the Company amended its $20 million revolving loan facility (the
"Credit Agreement") with LaSalle Bank, National Association ("LaSalle"). The
Credit Agreement was reduced to a $7.5 million facility and the termination date
was extended to June 5, 2001 from June 5, 2000. Also, in July 1999, Ascent
Management, Inc. ("AMI") entered into a $3.3 million term loan agreement with
LaSalle secured by substantially all of AMI's assets and the guarantee of
Ascent. Principal is payable in 60 equal monthly installments beginning January
31, 2000.


<PAGE>



                             ASCENT ASSURANCE, INC.
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS



GENERAL

In connection with its emergence from Chapter 11 bankruptcy proceedings on March
24, 1999, Westbridge Capital Corp. ("Westbridge") changed its corporate name to
"Ascent Assurance, Inc." ("Ascent"). For additional information regarding the
reorganization and adoption of fresh start accounting, see Notes 1 and 2 to the
Condensed Consolidated Financial Statements included at Part 1, Item I.
References herein to the "Company" shall mean for all periods on or prior to
March 31, 1999, Westbridge Capital Corp. ("Westbridge") and its subsidiaries,
and for all periods on or after the close of business on March 31, 1999, Ascent
and its subsidiaries.

This discussion updates the "Management's Discussion and Analysis of Financial
Condition and Results of Operations" in the Company's 1998 Report on Form 10-K
and should be read in conjunction therewith. Statements contained in this
analysis and elsewhere in this document that are not based on historical
information are forward-looking statements and are based on management's
projections, estimates and assumptions. Management cautions readers regarding
its forward-looking statements (see "Forward-Looking Statements").

BUSINESS OVERVIEW

The Company derives its revenue primarily from premiums from its accident and
health insurance products and, to a significantly lesser extent, from fee and
service income, income earned on invested assets and gains on the sales or
redemptions of invested assets. The product lines currently marketed and
underwritten by the Company's insurance subsidiaries are Medical Expense
products and Specified Disease products. Medical Expense products are generally
designed to reimburse insureds for eligible expenses incurred for hospital
confinement, surgical expenses, physician services, outpatient services and the
cost of medicines. Specified Disease products include indemnity policies for
hospital confinement and convalescent care for treatment of specified diseases
and "event specific" policies, which provide fixed benefits or lump sum payments
upon diagnoses of certain types of internal cancer or other catastrophic
diseases. Historically, the Company's insurance subsidiaries have also
underwritten a significant amount of Medicare Supplement products. The
underwriting of Medicare Supplement products was curtailed due to the relatively
low margins for these products. Fee and service income is generated from (i)
commissions received by the Company for sales of managed care and senior
products underwritten primarily by unaffiliated managed care organizations, (ii)
telemarketing services, and (iii) printing services.


<PAGE>




OPERATING RESULTS

Results of operations for Ascent are reported for the three months ended June
30, 1999 and on a pro forma basis as if Ascent and Westbridge adopted fresh
start accounting on January 1, 1999 and operated as a single entity for the six
months ended June 30, 1999. The operating results for 1999 are compared to
Westbridge's results of operation for the corresponding periods in 1998.


<TABLE>
<CAPTION>
                                                        THREE MONTHS ENDED JUNE 30,         SIX MONTHS ENDED JUNE 30,
                                                     --------------------------------    -------------------------------
                                                          1999               1998             1999              1998
                                                     --------------     -------------    -------------     -------------
                                                         ASCENT           WESTBRIDGE       PRO FORMA         WESTBRIDGE
                                                                                             ASCENT

<S>                                                  <C>                <C>              <C>               <C>
Total premiums                                       $     29,574       $     35,251     $     59,522      $     72,690
                                                     --------------     -------------    -------------     -------------
Benefits and claims                                        21,733             25,412           43,532            53,848
Commissions                                                 2,163              5,779            4,553            12,298
Amortization of deferred policy acquisition costs             865                713            2,059             1,948
General and administrative expense                          4,688              5,614           10,167            11,316
Taxes licenses and fees                                     1,293              1,443            2,352             2,731
                                                     --------------     -------------    -------------     -------------
Total underwriting expenses                                30,742             38,961           62,663            82,141
                                                     --------------     -------------    -------------     -------------
     UNDERWRITING RESULTS                                  (1,168)            (3,710)          (3,141)           (9,451)
                                                     --------------     -------------    -------------     -------------
Fee and service income                                      3,871              4,037            7,910             8,099
Fee and service expenses                                   (3,259)            (4,207)          (7,027)           (8,485)
                                                     --------------     -------------    -------------     -------------
     FEE AND SERVICE RESULTS                                  612               (170)             883              (386)
                                                     --------------     -------------    -------------     -------------
Net investment income                                       2,333              3,192            4,895             6,358
Net realized gain (loss) on investments                       (63)               267              (22)              529
Interest expense on notes payable                             (93)              (235)            (212)             (527)
Interest expense on retired/canceled debt                       -             (1,889)               -            (3,777)
Reorganization expenses                                         -             (1,084)               -            (2,100)
                                                     --------------     -------------    -------------     -------------
     INCOME (LOSS) BEFORE INCOME TAXES                      1,621             (3,629)           2,403            (9,354)
Income tax (expense) benefit                                 (567)               480             (841)            1,239
                                                     --------------     -------------    -------------     -------------
     NET INCOME (LOSS)                               $      1,054       $     (3,149)    $      1,562      $     (8,115)
                                                     ==============     =============    =============     =============
UNDERWRITING RATIOS
  Benefits and claims                                       73.5%              72.1%            73.1%             74.1%
  Commissions                                                7.3%              16.4%             7.6%             16.9%
  Amortization of deferred policy acquisition costs          2.9%               2.0%             3.5%              2.7%
  General and administrative expenses                       15.9%              15.9%            17.1%             15.6%
  Taxes, licenses and fees                                   4.4%               4.1%             4.0%              3.8%

