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 September 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 November 12, 1999


<PAGE>
<TABLE>
<CAPTION>

                             ASCENT ASSURANCE, INC.
                               INDEX TO FORM 10-Q

<S>     <C>                                                                                               <C>
                                                                                                           Page No.
PART I - FINANCIAL INFORMATION

Item 1 - Financial Statements

         Ascent Assurance, Inc. Condensed Consolidated Balance Sheets
           at September 30, 1999 and March 31, 1999...............................................................3

         Westbridge Capital Corp. Condensed Consolidated Balance Sheet
           at December 31, 1998...................................................................................4

         Ascent Assurance, Inc. Condensed Consolidated Statements of Income
           for the Three and Six Months Ended September 30, 1999..................................................5

         Westbridge Capital Corp. Condensed Consolidated Statements of Income
           for the Three Months Ended March 31, 1999 and September 30, 1998 and
           for the Nine Months Ended September 30, 1998...........................................................6

         Ascent Assurance, Inc. Condensed Consolidated Statements of Cash Flows
           for the Three and Six Months Ended September 30, 1999..................................................7

         Westbridge Capital Corp. Condensed Consolidated Statements of Cash Flows
           for the Three Months Ended March 31, 1999 and September 30, 1998 and
           for the Nine Months Ended September 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.....................................................................................20

         Liquidity, Capital Resources and Statutory Capital and Surplus..........................................22

         Year 2000...............................................................................................25

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

PART II - OTHER INFORMATION

Item 6 - Exhibits and Reports on Form 8-K........................................................................27
</TABLE>


<PAGE>

<TABLE>
<CAPTION>

                             ASCENT ASSURANCE, INC.
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                   (Unaudited)



                                                                            September 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 $108,906
       and $116,352)                                                          $    104,692               $    116,352
   Equity securities, at market                                                      2,246                      2,275
   Other investments                                                                   471                        516
   Short-term investments                                                            5,157                      7,789
                                                                          -----------------------    ---------------------

       Total Investments                                                           112,566                    126,932

Cash                                                                                 2,410                      2,210
Accrued investment income                                                            2,004                      2,169
Receivables from agents, net of allowance for doubtful accounts of
   $6,499 and $6,358                                                                 6,880                      8,182
Deferred policy acquisition costs                                                   17,798                     15,039
Deferred tax asset, net                                                              5,301                      7,347
Other assets                                                                        12,070                      7,916
                                                                          -----------------------    ----------------------

       Total Assets                                                           $    159,029               $    169,795
                                                                          =======================    ======================

Liabilities, Redeemable Preferred Stock and Stockholders' Equity

Liabilities:
   Policy liabilities and accruals:
     Future policy benefits                                                   $     55,673               $     54,738
     Claim reserves                                                                 38,039                     41,068
                                                                          -----------------------    ---------------------

       Total Policy Liabilities and Accruals                                        93,712                     95,806

Accounts payable and other liabilities                                              10,596                     18,541
Notes payable                                                                        6,470                      5,088
                                                                                                     ---------------------

     Total Liabilities                                                             110,778                    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                                                   27,169                     27,038
   Accumulated other comprehensive income, net of tax                              (2,758)                          -
   Retained Earnings                                                                   518                          -
                                                                          -----------------------    ---------------------

     Total Stockholders' Equity                                                     24,994                     27,103
                                                                          -----------------------    ---------------------

       Total Liabilities, Redeemable Preferred Stock
         and Stockholders' Equity                                             $    159,029               $    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,
Assets                                                                                          except 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 STATEMENTS OF INCOME
                                   (Unaudited)


                                                                  Three Months Ended              Six Months Ended
                                                                  September 30, 1999             September 30, 1999
                                                                 ----------------------         ----------------------
                                                                            (in thousands, except per share data)
    <S>                                                         <C>                            <C>
     Revenues:
        Premiums:
          First-year                                                 $       4,810                  $       8,713
          Renewal                                                           23,702                         49,373
                                                                 ----------------------         ----------------------
                                                                            28,512                         58,086
        Net investment income                                                2,222                          4,555
        Fee and service income                                               4,506                          8,702
        Net realized loss on investments                                      (107)                          (170)
                                                                 ----------------------         ----------------------
                                                                            35,133                         71,173
                                                                 ----------------------         ----------------------
     Benefits, claims and expenses:
        Benefits and claims                                                 22,619                         44,352
        Amortization of deferred policy
          acquisition costs                                                    502                            894
        Commissions                                                          4,859                          9,796
        General and administrative expenses                                  5,985                         11,956
        Taxes, licenses and fees                                             1,190                          2,483
        Interest expense on notes payable                                      142                            235
        Resolution of preconfirmation contingencies                         (1,235)                        (1,235)
                                                                 ----------------------         ----------------------
                                                                            34,062                         68,481
                                                                 ----------------------         ----------------------

     Income before income taxes                                              1,071                          2,692
     Federal income tax expense                                               (364)                          (931)
                                                                 ----------------------         ----------------------

        Net income                                                   $         707                  $       1,761
                                                                 ======================         ======================

     Preferred stock dividends                                                 596                          1,243
                                                                 ----------------------         ----------------------
     Income applicable to common stockholders                        $         111                  $         518
                                                                 ======================         ======================


     Basic and diluted net income per common share                   $         .02                  $         .08
                                                                 ======================         ======================

     Weighted average shares outstanding:
        Basic                                                                6,500                          6,500
                                                                 ======================         ======================
        Diluted                                                              6,500                          6,515
                                                                 ======================         ======================

</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           Nine Months
                                                           Ended                  Ended                  Ended
                                                         March 31,            September 30,          September 30,
                                                            1999                   1998                   1998
                                                     -------------------    -------------------    -------------------
                                                                  (in thousands, except per share data)
<S>                                                 <C>                    <C>                    <C>

Revenues:
  Premiums:
     First-year                                          $       3,121          $       4,289          $      15,979
     Renewal                                                    26,827                 28,989                 89,989
                                                     -------------------    -------------------    -------------------
                                                                29,948                 33,278                105,968
  Net investment income                                          2,562                  2,929                  9,287
  Fee and service income                                         4,263                  4,085                 12,184
  Net realized gain on investments                                  41                  1,576                  2,105
                                                     -------------------    -------------------    -------------------
                                                                36,814                 41,868                129,544
                                                     -------------------    -------------------    -------------------

Benefits, claims and expenses:
  Benefits and claims                                           21,799                 23,696                 77,544
  Amortization of deferred policy
     acquisition costs                                             286                  1,448                  3,396
  Commissions                                                    6,134                  6,884                 25,083
  General and administrative expenses                            6,635                  6,833                 20,733
  Taxes, licenses and fees                                       1,059                  1,234                  3,965
  Interest expense on notes payable                                119                  1,882                  6,186
  Interest expense on retired/canceled debt                        507                      -                      -
  Recognition of premium deficiency                                  -                  4,948                  4,948
  Reorganization expense                                             -                  1,606                  3,706
                                                     -------------------    -------------------    -------------------
                                                                36,539                 48,531                145,561
                                                     -------------------    -------------------    -------------------

Income (loss) before income taxes                                  275                 (6,663)               (16,017)
Federal income tax (expense) benefit                               (67)                  (244)                   995
                                                     -------------------    -------------------    -------------------

     Net income (loss)                                   $         208          $      (6,907)         $     (15,022)
                                                     ===================    ===================    ===================

Preferred stock dividends                                            -                    111                    520
                                                     ===================    ===================    ===================
Income (loss) applicable to common stockholders          $         208          $      (7,018)         $     (15,542)
                                                     ===================    ===================    ===================

Basic and diluted earnings (loss) per
   common share                                          $         .03          $       (1.01)         $       (2.39)
                                                     ===================    ===================    ===================

Weighted average shares outstanding:
  Basic                                                          7,032                  6,938                  6,507
                                                     ===================    ===================    ===================
  Diluted                                                        7,032                  6,938                  6,507
                                                     ===================    ===================    ===================

</TABLE>



See Notes to Condensed Consolidated Financial Statements.


