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, 2000

                          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 14, 2000



<PAGE>



                             ASCENT ASSURANCE, INC.
                               INDEX TO FORM 10-Q

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

PART 1 - FINANCIAL INFORMATION                                          Page No.
------------------------------                                          --------

Item 1 - Financial Statements

Ascent Assurance, Inc. Condensed Consolidated Balance Sheets at
September 30, 2000 and December 31, 1999                                     2

Ascent Assurance, Inc. Condensed Consolidated Statements of Operations
for the Three Months Ended September 30, 2000 and 1999, the Nine Months
Ended September 30, 2000 and the Six Months Ended September 30, 1999         3

Westbridge Capital Corp. Condensed Consolidated Statement of Operations
for the Three Months ended March 31, 1999                                    4

Ascent Assurance, Inc. Condensed Consolidated Statements of
Comprehensive Income for the Three Months Ended September 30, 2000 and
1999, the Nine Months Ended September 30, 2000 and the Six Months Ended
September 30, 1999                                                           5

Westbridge Capital Corp. Consolidated Statement of Comprehensive Income
for the Three Months Ended March 31, 1999                                    6

Ascent Assurance, Inc. Condensed Consolidated Statements of Cash Flows
for the Three Months Ended September 30, 2000 and 1999, the Nine Months
Ended September 30, 2000 and the Six Months Ended September 30, 1999         7

Westbridge Capital Corp. Condensed Consolidated Statement of Cash Flows
for the Three Months Ended March 31, 1999                                    8

Ascent Assurance, Inc. Consolidated Statement of Changes in Stockholders'
Equity for the Nine Months Ended September 30, 2000                          9

Notes to Condensed Consolidated Financial Statements                        10

Item 2 - Management's Discussion and Analysis of Financial Condition and
Results of Operations

General                                                                     13
Business Overview                                                           13
Operating Results                                                           14
Financial Condition                                                         16
Liquidity, Capital Resources and Statutory Capital and Surplus              18
Forward-Looking Statements                                                  20

PART II - OTHER INFORMATION

Item 6 - Exhibits and Reports on Form 8-K                                   22



<PAGE>


                             ASCENT ASSURANCE, INC.
                      CONDENSED CONSOLIDATED BALANCE SHEETS

                                                  September 30,   December 31,
                                                      2000            1999
                                                   (Unaudited)      (Audited)
                                                  -------------   ------------
                                                         (in thousands,
                                                     except per share data)
Assets
Investments:
  Fixed Maturities:
    Available-for-sale, at market value
    (amortized cost $108,807 and $103,436)        $   103,724     $   97,563
  Equity securities, at market (cost $1,365)            1,309          1,313
  Other investments                                       430            413
  Short-term investments                               11,490         10,904
                                                  -------------   ------------
     Total Investments                                116,953        110,193

Cash                                                    6,063          5,110
Accrued investment income                               1,820          2,030
Receivables from agents, net of allowance
  for doubtful accounts of $5,806 and $6,060            8,422          7,062
Deferred policy acquisition costs                      25,286         19,393
Deferred tax asset, net                                 7,917          7,086
Property and equipment, net of accumulated
  depreciation of $2,435 and $1,546                     6,506          6,272
Other assets                                            6,379          6,544
                                                  -------------   ------------
     Total Assets                                 $   179,346     $  163,690
                                                  =============   ============

Liabilities, Preferred Stock and Stockholders' Equity
Liabilities:
  Policy liabilities and accruals:
     Future policy benefits                       $    60,953     $   57,119
     Claim reserves                                    42,998         38,776
                                                  -------------   ------------
     Total policy liabilities and accruals            103,951         95,895

Accounts payable and other liabilities                 20,351         13,592
Notes payable                                           9,651          7,162
                                                  -------------   ------------
     Total liabilities                                133,953        116,649
                                                  -------------   ------------

Redeemable Convertible Preferred Stock                 25,130         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                       27,534         27,338
  Accumulated other comprehensive loss,
    net of tax                                         (3,392)        (3,851)
  Retained (deficit) earnings                          (3,944)           232
                                                  -------------   ------------
     Total Stockholders' Equity                        20,263         23,784
                                                  -------------   ------------
     Total Liabilities, Preferred Stock
       and Stockholders' Equity                   $   179,346     $  163,690
                                                  =============   ============

        See the Notes to the Condensed Consolidated Financial Statements.