</TABLE>


OVERVIEW. Pre-tax income for the second quarter of 1999 was $1.6 million
compared to a loss of $3.6 million for the second quarter of 1998. The increase
in pre-tax income was primarily attributable to a $2.5 million improvement in
underwriting results, a $1.8 million decline in interest expense on debt
retired/canceled on March 24, 1999 and a $1.0 million decrease in reorganization
expenses.


<PAGE>


For the first six months of 1999, pre-tax income was $2.4 million compared to a
$9.4 million loss for the six months ended June 30, 1998. A $6.4 million
improvement in underwriting results, a $1.3 million increase in fee and service
results, a $3.8 million decrease in interest expense on debt retired/canceled
and a $2.1 million decline in reorganization expenses were the principal
contributors to the improvement in pre-tax income.

The following narratives discuss the principal components of underwriting
results and net investment income.

PREMIUMS.  Premiums, in thousands, for each major product line are set forth
below:


<TABLE>
<CAPTION>
                                               Three Months Ended June 30,              Six Months Ended June 30,
                                             --------------------------------       -----------------------------------
                                                  1999              1998                 1999               1998
                                             ---------------    -------------       ---------------    ----------------
                                                 Ascent          Westbridge           Pro forma          Westbridge
                                                                                        Ascent
<S>                                          <C>                <C>                 <C>                <C>
     Medical Expense:
         First-year                           $     3,566        $     3,696         $     6,363        $     9,406
         Renewal                                   10,316             12,704              21,601             25,030
                                             ---------------    -------------       ---------------    ----------------
              Subtotal                             13,882             16,400              27,964             34,436
                                             ---------------    -------------       ---------------    ----------------
     Specified Disease:
         First-year                                   340                520                 637              1,063
         Renewal                                    7,067              7,561              14,335             15,285
                                             ---------------    -------------       ---------------    ----------------
              Subtotal                              7,407              8,081              14,972             16,348
                                             ---------------    -------------       ---------------    ----------------
     Medicare Supplement:
         First-year                                    (5)               430                  22              1,186
         Renewal                                    8,157             10,144              16,291             20,339
                                             ---------------    -------------       ---------------    ----------------
              Subtotal                              8,152             10,574              16,313             21,525
                                             ---------------    -------------       ---------------    ----------------
     Other                                            133                196                 273                381
                                             ---------------    -------------       ---------------    ----------------
              Total Premium Revenue           $    29,574        $    35,251         $    59,522        $    72,690
                                             ===============    =============       ===============    ================
</TABLE>


Total premiums decreased $5.7 million in the second quarter of 1999 as compared
to the second quarter of 1998 due to a $0.8 million, or 16%, decrease in first
year premiums and a $4.9 million, or 16%, decrease in renewal premiums. The
decrease in first year premiums consists of a decrease in Medicare Supplement
premiums of $0.5 million, or approximately 100%, and a decrease in Specified
Disease premiums of $0.2 million, or 35%. The decrease in renewal premiums was
comprised of a $2.4 million, or 19%, decrease in Medical Expense premiums, a
$1.9 million, or 19%, decrease in Medicare Supplement premiums and $0.5 million,
or 7%, decrease in Specified Disease premiums.

For the six months ended June 30, 1999, total premiums decreased $13.2 million,
or 18%, from the comparable period for 1998. The decrease resulted from a $4.7
million, or 40%, decrease in first year premiums and a decrease in renewal
premiums of $8.5 million, or 14%. The decrease in first year premium was
comprised of a $3.0 million, or 32%, decrease in Medical Expense premiums, a
$1.2 million, or 98%, decrease in Medicare Supplement premiums and a $0.4
million, or 40%, decrease in Specified Disease premiums. The decrease in renewal
premiums consists of a $4.0 million, or 20% decrease in Medicare Supplement
premiums, a $3.4 million, or 14%, decrease in Medical Expense premiums and a
$1.0 million, or 7%, decrease in Specified Disease premiums.

In general, first year premiums declined due to the restructuring of the
Company's marketing operation in mid-1998, which included the discontinuance of
certain products. Renewal premiums declined due to the implementation of premium
rate increases on less profitable blocks of business which decreased
persistency.

BENEFITS AND CLAIMS. Benefits and claims are comprised of claims paid, changes
in claim reserves for claims incurred (whether or not reported) and changes in
future policy benefit reserves. For the second quarter of 1999, the 1.4
percentage point increase in the ratio of benefits and claims to premium
compared to the second quarter of 1998 was due primarily to unfavorable
experience in the Major Medical and Specified Disease lines of business. For the
six months ended June 30, 1999, the 1.0 percentage point decrease in the ratio
of benefits and claims to premium in comparison to the six months ended June 30,
1998 was due to favorable experience in the Medicare Supplement line of
business.