<PAGE>
<TABLE>
<CAPTION>


                             ASCENT ASSURANCE, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

                                                                 Three Months Ended                 Six Months Ended
                                                                 September 30, 1999                September 30, 1999
                                                                ----------------------          -----------------------
(in thousands)
<S>                                                               <C>                              <C>
   Cash Flows From Operating Activities:
      Net income                                                    $         707                   $         1,761
      Adjustments to reconcile net income to cash
        provided by (used for) operating activities:
        Amortization of deferred policy acquisition costs                     502                               894
        Decrease in receivables from agents                                    58                             1,302
        Addition to deferred policy acquisition costs                      (1,917)                           (3,653)
        Increase in other assets                                           (2,011)                             (945)
        Decrease in policy liabilities and accruals                          (434)                           (2,094)
        Decrease in accounts payable and other liabilities                 (6,636)                           (9,188)
        Decrease in deferred income taxes, net                              3,073                             2,046
      Other, net                                                            1,035                             2,440
                                                                ----------------------          -----------------------

          Net Cash Used For Operating Activities                           (5,623)                           (7,437)
                                                                ----------------------          -----------------------

   Cash Flows From Investing Activities:
      Proceeds from investments sold:
        Fixed maturities, called or matured                                 1,420                             2,227
        Fixed maturities, sold                                              1,993                             8,556
        Other investments, sold or matured                                      2                                60
      Cost of investments acquired                                          1,550                            (1,377)
     Software, equipment, and other                                        (2,046)                           (3,209)
                                                                ----------------------          -----------------------

          Net Cash Provided By Investing Activities                         2,919                             6,257
                                                                ----------------------          -----------------------

   Cash Flows From Financing Activities:
      Issuance of notes payable                                             4,650                             6,058
      Repayment of notes payable                                           (1,691)                           (4,678)
                                                                ----------------------          -----------------------

          Net Cash Provided By Financing Activities                         2,959                             1,380
                                                                ----------------------          -----------------------

      Increase In Cash During Period                                          255                               200
      Cash at Beginning of Period                                           2,155                             2,210
                                                                ----------------------          -----------------------

          Cash at End of Period                                     $       2,410                   $         2,410
                                                                ======================          =======================


</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           Nine Months
                                                                Ended                   Ended                 Ended
                                                              March 31,             September 30,         September 30,
                                                                 1999                   1998                   1998
                                                          -------------------     ------------------     -----------------
                                                                                  (in thousands)
<S>                                                      <C>                     <C>                    <C>

Cash Flows From Operating Activities:
Income (loss) applicable to common stockholders               $         208           $     (7,018)          $   (15,542)
  Adjustments to reconcile net income to cash
     provided by (used for) operating activities:
  Amortization of deferred policy acquisition costs                     286                   1,448                 3,396
    Recognition of premium deficiency                                     -                   4,948                 4,948
  Decrease in receivables from agents                                 1,678                   2,353                 7,505
  Addition to deferred policy acquisition costs                      (1,148)                (1,425)               (2,688)
  (Increase) decrease in other assets                                (1,007)                    261                   862
  Decrease in policy liabilities and accruals                        (2,181)                (4,562)               (7,953)
  Increase in accounts payable and other liabilities                  4,428                     795                 4,376
  Increase in deferred income taxes, net                             (1,070)                      -                     -
  Other, net                                                          1,308                     136                    38
                                                          -------------------     ------------------     -----------------

     Net Cash Provided By (Used For) Operating
       Activities                                                     2,502                 (3,064)               (5,058)
                                                          -------------------     ------------------     -----------------

Cash Flows From Investing Activities:
  Proceeds from investments sold:
     Fixed maturities, called or matured                              2,215                   1,538                 6,664
     Fixed maturities, sold                                           4,904                     671                12,014
     Other investments, sold or matured                                 139                   3,848                 5,784
  Cost of investments acquired                                       (5,851)                (2,135)              (12,564)
  Other                                                                (873)                   (85)                 (848)
                                                          -------------------     ------------------     -----------------

     Net Cash Provided By Investing Activities                          534                   3,837                11,050
                                                          -------------------     ------------------     -----------------

Cash Flows From Financing Activities:
  Retirement of senior subordinated debentures                      (15,167)                      -                     -
  Issuance of notes payable                                             911                   1,256                 4,230
  Repayment of notes payable                                         (2,015)                 (2,690)               (9,712)
  Issuance of preferred stock                                        15,167                       -                     -
                                                          -------------------     ------------------     -----------------

     Net Cash Used For Financing Activities                          (1,104)                (1,434)               (5,482)
                                                          -------------------     ------------------     -----------------

Increase (Decrease) in Cash During Period                             1,932                   (661)                   510
Cash at Beginning of Period                                             278                   2,201                 1,030
                                                          -------------------     ------------------     -----------------

     Cash at End of Period                                    $       2,210           $       1,540          $      1,540
                                                          ===================     ==================     =================

</TABLE>


See Notes to Condensed Consolidated Financial Statements.
<PAGE>

                             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, Title
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 second  distribution  was
               made in  September  1999 and the  remaining  shares of New Common
               Stock are expected to be distributed in November 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 ss. 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.  Generally,  these actuarial
assumptions are fixed and, absent material adverse benefit  experience,  are not
adjusted.  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  September  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.

Resolution of Preconfirmation  Contingencies.  Preconfirmation contingencies are
disputed,  unliquidated or contingent  claims that are unresolved at the date of
the  confirmation  of the  plan  of  reorganization.  As  part  of  fresh  start
accounting,  the  Company  estimated  and  recorded  values for  preconfirmation
contingencies relative to the payment of professional fees and the collection of
receivables  from third  parties.  During the third  quarter  1999,  the Company
favorably  resolved  such  preconfirmation  contingencies.  In  accordance  with
generally accepted accounting principles, the Company recognized $1.2 million of
income   relative  to  the   favorable   resolution   of  such   preconfirmation
contingencies.

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        Six Months       Three Months      Three Months      Nine Months
                                              Ended              Ended            Ended             Ended             Ended
                                          September 30,      September 30,      March 31,       September 30,     September 30,
                                              1999               1999              1999              1998             1998
                                         --------------     --------------    -------------     -------------    --------------
                                                           (Amounts in thousands, except per share amounts)
 <S>                                    <C>                <C>               <C>               <C>              <C>

  Income (loss) applicable to common
     stockholders                         $      111         $      518        $      208        $  (7,018)       $ (15,542)
                                         ==============    =============     =============     ==============    ==============

  Basic and diluted earnings (loss)
     per share                            $      .02         $      .08        $      .03        $   (1.01)       $   (2.39)
                                         ==============    =============     =============     =============     =============

  Weighted average shares outstanding:
     Basic                                     6,500              6,500             7,032            6,938             6,507
                                         ==============    =============     =============     ==============    ==============
     Diluted                                   6,500              6,515             7,032            6,938             6,507
                                         ==============    ==============    =============     ==============    ==============
</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        Six Months       Three Months      Three Months      Nine Months
                                              Ended              Ended            Ended             Ended             Ended
                                          September 30,      September 30,      March 31,       September 30,     September 30,
                                              1999               1999              1999              1998             1998
                                         --------------     --------------    -------------     -------------    --------------
                                                                        (Amounts in thousands)
<S>                                     <C>                <C>               <C>               <C>              <C>
Income (loss) applicable to common
     stockholders                         $      111          $      518       $      208        $   (7,018)      $  (15,542)
Other comprehensive loss
     Unrealized holding loss arising
       during period, net of tax                (855)             (2,869)          (1,959)            1,120            2,193
     Reclassification adjustment of loss
       (gain) on sales of fixed maturity
       and equity securities included in
       net income, net of tax                     70                 111              (27)           (1,024)          (1,248)
                                         --------------     --------------    -------------     -------------    --------------

Comprehensive loss, net of tax            $     (674)         $   (2,240)      $   (1,778)       $   (6,922)      $  (14,597)
                                         ==============     ==============    =============     =============    --------------

</TABLE>


<PAGE>



NOTE 5 - NOTES PAYABLE

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.