COMMISSIONS. The 9.1 percentage point decrease in the ratio of commissions to
premium improved underwriting results by approximately $2.7 million in the
second quarter of 1999 as compared to 1998. For the six months ended June 30,
1999, the percentage point decrease of 9.3 percentage points in the ratio of
commissions to premium from 1998 improved underwriting results by approximately
$5.5 million. The improvement in the commission rate is attributable to the
decrease in first-year premiums which carry a higher commission rate, the
implementation of premium rate increases that are not commissionable and the
consolidation of the company's marketing structure from fragmented general
agency operations into a single career agency force in mid-1998.

GENERAL AND ADMINISTRATIVE EXPENSE. General and administrative expenses are
semi-variable with premium as a number of infrastructure costs are fixed. The
1.5 percentage point increase in the ratio of general and administrative
expenses to premium for the six months ended June 30, 1999 as compared to 1998
is principally attributable to the decline in premium volume in 1999.

INVESTMENT INCOME. Net investment income decreased by $0.9 million, or 27%, for
the second quarter of 1999 as compared to 1998 and decreased by $1.5 million, or
23%, for the six months ended June 30, 1999 as compared to 1998 due to an 18%
decrease in invested assets and decreased interest income from agent
receivables.

FINANCIAL CONDITION

The following discussion provides management's assessment of financial condition
at June 30, 1999 as compared to March 31, 1999, the date of adoption of fresh
start accounting.

INVESTMENTS. The following table summarizes the Company's fixed maturity
securities, excluding short-term investments and certificates of deposit. All of
the Company's fixed maturity securities are classified as available-for-sale and
are carried at estimated market value. Estimated market value represents the
closing sales prices of marketable securities. Investments in the debt
securities of corporations are principally in publicly-traded bonds.

<TABLE>
<CAPTION>
                                                         June 30, 1999                        March 31, 1999
                                               ----------------------------------     --------------------------------
                                                    Market                                Market
FIXED MATURITY SECURITIES                           Value                %                Value                %
-------------------------------------------    -----------------    -------------     ---------------     ------------
                                                        (in thousands)                        (in thousands)

<S>                                            <C>                  <C>               <C>                 <C>
U.S. Government and governmental
   agencies and authorities (except
   mortgage-backed)                              $      11,378           10.4           $    11,271             9.7
Finance                                                 28,515           26.1                31,525            27.1
Public utilities                                        12,122           11.1                12,745            11.0
Mortgage-backed                                          6,517            6.0                 7,349             6.3
States, municipalities and political
   subdivisions                                          1,940            1.8                 1,543             1.3
All other corporate bonds                               48,732           44.6                51,919            44.6
                                                ---------------     -------------     ---------------     ------------
   Total fixed maturity securities               $     109,204          100.0           $   116,352           100.0
                                               =================    =============     ===============     ============
</TABLE>

The following table indicates by rating the composition of the Company's fixed
maturity securities portfolio, excluding short-term investments and certificates
of deposit. Ratings are the lower of those assigned primarily by Standard &
Poor's and Moody's, when available, and are shown in the table using the
Standard & Poor's rating scale. Unrated securities are assigned ratings based on
the applicable National Association of Insurance Commissioner's ("NAIC")
designation or the rating assigned to comparable debt outstanding of the same
issuer. NAIC 1 fixed maturity securities have been classified as "A" and NAIC 2
fixed maturity securities have been classified as "BBB".

<TABLE>
<CAPTION>
                                                           June 30, 1999                      March 31, 1999
                                                  --------------------------------    --------------------------------
COMPOSITION OF FIXED MATURITY                          Market                              Market
SECURITIES BY RATING                                   Value                %               Value               %
---------------------------------------------     -----------------     ----------    ------------------    ----------
                                                          (in thousands)                      (in thousands)

<S>                                               <C>                   <C>           <C>                   <C>
RATINGS
Investment grade:
   U.S. Government and agencies                     $    17,895             16.4        $      17,677           15.2
   AAA                                                    2,111              1.9                2,902            2.5
   AA                                                     9,435              8.6                9,685            8.3
   A                                                     37,734             34.6               40,382           34.7
   BBB                                                   35,173             32.2               42,237           36.3
Non-Investment grade:
   BB                                                     2,419              2.2                1,317            1.1
   B and below                                            4,437              4.1                2,152            1.9
                                                  -----------------     ----------    ------------------    ----------
     Total fixed maturity securities                $   109,204            100.0        $     116,352          100.0
                                                  =================     ==========    ==================    ==========
</TABLE>

The scheduled contractual maturities of the Company's fixed maturity securities,
excluding short-term investments and certificates of deposit, at June 30, 1999
and March 31, 1999 are shown in the table below. Expected maturities may differ
from contractual maturities because borrowers may have the right to call or
prepay obligations with or without penalties.

<TABLE>
<CAPTION>
                                                           June 30, 1999                      March 31, 1999
                                                  --------------------------------    --------------------------------
COMPOSITION OF FIXED MATURITY                          Market                              Market
SECURITIES BY MATURITY                                 Value                %               Value               %
---------------------------------------------     -----------------     ----------    ------------------    ----------
                                                          (in thousands)                      (in thousands)

<S>                                               <C>                   <C>           <C>                   <C>
SCHEDULED MATURITY
Due in one year or less                             $       602              0.5        $         712            0.6
Due after one year through five years                    29,620             27.1               37,503           32.2
Due after five years through ten years                   36,650             33.6               37,550           32.3
Due after ten years                                      35,815             32.8               33,238           28.6
Mortgage-backed securities                                6,517              6.0                7,349            6.3
                                                  -----------------     ----------    ------------------    ----------
     Total fixed maturity securities                $   109,204            100.0        $     116,352          100.0
                                                  =================     ==========    ==================    ==========
</TABLE>


CLAIM RESERVES. Claim reserves are established by the Company for benefit
payments which have already been incurred by the policyholder but which have not
been paid by the Company. Claim reserves totaled $38.4 million at June 30, 1999
as compared to $41.1 million at March 31, 1999. The process of estimating claim
reserves involves the active participation of experienced actuarial consultants
with input from the underwriting, claims, and finance departments. The inherent
uncertainty in estimating claim reserves is increased when significant changes
occur. Examples of such changes include: (1) changes in economic conditions; (2)
changes in state or federal laws and regulations, particularly insurance reform
measures; (3) changes in production sources for existing lines of business; and
(4) writings of significant blocks of new business. Because claim reserves are
estimates, management monitors reserve adequacy over time, evaluating new
information as it becomes available and adjusting claim reserves as necessary.
Such adjustments are reflected in current operations.

Management considers many factors when setting reserves including: (1)
historical trends; (2) current legal interpretations of coverage and liability;
(3) loss payments and pending levels of unpaid claims; and (4) product mix.
Based on these considerations, management believes that adequate provision has
been made for the Company's claim reserves. Actual claims paid may deviate,
perhaps substantially, from such reserves.

FUTURE POLICY BENEFIT RESERVES. Future policy benefit reserves are established
by the Company for benefit payments that have not been incurred but which are
estimated to be incurred in the future. Future policy benefit reserves totaled
$55.8 million at June 30, 1999 as compared to $54.7 million at March 31, 1999.
Future policy benefit reserves are calculated according to the net level premium
reserve method and are equal to the discounted present value of the Company's
expected future policyholder benefits minus the discounted present value of its
expected future net premiums. These present value determinations are based upon
assumed fixed investment yields, the age of the insured(s) at the time of policy
issuance, expected morbidity and persistency rates, and expected future
policyholder benefits.

In determining the morbidity, persistency rate, claim cost and other assumptions
used in determining the Company's future policy benefit reserves, the Company
relies primarily upon its own benefit payment history and upon information
developed in conjunction with actuarial consultants and industry data. The
Company's persistency rates have a direct impact upon its policy benefit
reserves because the determinations for this reserve are, in part, a function of
the number of policies in force and expected to remain in force to maturity. If
persistency is higher or lower than expected, future policyholder benefits will
also be higher or lower because of the different than expected number of
policies in force, and the policy benefit reserves will be increased or
decreased accordingly.

In accordance with GAAP, the Company's actuarial assumptions are generally
fixed, and absent materially adverse benefit experience, they are not generally
adjusted. The Company monitors the adequacy of its policy benefit reserves on an
ongoing basis by periodically analyzing the accuracy of its actuarial
assumptions. The adequacy of the Company's policy benefit reserves may also be
impacted by the development of new medicines and treatment procedures which may
alter the incidence rates of illness and the treatment methods for illness and
accident (such as out-patient versus in-patient care) or prolong life
expectancy. Changes in coverage provided by major medical insurers or government
plans may also affect the adequacy of the Company's reserves if, for example,
such developments had the effect of increasing or decreasing the incidence rate
and per claim costs of occurrences against which the Company insures. An
increase in either the incidence rate or the per claim costs of such occurrences
could result in the Company needing to post additional reserves, which could
have a material adverse effect upon its business, financial condition or results
of operations.

LIQUIDITY, CAPITAL RESOURCES AND STATUTORY CAPITAL AND SURPLUS

ASCENT. Ascent's principal assets consist of the capital stock of its operating
subsidiaries and invested assets. Accordingly, Ascent's sources of funds are
primarily comprised of dividends from its operating subsidiaries, advances and
management fees from its non-insurance subsidiaries, and tax payments under a
tax sharing agreement among Ascent and its subsidiaries. As of June 30, 1999,
Ascent held approximately $7.4 million in unrestricted cash and invested assets.

Dividends paid by the insurance subsidiaries are determined by and subject to
the regulations of the insurance laws and practices of the insurance departments
of their respective state of domicile. National Foundation Life Insurance
Company ("NFL"), a Delaware domestic company, may not declare or pay dividends
from any source other than earned surplus without the Delaware Insurance
Commissioner's approval. The Delaware Insurance Code defines earned surplus as
the amount equal to the unassigned funds as set forth in NFL's most recent
statutory annual statement including surplus arising from unrealized gains or
revaluation of assets. Delaware insurance companies may generally pay ordinary
dividends or make distributions of cash or other property within any twelve
month period with a fair market value equal to or less than the greater of 10%
of surplus as regards policyholders as of the preceding December 31 or the net
gain from operations for the twelve month period ending on the preceding
December 31. During 1999, NFL is precluded from paying dividends without the
prior approval of the Delaware Insurance Commissioner, as its December 31, 1998
earned surplus was negative. Further, NFL has agreed to obtain prior approval
for any future dividends.