NOTE 6 - 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 7 - 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.






<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 in 1998 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  organizations,  (ii)
telemarketing and telesurvey services, and (iii) printing services.


<PAGE>



-------------------------------------------------------------------------------
OPERATING RESULTS

Results of  operations  for  Ascent  are  reported  for the three  months  ended
September 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 nine months ended  September 30, 1999.  The  operating  results for 1999 are
compared to Westbridge's  results of operation for the corresponding  periods in
1998. (In thousands except insurance operating ratios.)
<TABLE>
<CAPTION>

                                                      Three Months Ended September 30,    Nine Months Ended September 30,
                                                      --------------------------------    -------------------------------
                                                           1999               1998             1999              1998
                                                      --------------     -------------    --------------    -------------
                                                          Ascent           Westbridge        Pro forma        Westbridge
                                                                                              Ascent

<S>                                                  <C>                <C>              <C>               <C>
Premiums                                              $     28,512       $     33,278     $     88,034      $    105,968
Other                                                          503                130            1,055               422
                                                      --------------     -------------    --------------    -------------
Total insurance operating revenue                     $     29,015       $     33,408     $     89,089      $    106,390

Benefits and claims                                         22,619             23,696           66,151            77,544
Commissions                                                  2,944              4,167            9,383            16,757
Amortization of deferred policy acquisition costs              502              1,448            1,180             3,396
General and administrative expense                           4,786              5,594           15,000            16,910
Taxes licenses and fees                                      1,190              1,234            3,542             3,965
                                                      --------------     -------------    --------------    -------------

Total insurance operating expenses                          32,041             36,139           95,256           118,572
                                                      --------------     -------------    --------------    -------------

     Insurance operating results                            (3,026)            (2,731)          (6,167)          (12,182)
                                                      --------------     -------------    --------------    -------------

Fee and service income                                       4,000              4,085           11,910            12,184
Fee and service expenses                                    (3,111)            (4,086)         (10,138)          (12,571)
                                                      --------------     -------------    --------------    -------------

     Fee and service results                                   889                 (1)           1,772              (387)
                                                      --------------     -------------    --------------    -------------

Net investment income                                        2,222              2,929            7,117             9,287
Net realized gain (loss) on investments                       (107)             1,576             (129)            2,105
Interest expense on notes payable                             (142)              (200)            (354)             (727)
Interest expense on retired/canceled debt                        -             (1,682)               -            (5,459)
Recognition of premium deficiency                                -             (4,948)               -            (4,948)
Resolution of preconfirmation contingencies                  1,235                  -            1,235                 -
Reorganization expenses                                          -             (1,606)               -            (3,706)
                                                      --------------     -------------    --------------    -------------

     Income (loss) before income taxes                       1,071             (6,663)           3,474           (16,017)

Income tax (expense) benefit                                  (364)              (244)          (1,216)              995
                                                      --------------     -------------    --------------    -------------

     Net income (loss)                                $        707       $     (6,907)    $      2,258      $    (15,022)
                                                      ==============     =============    ==============    =============

Insurance operating ratios*
  Benefits and claims                                        79.3%              71.2%            75.1%             73.2%
  Commissions                                                10.3%              12.5%            10.7%             15.8%
  Amortization of deferred policy acquisition costs           1.8%               4.4%             1.3%              3.2%
  General and administrative expense                         16.5%              16.7%            16.8%             15.9%
  Taxes, licenses and fees                                    4.2%               3.7%             4.0%              3.7%

</TABLE>


*Ratios are calculated as a percent of premium with the exception of the general
and  administrative  expense  ratio  which is  calculated  as a percent of total
insurance operating revenue.

Overview. Pre-tax income for the third quarter of 1999 was $1.1 million compared
to a loss of $6.7  million  for the third  quarter  of 1998.  For the first nine
months of 1999, pre-tax income was $3.5 million compared to a $16.0 million loss
for the nine months ended September 30, 1998. The favorable variances in pre-tax
income were attributable to:

          The  improvement  in  insurance  operating  results for the first nine
          months of 1999 as the 1.9 percentage point increase in the benefit and
          claims to premium  ratio was offset by  decreases  in other  expenses.
          Insurance  operating  results  declined  by $0.3  million in the third
          quarter  of 1999 in  comparison  to the third  quarter  of 1998 as the
          increase in the benefits and claims to premium  ratio more than offset
          decreases in other expenses.

          Profitable  fee  and  service  results.  The  Company's  printing  and
          telemarketing  operations have generated  profits during 1999 compared
          to losses realized in 1998.

          Non-recurring items expensed during 1998 that were eliminated with the
          Company's reorganization in 1999. Non-recurring items include interest
          expense on  retired/canceled  debt,  recognition of premium deficiency
          and reorganization expenses.

          Recognition of income  relative to the  resolution of  preconfirmation
          contingencies.  (See  Note 2 of the  Notes To  Condensed  Consolidated
          Financial Statements.)

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

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

<TABLE>
<CAPTION>
                                                Three Months Ended September 30,      Nine Months Ended September 30,
                                               --------------------------------      -----------------------------------
                                                   1999              1998                 1999                1998
                                               --------------    --------------      ---------------     ---------------
                                                  Ascent          Westbridge           Pro forma           Westbridge
                                                                                         Ascent
    <S>                                        <C>               <C>                 <C>                 <C>
     Medical Expense:
         First-year                             $     4,320       $     3,586         $    10,683         $    12,992
         Renewal                                      9,446            12,260              31,047              37,290
                                               --------------    --------------      ---------------     ---------------
              Subtotal                               13,766            15,846              41,730              50,282
                                               --------------    --------------      ---------------     ---------------
     Specified Disease:
         First-year                                     342               476                 979               1,539
         Renewal                                      6,804             7,301              21,139              22,586
                                               --------------    --------------      ---------------     ---------------
              Subtotal                                7,146             7,777              22,118              24,125
                                               --------------    --------------      ---------------     ---------------
     Medicare Supplement:
         First-year                                      10               213                  32               1,399
         Renewal                                      7,325             9,285              23,616              29,624
                                               --------------    --------------      ---------------     ---------------
              Subtotal                                7,335             9,498              23,648              31,023
                                               --------------    --------------      ---------------     ---------------
     Other                                              265               157                 538                 538
                                               ==============    ==============      ===============     ===============
              Total Premium Revenue             $    28,512       $    33,278         $    88,034         $   105,968
                                               ==============    ==============      ===============     ===============
</TABLE>


Total  premiums  decreased $4.8 million in the third quarter of 1999 as compared
to the third quarter of 1998 due to a $5.3 million,  or 18%, decrease in renewal
premiums that was partially offset by a $0.5 million,  or 12%, increase in first
year  premiums.  For the nine months ended  September 30, 1999,  total  premiums
decreased  $17.9  million,  or 17%,  from the  comparable  period for 1998.  The
decrease  resulted from a $4.1 million,  or 26%, decrease in first year premiums
and a decrease in renewal premiums of $13.8 million, or 15%.

The decrease in renewal  premiums for the third quarter of 1999 was comprised of
a $2.8 million, or 23%, decrease in Medical Expense premiums, a $2.0 million, or
21%,  decrease  in  Medicare  Supplement  premiums  and a $0.5  million,  or 7%,
decrease in Specified Disease premiums. The decrease in renewal premiums for the
first nine months of 1999 consists of a $6.2 million, or 17% decrease in Medical
Expense  premiums,  a $6.0  million,  or 20%,  decrease in  Medicare  Supplement
premiums and a $1.4 million, or 6%, decrease in Specified Disease premiums.  The
cancellation  of  unprofitable  blocks of  business  and  decreased  persistency
resulting from the implementation of rate increases on less profitable blocks of
business  significantly  impacted  the  variance  from 1998 to 1999 for  renewal
premiums.