National Financial Insurance Company ("NFIC") and American Insurance Company of
Texas ("AICT"), Texas domestic companies, may make dividend payments from
surplus profits or earned surplus arising from its business. The Texas Insurance
Code defines earned surplus as unassigned surplus excluding any unrealized
gains. Texas life insurance companies may generally pay ordinary dividends or
make distributions of cash or other property within any twelve month period with
a fair market value equal to or less than the greater of 10% of surplus as
regards policyholders as of the preceding December 31 or the net gain from
operations for the twelve month period ending on the preceding December 31. Any
dividend exceeding the applicable threshold is considered extraordinary and
requires prior approval of the Texas Insurance Commissioner. NFIC's and AICT's
earned surplus at December 31, 1998 was negative, and as such, each company is
precluded from paying dividends during 1999 without the prior approval of the
Texas Insurance Commissioner.

Freedom Life Insurance Company ("FLICA"), a Mississippi domestic company, may
make dividend payments only from its actual net surplus computed as required by
law in its statutory annual statement. Mississippi life insurance companies may
generally pay ordinary dividends or make distributions of cash or other property
within any twelve month period with a fair market value not exceeding the lesser
of 10% of surplus as regards policyholders as of the preceding December 31 or
the net gain from operations for the twelve month period ending on the preceding
December 31. Any dividend exceeding the applicable threshold amount requires
prior approval of the Mississippi Insurance Commissioner. FLICA is precluded
from paying dividends to NFL during 1999 without the prior approval of the
Mississippi Insurance Commissioner as it recorded a net loss from operations for
the year ended December 31, 1998.

Generally, all states require insurance companies to maintain statutory capital
and surplus that is reasonable in relation to their existing liabilities and
adequate to their financial needs. Delaware, Texas and Mississippi also maintain
discretionary powers relative to the declaration and payment of dividends based
upon an insurance company's financial position. In light of the statutory losses
incurred by the insurance subsidiaries during 1997 and 1998, Ascent does not
expect to receive any dividends from its insurance subsidiaries for the
foreseeable future. In addition, as discussed further below, the insurance
subsidiaries may require capital contributions from Ascent to maintain adequate
statutory capital and surplus.

INSURANCE SUBSIDIARIES. The primary sources of cash for the insurance
subsidiaries are premiums and income on invested assets. Additional cash is
periodically provided by capital contributions from Ascent and from the sale of
short-term investments and could, if necessary, be provided through the sale of
long-term investments and blocks of business. The insurance subsidiaries'
primary uses for cash are benefits and claims, commissions, general and
administrative expenses, and taxes, licenses and fees.

During 1997 and 1998, the insurance subsidiaries experienced adverse loss ratios
and declining persistency on certain old Medical Expense and Medicare Supplement
products. During 1998, the insurance subsidiaries developed new insurance
products with more stringent underwriting procedures and lower agent
commissions. In addition, the insurance subsidiaries are implementing rate
increases to the extent approved by state regulatory authorities or offering
higher deductible benefit options on certain old lines of business in order to
mitigate the effect of adverse claims experience on such old lines. The
insurance subsidiaries also implemented a policyholder retention program
designed to mitigate the impact of declining persistency on such old lines
receiving rate increases. However, the Company expects that the insurance
subsidiaries will continue to incur operating losses on these old lines of
business (i) until such time as the necessary rate increases can be fully
implemented and realized, and (ii) until sales of new products reach targeted
production levels. There can be no assurance that the impact of any additional
rate increases approved will result in consistent profitability on such old
lines, or that targeted production levels will be reached and sustained. For the
six months ended June 30, 1999 and 1998, the insurance subsidiaries received
capital contributions totaling approximately $0.4 million and $4.4 million,
respectively, from Ascent. To the extent that the insurance subsidiaries
experience further statutory operating losses, additional capital may be
required.

In December 1992, the NAIC adopted the Risk-Based Capital for Life and/or Health
Insurers Model Act ("the Model Act"). The Model Act provides a tool for
insurance regulators to determine the levels of statutory capital and surplus an
insurer must maintain in relation to its insurance and investment risks and
whether there is a need for possible regulatory attention. The Model Act (or
similar legislation or regulation) has been adopted in states where the
insurance subsidiaries are domiciled. The Model Act provides four levels of
regulatory attention, varying with the ratio of the insurance company's total
adjusted capital (defined as the total of its statutory capital and surplus,
asset valuation reserve and certain other adjustments) to its risk-based capital
("RBC"). If a company's total adjusted capital is less than 100 percent but
greater than or equal to 75 percent of its RBC, or if a negative trend (as
defined by the NAIC) has occurred and total adjusted capital is less than 125
percent of RBC (the "Company Action Level"), the company must submit a
comprehensive plan aimed at improving its capital position to the regulatory
authority proposing corrective actions. If a company's total adjusted capital is
less than 75 percent but greater than or equal to 50 percent of its RBC (the
"Regulatory Action Level"), the regulatory authority will perform a special
examination of the company and issue an order specifying the corrective actions
that must be followed. If a company's total adjusted capital is less than 50
percent but greater than or equal to 35 percent of its RBC (the "Authorized
Control Level"), the regulatory authority may take any action it deems
necessary, including placing the company under regulatory control. If a
company's total adjusted capital is less than 35 percent of its RBC (the
"Mandatory Control Level"), the regulatory authority must place the company
under its control. The NAIC's requirements are effective on a state by state
basis if, and when, they are adopted by the regulators in the respective states.
The Insurance Departments of the States of Delaware and Mississippi have each
adopted the NAIC's Model Act. At June 30, 1999, total adjusted capital for NFL,
a Delaware domiciled company, and FLICA, a Mississippi domiciled company,
exceeded the respective Company Action Levels.

The Texas Department of Insurance ("TDI") has adopted its own RBC requirements,
the stated purpose of which is to require a minimum level of statutory capital
and surplus to absorb the financial, underwriting and investment risks assumed
by an insurer. Texas' RBC requirements differ from those adopted by the NAIC in
two principal respects: (i) they use different elements to determine minimum RBC
levels in their calculation formulas and (ii) they do not stipulate "Action
Levels" (like those adopted by the NAIC) where corrective actions are required.
However, the Commissioner of the TDI does have the power to take similar
corrective actions if a company does not maintain the required minimum level of
statutory capital and surplus. NFIC and AICT are domiciled in Texas and must
comply with Texas RBC requirements. At June 30, 1999, AICT's RBC exceeded the
minimum level prescribed by the TDI; however, NFIC's RBC was below the minimum
level prescribed by the TDI.

As a result of the statutory losses sustained by the Insurance Subsidiaries
during 1997 and 1998, material transactions are subject to approval by the
department of insurance in each domiciliary state.

CONSOLIDATED. The Company's consolidated net cash used for operations totaled
$1.8 million for the second quarter 1999. The use of the cash from operations
was primarily attributable to the payment of accrued reorganization expenses of
$1.7 million and new system replacement costs of $2.2 million. This decrease was
offset in part by the company generating net income from operations of $0.4
million for the second quarter of 1999 and a decrease in receivables of $1.9
million.

Net cash provided by investing activities for the second quarter 1999 totaled
$3.1 million. The cash provided by investment activities was used to fund
operational and financing activities.

Net cash used for financing activities totaled $1.6 million for the second
quarter of 1999. In the ordinary course of operations, financing activities
relate primarily to the net borrowings and repayments associated with the
Company's receivables financing program. During the second quarter 1999, the
Company paid approximately $3.0 million of principal and made new borrowings of
$1.4 million.

In the ordinary course of business, the Company advances commissions on policies
written by its general agencies and their agents. The Company is reimbursed for
these advances from the commissions earned over the respective policy's life. In
the event that policies lapse prior to the time the Company has been fully
reimbursed, the general agency or the individual agents, as the case may be, are
responsible for reimbursing the Company for the balance of the commission
advance.

The Company finances a substantial part of its obligations to make commission
advances through Ascent Funding, Inc. ("AFI") (formerly, Westbridge Funding
Corp.), an indirect wholly owned subsidiary of Ascent. On June 6, 1997, AFI
entered into a Credit Agreement (the "Credit Agreement") with LaSalle. This
Credit Agreement provides AFI with a three year revolving loan facility (the
"Receivables Financing"), the proceeds of which are used to purchase agent
advance receivables from the Insurance Subsidiaries and certain affiliated
marketing companies. In August 1999, the Company amended the Credit Agreement
with LaSalle to reduce the revolving loan facility from $20 million to $7.5
million and extend the termination date to June 5, 2001 from June 5, 2000.

Under this commission advancing program, the Company's receivables from
subagents totaled approximately $6.9 million and approximately $3.5 million was
outstanding under the Credit Agreement at June 30, 1999. AFI's obligations under
the Credit Agreement are secured by liens upon substantially all of AFI's
assets. Furthermore, Ascent has guaranteed AFI's obligations under the credit
agreement, and has pledged all of the issued and outstanding shares of the
capital stock of AFI, NFL and NFIC as collateral for that guaranty (the
"Guaranty Agreement"). As of June 30, 1999, there were no events of default
under the Credit or Guaranty Agreements.

In July 1999, Ascent Management, Inc. ("AMI") received a $3.3 million term loan
facility with LaSalle proceeds of which were used to fund system replacement
costs. Advances under the term loan facility are secured by substantially all of
AMI's assets and the Guaranty Agreement. Under the terms of the loan, principal
is payable in 60 equal monthly installments beginning January 31, 2000.

YEAR 2000

The Company has initiated an enterprise-wide program designed to determine
whether all of its Information Technology ("I/T"), such as computer systems and
related software applications, and non-I/T systems, such as facsimile machines
and copy machines, will function properly as the millennium (the "Year 2000")
approaches. The Year 2000 problem is pervasive and complex as virtually every
computer operation will be affected in some way by the rollover of the two-digit
year value to 00. The issue is whether computer systems will properly recognize
date-sensitive information when the year changes to 2000. Systems that do not
properly recognize such information could generate erroneous data or cause a
system to fail.

The Company is highly reliant upon computer systems and software, as are many of
the Company's principal businesses with which it interacts. The Company's
ability to service its policyholders and agents is dependent upon accurate and
timely transaction reporting. Transaction reporting in turn is dependent upon
the Company's highly complex interdependent computer hardware, software,
telecommunications and desktop applications, and the information obtained from
its critical business partners.