The  increase  in first  year  premiums  for the third  quarter  of 1999 was due
primarily to a $0.7 million increase in Medical Expense  premiums.  The increase
in first year premiums was attributable to an increase in submitted new business
production  resulting from growth in the Company's  agency force, the regulatory
approval of new medical  expense  products and the opening of new  regions.  The
decrease in first year  premiums for the first nine months of 1999 was comprised
of a $2.3 million, or 18%, decrease in Medical Expense premiums, a $1.4 million,
or 98%,  decrease in Medicare  Supplement  premiums and a $0.6 million,  or 36%,
decrease in Specified  Disease  premiums.  First year  premiums  declined in the
Medical  Expense  premiums  and  the  Specified  Disease  premiums  due  to  the
restructuring of the Company's marketing operations in mid-1998.  The first year
premiums  for Medicare  Supplement  decreased  due to the Company  discontinuing
sales of the product line.

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  third  quarter  of  1999,  the 8.1
percentage  point  increase  in the ratio of  benefits  and  claims  to  premium
compared  to the  third  quarter  of  1998  was  due  primarily  to  unfavorable
experience in the Major Medical and Specified Disease lines of business. For the
nine months ended  September 30, 1999, the 1.9 percentage  point increase in the
ratio of benefits and claims to premium in  comparison  to the nine months ended
September 30, 1998 was due to  unfavorable  experience in the Major Medical line
of business partially offset by favorable trends in the Medicare Supplement line
of business.  The Company continues to pursue initiatives to reduce its benefits
and  claims to  premium  ratio  including  increased  production  of  profitable
products, premium rate increases and elimination of unprofitable business.

Commissions.  The 2.2  percentage  point decrease in the ratio of commissions to
premium improved  insurance  operating results by approximately  $0.6 million in
the third  quarter of 1999 as  compared  to 1998.  The  decrease in the ratio of
commissions to premium is attributable to declining ultimate commission rates on
closed blocks of business.

For the nine months ended  September 30, 1999, the percentage  point decrease of
5.1 percentage  points in the ratio of commissions to premium from 1998 improved
insurance  operating results by approximately  $4.5 million.  The improvement in
the commission rate is attributable to the decrease in first-year premiums which
carry a higher commission rate,  declining  ultimate  commission rates on closed
blocks of business and the lower  commission  rate structure  implemented in the
conversion  from a fragmented  general  agency  marketing  operation to a single
career agency force in mid-1998.

Net Investment income. Net investment income decreased by $0.7 million,  or 24%,
for the third quarter of 1999 as compared to 1998 and decreased by $2.2 million,
or 23%, for the nine months ended  September 30, 1999 as compared to 1998 due to
an 18%  decrease in invested  assets and  decreased  interest  income from agent
receivables.  Invested  assets  decreased  due to the payment of  reorganization
costs and the reduction of premiums  received as a result of the  elimination of
unprofitable blocks of business.


FINANCIAL CONDITION

The following discussion provides management's assessment of financial condition
at  September  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>

                                                        September 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)                                $      10,915          10.4           $     11,271            9.7
Finance                                                   27,206          26.0                 31,525           27.1
Public utilities                                          10,352           9.9                 12,745           11.0
Mortgage-backed                                            6,083           5.8                  7,349            6.3
States, municipalities and political
   subdivisions                                            1,917           1.8                  1,543            1.3
All other corporate bonds                                 48,219          46.1                 51,919           44.6
                                                 ================    =============     ================    ============
   Total fixed maturity securities                 $     104,692         100.0           $    116,352         100.00
                                                 ================    =============     ===============     ============
</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>

                                                        September 30, 1999                    March 31, 1999
                                                  --------------------------------    --------------------------------
Composition of Fixed Maturity                          Market                              Market
Securities by Rating                                   Value                %               Value               %
---------------------------------------------     -----------------     ----------    ------------------    ----------
Ratings                                                   (in thousands)                      (in thousands)
<S>                                              <C>                   <C>           <C>                   <C>
Investment grade:
   U.S. Government and agencies                     $    16,998             16.2        $    17,677             15.2
   AAA                                                    2,069              2.0              2,902              2.5
   AA                                                    12,484             11.9              9,685              8.3
   A                                                     36,023             34.5             40,382             34.7
   BBB                                                   33,932             32.4             42,237             36.3
Non-Investment grade:
   BB                                                     2,034              1.9              1,317              1.1
   B and below                                            1,152              1.1              2,152              1.9
                                                  -----------------     ----------    -----------------     ----------
     Total fixed maturity securities                $   104,692            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 September 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>

                                                        September 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                             $     4,005              3.8        $       712              0.6
Due after one year through five years                    29,762             28.4             37,503             32.2
Due after five years through ten years                   34,760             33.3             37,550             32.3
Due after ten years                                      30,082             28.7             33,238             28.6
Mortgage-backed securities                                6,083              5.8              7,349              6.3
                                                  -----------------     ----------    ------------------    ----------
     Total fixed maturity securities                $   104,692            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 $38.0 million at September 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
$55.7  million at September  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,  investment income, and tax
payments under a tax sharing agreement among Ascent and its subsidiaries.  As of
September 30, 1999, Ascent held  approximately $6.3 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 of America  ("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
nine months  ended  September  30,  1999 and 1998,  the  insurance  subsidiaries
received  capital  contributions  totaling  approximately  $3.4 million and $5.5
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 September 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
$5.6 million for the third quarter 1999. The use of the cash from operations was
primarily  attributable  to decreases in  liabilities  relative to the Company's
reorganization  and payments for system  replacement costs. Net cash provided by
investing  activities for the third quarter 1999 totaled $2.9 million.  The cash
provided by investing  activities was used to fund operational  activities.  Net
cash provided by financing activities totaled $3.0 million for the third quarter
of  1999.  Financing  activities  relate  primarily  to the net  borrowings  and
repayments  associated with the Company's  receivables financing program and the
funding of system replacement costs.

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. 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 September 30, 1999, there were no events of default
under the Credit or Guaranty Agreements.

Under  this  commission  advancing  program,  the  Company's   receivables  from
subagents totaled  approximately $6.9 million and approximately $3.2 million was
outstanding  under the Credit Agreement at September 30, 1999.  During the third
quarter 1999, the Company paid  approximately $1.7 million of principal and made
new borrowings of $1.4 million.

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.  At
September 30, 1999,  approximately  $3.3 million was outstanding  under the term
loan facility.

YEAR 2000

The Company has  completed  an  enterprise-wide  analysis  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 on January 1, 2000 (the "Year 2000").
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.  These
efforts   include  system   assessment  and  monitoring   advice,   actual  code
remediation,  communication and consultation with critical business partners and
testing resources.

The Company's contingency plan is to make the existing I/T systems, which are to
be  replaced,   Year  2000  compliant.   The   contingency   plan  includes  the
identification  and  prioritization  of  the  existing  system's   applications.
Application  programs  identified  for  mission  critical  functions  have  been
successfully  remediated,  tested and moved into the production  environment and
are currently in use.  Other  application  functions that are not as critical to
the  operation  of the  Company's  business  are in the  testing  stage  and are
expected to be implemented by December, 1999.

The Company's  contingency  plan also includes manual business  continuity plans
for each business unit.  These plans have been documented and are in the process
of being tested. The Company has completed the assessment of its non-I/T systems
and has determined that those systems are compliant.

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  corresponded with its outside vendors and critical business partners to
determine  whether  they are also  prepared  for the Year 2000.  Responses  from
vendors and critical  business  partners indicate that they are prepared or will
be prepared for the Year 2000.

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.  At September  30,  1999,  this
replacement effort was well underway.

For the nine months ended September 30, 1999, the Company incurred approximately
$.5  million in  incremental  costs  related  to  remediation  of the  Company's
existing  systems for the Year 2000.  The  majority of the  Company's  Year 2000
costs relate to computer hardware and software purchases and consulting fees for
the replacement of existing  systems.  The Company expects total charges related
to the  system  replacement  effort to  approximate  $4.8  million  of which the
majority will be capitalized.  For the nine months ended September 30, 1999, the
Company  incurred  approximately  $3.8  million of the  projected  total of $4.8
million in costs relative to the system replacement.

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  management  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 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).


<PAGE>





10.4 Installment  Note Agreement dated July 20, 1999 between Ascent  Management,
     Inc. and LaSalle Bank National Association.

10.5 Second  Amendment to Credit  Agreement dated August 12, 1999 between Ascent
     Funding, Inc. and LaSalle Bank National Association.

10.6 Second  Amendment to Guaranty  Agreement dated July 20, 1999 between Ascent
     Assurance, Inc. and LaSalle Bank National Association.

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 September 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
November 12, 1999


<PAGE>
                                                                    Exhibit 10.4


                                INSTALLMENT NOTE



Executed this 20th  day of July, 1999
Amount $3,300,000                                       Due:  As described below


     ASCENT  MANAGEMENT,  INC., whose address is 110 West Seventh Street,  Suite
300, Fort Worth, Texas 76102 (the "Undersigned"),  for value received,  promises
to pay to the order of LASALLE  BANK  NATIONAL  ASSOCIATION  (formerly  known as
LaSalle  National Bank), a national  banking  association,  whose address is 135
South LaSalle Street,  Chicago,  Illinois 60603 (hereinafter,  together with any
holder hereof,  called "Bank"), the principal sum of THREE MILLION THREE HUNDRED
THOUSAND DOLLARS ($3,300,000) or so much thereof as may be outstanding from time
to time pursuant to the terms hereof. On the date hereof, the Bank shall advance
to the Undersigned,  the principal sum of Two Million Dollars ($2,000,000),  and
thereafter, so long as any such request is made prior to December 31,  1999, and
the Undersigned is not then in default hereof,  the Bank shall advance up to the
additional amount of One Million Three Hundred Thousand Dollars  ($1,300,000) in
minimum increments of Two Hundred Thousand Dollars  ($200,000).  The outstanding
principal amount hereof  including any additional  advances made pursuant to the
terms hereof after the date hereof shall bear  interest from time to time at one
or more of the rates per annum  determined in accordance with the Rider attached
hereto and made a part hereof as shall be  specified by the Borrower at the time
of each  advance  hereunder,  and shall be  payable  as  provided  therein.  The
outstanding  principal  balance  hereof  from time to time  shall be  payable in
monthly  installments  in such amount as is  necessary  to fully  amortize  such
principal  balance,  based on a five year  amortization,  beginning  January 31,
2000,  and on the last day of each month  thereafter,  with a final  installment
equal to the total principal  balance then remaining unpaid,  plus interest,  on
December 31, 2004.

     The  Undersigned  agrees to pay to the Bank on the date hereof a fee in the
amount of $15,000, in consideration for the Bank's agreements herein to make the
loans described above. The Undersigned also promises to pay to the Bank, for the
period from the date  hereof to the  maturity  date,  a non-use fee on the daily
unused  portion of the term loan hereunder in the amount equal to one-quarter of
one percent  (.25%) per annum of such unused  amount.  Such non-use fee shall be
payable quarterly in arrears and shall be computed for the actual number of days
elapsed during such quarter on the basis of a year of 360 days.

     The  Undersigned  hereby  authorizes  the Bank to charge any account of the
Undersigned  maintained at the Bank for sums due hereunder.  Principal  payments
submitted in funds not available until collected shall continue to bear interest
until  collected.  If payment  hereunder  becomes due and payable on a Saturday,
Sunday  or legal  holiday  under the laws of the  United  States or the State of
Illinois, the due date thereof shall be extended to the next succeeding business
day, and interest  shall be payable  thereon at the rate  specified  during such
extension.

     As security for the payment of this Note and any and all other  liabilities
and  obligations of the Undersigned to Bank arising out of or relating hereto or
any document entered into in connection herewith,  howsoever created, arising or
evidenced,  and  howsoever  owned,  held or  acquired,  whether now or hereafter
existing,  whether  now due or to become due,  whether  direct or  indirect,  or
absolute or contingent,  and whether several, joint or joint and several (all of
which liabilities and obligations,  including this Note, are hereinafter  called
the  "Obligations"),  the  Undersigned  does hereby assign and pledge,  and does
hereby grant, to Bank a continuing and  unconditional  security  interest in the
property  of the  Undersigned  more fully  described  in that  certain  Security
Agreement  of even  date  made by the  Undersigned  in favor  of the  Bank  (the
"Security  Agreement"),  the  covenants,  conditions and agreements of which are
hereby incorporated herein by this reference,  and a default thereunder shall be
and constitute a default under this Note and any other of the Obligations.

     All of the  aforesaid  property and the  products  and proceeds  therefrom,
including the proceeds of insurance thereon,  are herein collectively called the
"Collateral".

     All rights,  powers and remedies of the Bank,  expressed herein shall be in
addition to, and not in limitation  of, those  provided by law or in any written
agreement  or  instrument  (other  than  this  Note)  relating  to  any  of  the
Obligations or any security therefor.


     The Undersigned,  without notice or demand of any kind, shall be in default
hereunder  if:  (1) any  amount  payable  on any of the  Obligations,  or on the
obligations of any obligor hereunder, is not paid within five (5) days after the
date due;  or (2) the  Undersigned  shall  otherwise  fail to perform any of the
promises  to be  performed  by the  Undersigned  hereunder  or under  any  other
security  agreement or other agreement with Bank and such failure shall continue
unremedied for a period of thirty (30) days; or (3) the Undersigned or any other
party liable with respect to the Obligations,  or any guarantor or accommodation
endorser or third party  pledgor,  shall make any  assignment for the benefit of
creditors, or there shall be commenced any bankruptcy, receivership, insolvency,
reorganization,  dissolution  or liquidation  proceedings by or against,  or the
entry of any judgment,  levy,  attachment,  garnishment or other process, or the
filing of any lien against any of the Undersigned or any guarantor, or any other
party liable with respect to the Obligations, or accommodation endorser or third
party pledgor for any of the  Obligations,  or against any of the  Collateral or
any of the collateral under a separate  security  agreement signed by any one of
them  relating  to  the  Obligations;  or (4)  there  be  any  deterioration  or
impairment of any of the Collateral under any security agreement executed by any
of the  Undersigned,  or any other party liable with respect to the Obligations,
or any guarantor or accommodation endorser or third party pledgor for any of the
Obligations, or any decline in the value or market price thereof (whether actual
or reasonably  anticipated),  which causes said  Collateral or collateral in the
sole opinion of Bank acting in good faith, to become  unsatisfactory as to value
or character, or which causes the Bank to reasonably believe that it is insecure
and that the  likelihood  for  repayment of the  Obligations  is or will soon be
impaired,  time  being of the  essence;  or (5) if this  Note is  secured  by an
additional or separate  security  agreement,  then the occurrence of any default
thereunder; or (6) there is a discontinuance by any guarantor of any guaranty of
Obligations  hereunder;  or (7) the  determination  by the Bank that a  material
adverse change has occurred in the financial  condition of the Undersigned  from
the  condition  set  forth  in  the  most  recent  financial  statement  of  the
Undersigned  furnished  to the  Bank,  or from the  financial  condition  of the
Undersigned  most recently  disclosed to Bank in any manner;  or (8) any oral or
written warranty, representation, certificate or statement of the Undersigned to
the Bank is untrue;  or (9) the failure to do any act  necessary to preserve and
maintain the value and collectability of the Collateral;  or (10) failure of the
Undersigned  after request by the Bank to furnish  financial  information  or to
permit  inspection by the Bank of the Undersigned's  books and records;  or (11)
any guarantor of this Note or of any of the other  Obligations shall contest the
validity of such guaranty;  or (12) the occurrence of any material adverse event
which causes a change in the financial  condition of the  Undersigned,  or which
would have a material adverse effect on the business of the Undersigned.