The Company's overall Year 2000 remediation effort has focused on preparing the
computer systems, infrastructure and facilities for the Year 2000. The following
phases encompass the Year 2000 plan: (i) assessment of all internal and external
business critical systems, including I/T and non-I/T systems, (ii) remediation
or upgrading of business critical systems, (iii) testing of remediated and
updated systems, (iv) implementation of remediated and updated systems, and (v)
contingency planning.

The Company has engaged certain outside vendors and dedicated certain employees
on a full time basis to help in the full array of its Year 2000 efforts. This
includes system assessment and monitoring advice, actual code remediation,
communication and consultation with critical business partners and testing
resources.

Under the Company's enterprise-wide remediation program, the most effective I/T
systems solution was to purchase a new, more modern, Year 2000 compliant
policyholder and claim administration system. This replacement effort is well
underway and targeted for implementation in November of 1999.

The Company has also completed the assessment of its non-I/T systems and is
currently testing those systems. The non-I/T systems were prioritized to
remediate critical systems early in 1999 and non-critical systems later in the
year.

Another significant component of the Company's enterprise-wide remediation
effort is to determine whether critical business partners and vendors are Year
2000 compliant. The assessment and testing of the Year 2000 readiness of these
critical business partners and vendors have been integrated with the Company's
I/T and non-I/T Year 2000 system strategies. As a part of this process, the
Company has written letters and corresponded with its outside vendors and
critical business partners to determine whether they are also prepared for the
Year 2000.

The Company's contingency plan is to make the existing I/T systems, which are to
be replaced, Year 2000 compliant. This effort is currently in the testing phases
of the project and is scheduled to be completed during the third quarter of
1999. The Company's contingency plan has identified and prioritized the Year
2000 exposures within the existing I/T systems. By remediating these I/T
exposures on a priority basis, the Company is working to limit its Year 2000
contingency risk to lower priority I/T exposures in the event that the Company's
most reasonably likely worst case Year 2000 scenario were to occur.

The most reasonably likely worst case Year 2000 scenario would be that certain
functions within the Company's existing I/T systems would incorrectly process
policy information such as policy paid-to-dates, premium billings, commissions
and claims. This scenario could have a material, adverse impact on the Company's
ability to conduct its business.

The Company expects to incur approximately $4.0 to $5.0 million in total charges
related to computer hardware and software, infrastructure, and facilities
enhancements necessary to prepare for the Year 2000, of which a portion may be
capitalized. For the six months ended June 30, 1999, the Company incurred
approximately $2.6 million in costs related to the Company's Year 2000
remediation plans. The majority of the Company's Year 2000 costs relate to
computer hardware and software purchases and consulting fees, with the remainder
of the costs to occur primarily in the third quarter of 1999.

The Company expects its Year 2000 program to be completed in a timely manner;
however, the Year 2000 computer problem creates risk for the Company from
unforeseen problems in its own computer systems and from third parties with whom
the Company deals on financial transactions. Such potential, unforeseen problems
in the Company's and/or third parties' computer systems could have a material,
adverse impact on the Company's ability to conduct its business.

FORWARD-LOOKING STATEMENTS

The Private Securities Litigation Reform Act of 1995 provides a "safe harbor"
for forward-looking statements. The preceding statements and certain other
statements contained in Part 1, Item 1 - Financial Statements and Part 1, Item 2
- Management's Discussion and Analysis of Results of Operation and Financial
Condition, are forward-looking statements. These forward-looking statements are
based on the intent, belief or current expectations of the Company and members
of its senior management team. While the Company believes that its expectations
are based on reasonable assumptions within the bounds of its knowledge of its
business and operations, prospective investors are cautioned that any such
forward-looking statements are not guarantees of future performance, and involve
risks and uncertainties, and that actual results may differ materially from
those contemplated by such forward-looking statements.

Important factors known to management that could cause actual results to differ
materially from those contemplated by the forward-looking statements in this
Report include, but are not limited to:

          the effect of economic and market conditions

          further adverse  developments with respect to the Company's  liquidity
          position or operations of the Company's various businesses

          actions that may be taken by insurance regulatory authorities

          adverse developments in the timing or results of the Company's current
          strategic business plan

          the difficulty in controlling  health care costs and  integrating  new
          operations

          the ability of the Company to realize anticipated general and
          administrative expense savings and overhead reductions from system
          replacement initiatives

          the  ability  of the  Company to return the  Company's  operations  to
          profitability

          and the possible negative effects of prospective health care reform.

Additional factors that would cause actual results to differ materially from
those contemplated within this report can also be found in the Company's reports
to the Securities and Exchange Commission ("SEC") on Form 8-K during 1999 and
Form 10-K for the year ended December 31, 1998. Subsequent written or oral
statements attributable to the Company or persons acting on its behalf are
expressly qualified in their entirety by the cautionary statements in this
Report and those in the Company's reports previously filed with the SEC. Copies
of these filings may be obtained by contacting the Company or the SEC.


<PAGE>



                             ASCENT ASSURANCE, INC.
                      (FORMERLY, WESTBRIDGE CAPITAL CORP.)
                                     PART II


ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

           On June 16, 1999, Ascent Assurance, Inc. held its annual meeting of
           shareholders. At the meeting, the shareholders elected two directors
           of the Company, ratified the selection of PricewaterhouseCoopers LLP
           as the Company independent accountants, and approved the 1999 Stock
           Option Plan.