     Whenever the Undersigned  shall be in default as aforesaid,  without demand
or notice of any kind, the entire unpaid amount of all Obligations  shall become
immediately due and payable, and: (1) Bank may sell all or any of the Collateral
as provided in the Security Agreement;  and (2) Bank may exercise,  from time to
time,  any and all  rights  and  remedies  available  to it  under  the  Uniform
Commercial  Code of Illinois,  or otherwise  available  to it,  including  those
available  under any written  instrument  (in addition to this Note) relating to
any of the Obligations or any security therefor.

     THE UNDERSIGNED WAIVES THE BENEFIT OF ANY LAW THAT WOULD OTHERWISE RESTRICT
OR LIMIT BANK IN THE  EXERCISE OF ITS RIGHT,  WHICH IS HEREBY  ACKNOWLEDGED,  TO
APPROPRIATE  WITHOUT  NOTICE  AND  REGARDLESS  OF THE  COLLATERAL,  AT ANY  TIME
HEREAFTER,  ANY  INDEBTEDNESS  MATURED  OR  UNMATURED,  OWING  FROM  BANK TO THE
UNDERSIGNED.  THE BANK MAY, FROM TIME TO TIME,  WITHOUT  DEMAND OR NOTICE OF ANY
KIND,  APPROPRIATE AND APPLY TOWARD THE PAYMENT OF SUCH OF THE OBLIGATIONS,  AND
IN SUCH ORDER OF APPLICATION,  AS THE BANK MAY, FROM TIME TO TIME, ELECT ANY AND
ALL SUCH BALANCES,  CREDITS,  DEPOSITS,  ACCOUNTS,  MONEYS, CASH EQUIVALENTS AND
OTHER ASSETS,  OF OR IN THE NAME OF THE UNDERSIGNED  THEN OR THEREAFTER WITH THE
BANK.


     THE  UNDERSIGNED  WAIVES EVERY DEFENSE,  CAUSE OF ACTION,  COUNTERCLAIM  OR
SETOFF WHICH THE UNDERSIGNED MAY NOW HAVE OR HEREAFTER MAY HAVE TO ANY ACTION BY
BANK  IN  ENFORCING  THIS  NOTE  AND/OR  ANY OF THE  OTHER  OBLIGATIONS,  OR THE
COLLATERAL  AND RATIFY AND  CONFIRM  WHATEVER  BANK MAY DO PURSUANT TO THE TERMS
HEREOF AND WITH  RESPECT  TO THE  COLLATERAL  AND AGREES  THAT BANK SHALL NOT BE
LIABLE FOR ANY ERROR OF JUDGMENT  OR  MISTAKES OF FACT OR LAW.  THE BANK AND THE
UNDERSIGNED  KNOWINGLY,  VOLUNTARILY AND INTENTIONALLY  WAIVE  IRREVOCABLY,  THE
RIGHT  EITHER  OR ANY MAY  HAVE TO  TRIAL  BY JURY  WITH  RESPECT  TO ANY  LEGAL
PROCEEDING  BASED HEREON,  OR ARISING OUT OF, UNDER OR IN  CONNECTION  WITH THIS
NOTE OR ANY OF THE  OTHER  OBLIGATIONS,  OR THE  COLLATERAL,  OR ANY  AGREEMENT,
EXECUTED OR CONTEMPLATED TO BE EXECUTED IN CONJUNCTION HEREWITH OR ANY COURSE OF
CONDUCT OR COURSE OF DEALING,  IN WHICH THE BANK AND THE UNDERSIGNED ARE ADVERSE
PARTIES.  THIS  PROVISION  IS A MATERIAL  INDUCEMENT  FOR THE BANK  GRANTING ANY
FINANCIAL ACCOMMODATION TO THE UNDERSIGNED.

     The   Undersigned,   and  any  other  party  liable  with  respect  to  the
Obligations,   including  any   guarantors,   and  any  and  all  endorsers  and
accommodation  parties,  and each one of them,  waive  any and all  presentment,
demand,  notice of  dishonor,  protest,  and all other  notices  and  demands in
connection with the enforcement of Bank's rights  hereunder,  and hereby consent
to,  and  waive  notice  of  release,  with  or  without  consideration,  of the
Undersigned or of any Collateral.  No default shall be waived by the Bank except
in  writing.  No delay on the part of the Bank in the  exercise  of any right or
remedy shall operate as a waiver thereof,  and no single or partial  exercise by
the Bank of any  right or  remedy  shall  preclude  other  or  further  exercise
thereof,  or the exercise of any other right or remedy. This Note: (i) is valid,
binding and  enforceable in accordance  with its  provisions,  and no conditions
exist  to the  legal  effectiveness  of this  Note;  (ii)  contains  the  entire
agreement  between the  Undersigned and Bank;  (iii) is the final  expression of
their  intentions;  and  (iv)  supersedes  all  negotiations,   representations,
warranties,  commitments, offers, contracts (of any kind or nature, whether oral
or written) prior to or  contemporaneous  with the execution hereof. No prior or
contemporaneous   representations,   warranties,   understandings,   offers   or
agreements  of any kind or nature,  whether  oral or written,  have been made by
Bank or relied upon by the Undersigned in connection with the execution  hereof.
No  modification,  discharge,  termination  or waiver  of any of the  provisions
hereof  shall be  binding  upon the  Bank,  except as  expressly  set forth in a
writing duly signed and delivered on behalf of the Bank.

     The  Undersigned  agrees  to pay  all  reasonable  costs,  legal  expenses,
attorneys' fees and paralegals'  fees of every kind, paid or incurred by Bank in
enforcing its rights  hereunder,  including,  but not limited to,  litigation or
proceedings  initiated under the United States Bankruptcy Code, or in respect to
any  other  of the  Obligations,  or in  connection  with the  Collateral  or in
defending  against  any  defense,  cause  of  action,  counterclaim,  setoff  or
crossclaim  based on any act of  commission or omission by the Bank with respect
to this Note or any other of the Obligations or Collateral, or both, promptly on
demand of Bank or other person paying or incurring the same.

     The Bank may at any time transfer this Note and Bank's rights in any or all
of the Collateral, and Bank thereafter shall be relieved from all liability with
respect to such Collateral.

     TO INDUCE THE BANK TO MAKE THE LOAN EVIDENCED BY THIS NOTE, THE UNDERSIGNED
IRREVOCABLY  AGREES THAT, ALL ACTIONS ARISING DIRECTLY OR INDIRECTLY AS A RESULT
OR IN  CONSEQUENCE  OF THIS NOTE OR ANY OTHER  AGREEMENT  WITH THE BANK RELATING
HERETO,  OR THE  COLLATERAL,  SHALL BE INSTITUTED  AND LITIGATED  ONLY IN COURTS
HAVING  SITUS IN THE  CITY OF  CHICAGO,  ILLINOIS,  AND THE  UNDERSIGNED  HEREBY
CONSENTS TO THE EXCLUSIVE  JURISDICTION  AND VENUE OF ANY STATE OR FEDERAL COURT
LOCATED  AND HAVING ITS SITUS IN SAID CITY,  AND WAIVES ANY  OBJECTION  BASED ON
FORUM  NONCONVENIENS,  AND THE UNDERSIGNED HEREBY WAIVES PERSONAL SERVICE OF ANY
AND ALL PROCESS,  AND  CONSENTS  THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE BY
CERTIFIED  MAIL,  RETURN RECEIPT  REQUESTED,  DIRECTED TO THE UNDERSIGNED AT THE
ADDRESS  INDICATED IN THE BANK'S  RECORDS IN THE MANNER  PROVIDED BY  APPLICABLE
STATUTE,  LAW, RULE OF COURT OR OTHERWISE.  FURTHERMORE,  THE UNDERSIGNED WAIVES
ALL NOTICES AND DEMANDS IN  CONNECTION  WITH THE  ENFORCEMENT  OF BANK'S  RIGHTS
HEREUNDER,  AND HEREBY  CONSENTS  TO, AND WAIVES  NOTICE OF THE RELEASE  WITH OR
WITHOUT CONSIDERATION OF UNDERSIGNED OR OF ANY COLLATERAL.

     The loan evidenced hereby has been made and this Note has been delivered at
the Bank's main office.  This Note shall be governed and construed in accordance
with the laws of the State of  Illinois,  in which state it shall be  performed,
and  shall  be  binding  upon  the  Undersigned  and  their   respective   legal
representatives,  successors and assigns.  If this Note contains any blanks when
executed by the Undersigned the Bank is hereby authorized, without notice to the
Undersigned  to complete  any such blanks  according to the terms upon which the
loan or loans were granted. Wherever possible, each provision of this Note shall
be interpreted in such manner as to be effective and valid under applicable law,
but if any  provision of this Note shall be  prohibited  by or be invalid  under
such law, such provision shall be severable, and be ineffective to the extent of
such prohibition or invalidity, without invalidating the remaining provisions of
this Note.

     The  Undersigned  represents  and warrants to Bank that the  execution  and
delivery of this Note has been duly authorized by resolutions heretofore adopted
by its Board of  Directors  in  accordance  with law and its  bylaws,  that said
resolutions  have not been amended nor  rescinded,  are in full force and effect
and that the officer or officers  executing and delivering  this Note for and on
behalf of the  Undersigned,  is duly  authorized  so to act.  Bank, in extending
financial  accommodations  to the  Undersigned,  is expressly acting and relying
upon the aforesaid representations and warranties.


     The  Undersigned,  acknowledges  and agrees that the  lending  relationship
hereby  created  with the Bank is and has been  conducted  on an open and  arm's
length basis in which no fiduciary relationship exists and that the Undersigned,
has  not  relied  and is not  relying  on any  such  fiduciary  relationship  in
consummating the loan(s) evidenced by this Note.

     As used herein,  all  provisions  shall  include the  masculine,  feminine,
neuter, singular and plural thereof, wherever the context and facts require such
construction and in particular the word "Undersigned" shall be so construed.

                                             [SIGNATURE PAGE FOLLOWS]
<PAGE>


     IN WITNESS  WHEREOF,  the  Undersigned  has executed  this Note on the date
above set forth.


                           ASCENT MANAGEMENT, INC.

                           By:  /s/ Patrick J. Mitchell
                              --------------------------------------------------
                           Its: Chairman of the Board and
                                Chief Executive Officer
                              --------------------------------------------------


STATE OF TEXAS    )
                  )SS.
COUNTY OF TARRANT )


     I, the  undersigned,  a  Notary  Public  in and for the  State  and  County
aforesaid,  do hereby  certified  that  before me this day  personally  appeared
Patrick  J.  Mitchell,  known  to me to be  the  Chairman  of the  Board,  Chief
Executive  Officer  and  President  of  Ascent  Management,   Inc.,  a  Delaware
corporation,  and  acknowledged  to me  that  he  executed  and  delivered  this
instrument as his free and voluntary act, for the uses and purposes  therein set
forth.

     IN WITNESS WHEREOF,  I have hereunto set my hand and notarial seal this day
of           , 1999.


                                            ------------------------------------
                                            Notary Public

                                            My Commission Expires:
                                                                  --------------


<PAGE>
                                                                    Exhibit 10.5


                      SECOND AMENDMENT TO CREDIT AGREEMENT



     This Second Amendment to Credit  Agreement (the  "Amendment") is made as of
this 12TH day of August 1999 by and among ASCENT FUNDING,  INC.  (formerly known
as Westbridge Funding  Corporation) (the "Borrower"),  and LASALLE BANK NATIONAL
ASSOCIATION (formerly known as LaSalle National Bank) (the "Bank").

                               W I T N E S S E T H


     WHEREAS,  the  Borrower  and the Bank are  parties to that  certain  Credit
Agreement  dated as of June 6, 1997, as amended from time to time,  (the "Credit
Agreement); and

     WHEREAS,  the parties desire to amend the Credit  Agreement,  as more fully
set forth herein.

     NOW, THEREFORE,  in consideration of the mutual agreements herein contained
and other  good and  valuable  consideration,  the  adequacy  of which is hereby
acknowledged, and subject to the terms and conditions hereof, the parties hereto
agree as follows:

     SECTION 1. DEFINITIONS.  Unless otherwise  defined herein,  all capitalized
shall have the meaning given to them in the Credit Agreement.

     SECTION 2. AMENDMENTS TO CREDIT AGREEMENT.

     2.1 Any and all references to "Westbridge  Funding  Corporation" are hereby
deleted in their entirety and replaced with "Ascent Funding, Inc."

     2.2 Any and all references to "Westbridge Capital Corp." are hereby deleted
in their entirety and replaced with "Ascent Assurance, Inc. "

     2.3 Any and all references to "Westbridge Marketing Corporation" are hereby
deleted in their entirety and replaced with "NationalCare Marketing, Inc. "

     2.4 Any and all references to "LaSalle National Bank" are hereby deleted in
their entirety and replaced with "LaSalle Bank National Association".

     2.5 The definition of "Commitment"  in Section 1.1 of the Credit  Agreement
is hereby deleted in its entirety and replaced with the following in its stead:

     "Commitment  means  the  commitment  of the  Bank to make  Revolving  Loans
hereunder in the  aggregate  amount of  $7,500,000,  as the same may be adjusted
from time to time  pursuant to Section 2.4 or by written  agreement  between the
Borrower and the Bank."

     2.6 The definition of  "Consolidated  GAAP Net Worth" in Section 1.1 of the
Credit  Agreement is hereby deleted in its entire replaced with the following in
its stead:

     "Consolidated  GAAP Net  Worth"  means the sum of (a) the  common  capital
     stock  and  preferred  capital  stock  (including   manditorily  redeemable
     preferred capital stock) and additional paid in capital of the Borrower and
     its Subsidiaries on a consolidated  basis,  plus (without  duplication) (b)
     the amount of retained  earnings  (inclusive of Deferred  Revenues) (or, in
     the case of a deficit,  minus the deficit),  minus (c) treasury stock, plus
     or minus (d) any other  account which is  customarily  added or deducted in
     determining  stockholders' equity (without giving effect to any increase or
     decrease to Consolidated GAAP Net Worth  attributable to the application of
     SFAS No. 115 and 130),  all of which shall be determined on a  consolidated
     basis in accordance with GAAP.

     2.7 The definition of "Eligible  Non-Insurance  Company  Seller" in Section
     1.1 of the Credit  Agreement is hereby deleted in its entirety and replaced
     with the following in its stead:

     "Eligible Non-Insurance Company Seller" means, (i) as of the date of this
     Agreement, any of ASSP, HCO, HCO Marketing, LSMG, Senior Benefits of Texas,
     NationalCare Marketing,  Inc. and Freedom Marketing, (ii) as of February 1,
     1999, Senior Benefits, LLC, and (iii) thereafter any other entity which has
     become a party to the Non-Insurance Company Receivables Purchase Agreement,
     and  which  is  reasonably  acceptable  to Bank  based  on such  financial,
     operational and other considerations which the Bank in its discretion deems
     appropriate."

     2.8 The definition of "Revolving Loan  Termination  Date" in Section 1.1 of
     the  Credit  Agreement  is hereby  amended by  deleting  "June 5, 2000" and
     inserting "June 5, 2001 in its stead.

     SECTION 3. CONDITIONS PRECEDENT.  The  effectiveness  of this Amendment is
     expressly   conditioned  upon  satisfaction  of  the  following  conditions
     precedent:

     3.1 The Bank shall have received copies of this Amendment duly executed the
     Borrower.

     3.2 The Bank shall have received  such other  documents,  certificates  and
     assurances as it shall reasonably request.