           The shareholders elected John H. Gutfreund and Michael A. Kramer to
           serve on the Company's Board of Directors for a three year term
           expiring in 2002. The following table reflects the votes cast at the
           annual meeting:

<TABLE>
<CAPTION>
                                                          For               Against             Withheld
                                                    ---------------     ----------------    -----------------
<S>                                                    <C>                     <C>                <C>
                  John F. Gutfreund                    5,851,773               0                  2,951
                  Michael A. Kramer                    5,851,775               0                  2,949

                       Total Votes Cast:               5,854,724
</TABLE>

           Directors whose terms continued and the years in which their term
expires are as follows:


                  Director                           Term Expiration
                  ---------------------------      --------------------
                  Richard H. Hershman                      2000
                  Patrick J. Mitchell                      2001
                  Robert A. Peiser                         2000
                  James K. Steen                           2001
                  Paul E. Suckow                           2001

           The Company's Board of Directors selected the firm of
           PricewaterhouseCoopers LLP as the independent accountants of the
           Company for 1999. At the annual meeting, the shareholders ratified
           the Board of Director's selection. Out of the total votes cast;
           5,850,629 voted for; 2,448 voted against; and 1,647 abstained from
           voting.

           The 1999 Stock Option Plan ("Plan") was the final item voted upon by
           the shareholders at the annual meeting. This Plan provides for stock
           option grants of Common Stock to certain officers, directors and
           agents of the Company and its subsidiaries. The shareholders approved
           the Plan by 3,914,053 votes for the Plan over 162,243 votes against,
           20,656 votes abstained, and 1,757,772 non-votes.
<PAGE>

                             ASCENT ASSURANCE, INC.
                      (FORMERLY, WESTBRIDGE CAPITAL CORP.)
                                     PART II


ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K

(a)  EXHIBITS

The following exhibits are filed herewith. Exhibits incorporated by reference
are indicated in the parentheses following the description.

2.1  First  Amended Plan of  Reorganization  of Westbridge  Capital Corp.  Under
     Chapter  11  of  the  Bankruptcy   Code,  dated  as  of  October  30,  1998
     (incorporated  by reference to Exhibit 2 to the Company's Form 8-K filed on
     September 21, 1998).

2.2  Amended  Disclosure  Schedule   Accompanying  the  First  Amended  Plan  of
     Reorganization  of  Westbridge  Capital  Corp.  under  Chapter  11  of  the
     Bankruptcy  Code  (incorporated  by reference to Exhibit 2 to the Company's
     Form 8-K filed on September 21, 1998).

2.3  Findings  of Fact,  Conclusions  of Law,  and  Order  confirming  the First
     Amended Plan of  Reorganization  of Westbridge  Capital Corp. dated October
     30,  1998,  as  modified  (incorporated  by  reference  to Exhibit 2 to the
     Company's Form 8-K filed on December 29, 1998).

3.1  Second  Amended and Restated  Certificate of  Incorporation  of the Company
     filed  with  the   Secretary  of  State  of  Delaware  on  March  24,  1999
     (incorporated  by reference to Exhibit 3.1 to the Company's  Form 8-A filed
     on March 25, 1999).

3.2  Amended and Restated By-Laws of the Company, effective as of March 24, 1999
     (incorporated  by reference to Exhibit 3.2 to the Company's  Form 8-A filed
     on March 25, 1999).

4.1  Form of Common Stock Certificate  (incorporated by reference to Exhibit 4.1
     to the Company's Form 8-A filed on March 25, 1999).

4.2  Form of Warrant  Certificate,  included  in the Form of  Warrant  Agreement
     (incorporated  by reference to Exhibit 4.2 to the Company's  Form 8-A filed
     on March 25, 1999).

4.3  Form of Warrant  Agreement dated as of March 24, 1999,  between the Company
     and LaSalle  National Bank, as warrant agent  (incorporated by reference to
     Exhibit 4.3 to the Company's Form 8-A filed on March 25, 1999).

4.4  Form of Preferred Stock  Certificate  (incorporated by reference to Exhibit
     4.4 to the Company's Annual Report on Form 10-K for the year ended December
     31, 1998).

10.1 First  Amendment to Guaranty  Agreement  dated as of March 24, 1999 between
     Westbridge Capital Corp. in favor of LaSalle National Bank (incorporated by
     reference to Exhibit 10.12 to the Company's  Annual Report on Form 10-K for
     the year ended December 31, 1998).

10.2 Registration  Rights  Agreement  dated as of March  24,  1999  between  the
     Company and Special Situations Holdings, Inc. - Westbridge (incorporated by
     reference to Exhibit 10.13 to the Company's  Annual Report on Form 10-K for
     the year ended December 31, 1998).

10.3 1999  Stock  Option  Plan  dated  as of March  24,  1999  (incorporated  by
     reference to the Company's  Schedule 14A filed with the Commission on April
     30, 1999)

27.1 Financial Data Schedule (included in electronic filing only).

(b)  REPORTS ON FORM 8-K

No reports on Form 8-K were filed during the quarter ended June 30, 1999.


<PAGE>




                                                               FORM 10-Q

Pursuant to the requirements 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.

                              ASCENT ASSURANCE, INC.


                              /S/ CYNTHIA B. KOENIG
                              Cynthia B. Koenig
                              Senior Vice President and Chief Financial Officer
                              (Principal Financial and Accounting Officer)



Dated at Fort Worth, Texas
August 13, 1999