     SECTION 4.  REAFFIRMATION OF THE BORROWER.  The Borrower hereby  represents
     and warrants to the Bank that (i) the  warranties set forth in Article 5 of
     the Credit  Agreement  are true and  correct on and as of the date  hereof,
     except to the  extent  (a) that any such  warranties  relate to a  specific
     date,  or (b) changes  thereto are a result of  transactions  for which the
     Bank has granted its  consent;  (ii) the  Borrower is on the date hereof in
     compliance  with all of the terms and  provisions  set forth in the  Credit
     Agreement as hereby  amended;  and (iii) upon execution  hereof no Event of
     Default has occurred and is continuing or has not previously been waived.

     SECTION  5. FULL FORCE AND EFFECT.  Except as herein  amended,  the Credit
     Agreement  and all other  Loan  Documents  shall  remain in full  force and
     effect.

     SECTION 6.  COUNTERPARTS.  This  Amendment  may be  executed in two or more
     counterparts,  each of which shall be deemed an original,  but all of which
     together shall constitute one and the same document.

                                             [SIGNATURE PAGE FOLLOWS]
<PAGE>
     IN WITNESS WHEREOF,  the parties hereto have executed this Amendment on the
     day and year specified above.


                                             ASCENT FUNDING, INC.



                                             By:  /s/Patrick J. Mitchell
                                                 -------------------------------
                                             Name:  Patrick J. Mitchell
                                                 -------------------------------
                                             Title: Chairman of the Board and
                                                    Chief Executive Officer
                                                 -------------------------------



                                             LASALLE BANK NATIONAL ASSOCIATION



                                             By:  /s/ Janet R. Gates
                                                 -------------------------------
                                             Name:  Janet R. Gates
                                                 -------------------------------
                                             Title: First Vice President
                                                 -------------------------------


<PAGE>





                   ACKNOWLEDGEMENT AND AGREEMENT OF GUARANTOR

     The  undersigned,  ASCENT  ASSURANCE,  INC.  (formerly  Westbridge  Capital
Corp.),  hereby ratifies and reaffirms that certain  Guaranty dated June 6, 1997
(the  "Guaranty")  made by the  undersigned  in favor of LaSalle  Bank  National
Association (the "Bank") and each of the terms and provisions contained therein,
and agrees that the Guaranty  continues in full force and effect  following  the
execution and delivery of the foregoing  Amendment.  The undersigned  represents
and warrants to the Bank that the Guaranty was, on the date of the execution and
delivery thereof,  and continues to be, the valid and binding  obligation of the
undersigned  enforceable in accordance  with its terms and that the  undersigned
has no claims or defenses to the  enforcement  of the rights and remedies of the
Bank under the Guaranty.

     IN WITNESS WHEREOF, this Acknowledgment and Agreement of Guarantor has been
duly authorized as of this 12th day of August, 1999.

                                       ASCENT ASSURANCE, INC.


                                       By:  /s/Patrick J. Mitchell
                                              ----------------------------------
                                       Name:  Patrick J. Mitchell
                                              ----------------------------------
                                       Title: Chairman of the Board and
                                              Chief Executive Officer
                                              ----------------------------------



<PAGE>
                                                                    Exhibit 10.6



                     SECOND AMENDMENT TO GUARANTY AGREEMENT



     This SECOND AMENDMENT TO GUARANTY  AGREEMENT (this "Amendment") dated as of
July 20, 1999, is made by ASCENT ASSURANCE,  INC.  (formerly known as Westbridge
Capital Corp.),  a Delaware  corporation  (the  "Guarantor")  for the benefit of
LASALLE BANK NATIONAL ASSOCIATION (formerly known as LaSalle National Bank) (the
"Bank"),  its  successors  and  assigns  and any and  all  other  Beneficiaries.
Capitalized  terms used  herein  without  definition  shall have the  respective
meanings  assigned to them in that certain Guaranty  Agreement made by Guarantor
in favor of Bank and dated as of June 26, 1997 (the "Guaranty Agreement").

                                 R E C I T A L S

     A. Pursuant to that certain Credit  Agreement dated as of June 6, 1997 (the
"Credit Agreement")  between Ascent Funding,  Inc. (formerly known as Westbridge
Funding  Corporation)  (the "Debtor") and the Bank, the Bank agreed,  on certain
terms and conditions, to make revolving loans to the Debtor from time to time in
an  aggregate  principal  amount  at any  one  time  outstanding  not to  exceed
$20,000,000 (the "Revolving Loans").

     B. The Debtor is an indirect wholly-owned subsidiary of the Guarantor.

     C. As a condition to making the Revolving Loans, the Bank required that the
Guarantor execute and deliver the Guaranty Agreement.

     D.  Pursuant to that certain  Installment  Note dated of even date herewith
(the "Installment  Note"),  made by Ascent Management,  Inc. ("AMI") in favor of
the Bank, the Bank has agreed,  on certain terms and conditions,  to make a term
loan to AMI in an aggregate principal amount not to exceed $3,300,000 (the "Term
Loan").

     E. AMI is a wholly-owned subsidiary of the Guarantor.

     F. As a condition to making the Term Loan,  the Bank has required  that the
Guarantor execute and deliver this Amendment to the Guaranty Agreement.


     NOW, THEREFORE, the Guarantor hereby agrees as follows:

1.   Amendments to Guaranty Agreement.

     1.1 The  Guaranty  Agreement  is  hereby  amended  so that  all  references
contained  therein to "Debtor"  shall be deemed to include,  in the  appropriate
context,  AMI. In addition,  the term "Obligations" is hereby amended to include
all  obligations  and  liabilities  of AMI  arising  out of or  relating  to the
Installment Note, of every kind and description,  howsoever created, whether now
existing or hereafter created,  including,  without limitation, the indebtedness
evidenced from time to time pursuant to the Installment  Note, and shall include
all other  liabilities of AMI to the Bank arising out of or relating to the Term
Loan pursuant to any and all documents delivered by AMI to the Bank with respect
to the Term Loan. The term "Obligation  Agreements" is hereby amended to include
the Installment Note and any other agreement  executed and delivered to the Bank
by AMI or any third party relating thereto,  including,  without limitation, any
guaranties, security agreements, pledge agreements and the like.

2.  Reaffirmation of Guaranty  Agreement.  The Guarantor hereby reaffirms to the
Bank that, except as modified hereby,  the Guaranty Agreement is hereby restated
in its entirety and remains in full force and effect.

3. Required Consents and Approval.  Notwithstanding anything contained herein to
the  contrary,  the Pledge  Approval  (as such term is  defined in the  Guaranty
Agreement)  shall not apply to AMI,  and in no event will the  capital  stock of
National Foundation Life Insurance Company, National Financial Insurance Company
or American  Insurance Company of Texas,  pledged to the Bank in connection with
the Revolving  Loan under the Credit  Agreement  constitute  collateral  for the
Installment Note or any other obligations related thereto.

4. Governing  Law. This  Amendment has been  delivered in Chicago,  Illinois and
shall be governed by and construed in accordance with the provisions of the laws
and decisions of the State of Illinois, without giving effect to the conflict of
law principles thereunder.

5.  Counterparts.  This  Amendment may be executed in one or more  counterparts,
each of which  shall be  deemed an  original,  but all of which  together  shall
constitute  one and  the  same  instrument.  One or  more  counterparts  of this
Amendment may be delivered by  telecopier,  with the  intention  that they shall
have the same effect as an original counterpart thereof.


                                                      [SIGNATURE PAGE FOLLOWS]
<PAGE>
IN WITNESS  WHEREOF,  each of the parties hereto has caused this Amendment to be
duly  executed  and  delivered  as of the day IN  WITNESS  WHEREOF,  each of the
parties hereto has caused this Amendment to be duly executed and delivered as of
the day and year first above written.


                              BANK:

                              LASALLE BANK NATIONAL ASSOCIATION


                              By:  /s/ Janet R. Gates
                                   ---------------------------------------------
                              Its: First Vice President
                                   ---------------------------------------------




                              GUARANTOR:

                              ASCENT ASSURANCE, INC.


                              By:  /s/ Patrick J. Mitchell
                                  ----------------------------------------------
                              Its: Chairman of the Board and
                                   Chief Executive Officer
                                  ---------------------------------------------