<PAGE>


                             ASCENT ASSURANCE, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)
<TABLE>

                                                                 Three Months                Nine Months      Six Months
                                                                     Ended                      Ended            Ended
                                                                 September 30,              September 30,    September 30,
                                                        ------------------------------      -------------    -------------
                                                             2000             1999               2000             1999
                                                        -------------    -------------      -------------    -------------
                                                                       (in thousands, except per share data)
Revenues:
  Premiums:
<S>                                                     <C>              <C>                <C>              <C>
     First-year                                         $     8,419      $     4,810        $    22,358      $     8,713
     Renewal                                                 22,412           23,702             66,706           49,373
                                                        -------------    -------------      -------------    -------------
                                                             30,831           28,512             89,064           58,086
  Net investment income                                       2,626            2,222              6,970            4,555
  Fee and service income                                      5,207            4,506             15,397            8,702
  Net realized gain (loss) on investments                        28             (107)              (209)            (170)
                                                        -------------    -------------      -------------    -------------
                                                             38,692           35,133            111,222           71,173
                                                        -------------    -------------      -------------    -------------

Benefits, claims and expenses:
  Benefits and claims                                        24,516           22,619             71,160           44,352
  Amortization of deferred policy acquisition
     costs                                                      780              502              2,001              894
  Commissions                                                 5,062            4,859             14,442            9,796
  General and administrative expenses                         8,094            6,042             22,614           11,987
  Taxes, licenses and fees                                    1,235            1,190              3,939            2,483
  Interest expense on notes payable                             198               85                435              204
Resolution of pre-confirmation contingencies                      -           (1,235)                 -           (1,235)
                                                        -------------    -------------      -------------    -------------
                                                             39,885           34,062            114,591           68,481

(Loss) income before income taxes                            (1,193)           1,071             (3,369)           2,692
Federal income tax benefit (expense)                            406             (364)             1,146             (931)
                                                        -------------    -------------      -------------    -------------
     Net (loss) income                                  $      (787)     $       707        $    (2,223)     $     1,761
                                                        =============    =============      =============    =============

Preferred stock dividends                                       651              596              1,953            1,243
                                                        -------------    -------------      -------------    -------------
(Loss) income applicable to common stockholders         $    (1,438)     $       111        $    (4,176)     $       518
                                                        =============    =============      =============    =============

Basic and diluted (loss) earnings per
   common share                                         $      (.22)     $       .02        $      (.64)     $       .08
                                                        =============    =============      =============    =============

Weighted average shares outstanding:
  Basic                                                       6,500            6,500              6,500            6,500
                                                        =============    =============      =============    =============
  Diluted                                                     6,500            6,500              6,500            6,515
                                                        =============    =============      =============    =============
</TABLE>

        See the Notes to the Condensed Consolidated Financial Statements.


<PAGE>


                            WESTBRIDGE CAPITAL CORP.
                          (now, Ascent Assurance, Inc.)
                 CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
                                    (Audited)

                                                            Three Months Ended
                                                                  March 31, 1999
                                                           ---------------------
                                                           (in thousands, except
                                                               per share data)
Revenues:
  Premiums:
     First-year                                            $          3,121
     Renewal                                                         26,827
                                                           ---------------------
                                                                     29,948
  Net investment income                                               2,562
  Fee and service income                                              4,263
  Net realized gain on investments                                       41
                                                           ---------------------
                                                                     36,814
                                                           ---------------------
Benefits, claims and expenses:
  Benefits and claims                                                21,799
  Amortization of deferred policy acquisition costs                     286
  Commissions                                                         6,134
  General and administrative expenses                                 6,635
  Taxes, licenses and fees                                            1,059
  Interest expense on notes payable                                     119
  Interest expense on retired/canceled debt                             507
                                                           ---------------------
                                                                     36,539
                                                           ---------------------

Income before income taxes                                              275
Federal income tax expense                                              (67)
                                                           ---------------------

     Net income                                            $            208
                                                           =====================

Basic and diluted earnings per common share                $            .03
                                                           =====================

Basic and diluted weighted average shares outstanding                 7,032
                                                           =====================


        See the Notes to the Condensed Consolidated Financial Statements.


<PAGE>


                             ASCENT ASSURANCE, INC.
            CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                                   (Unaudited)
<TABLE>

                                                     Three Months               Nine Months       Six Months
                                                        Ended                      Ended            Ended
                                                     September 30,              September 30,    September 30,
                                            -------------------------------     -------------    -------------
                                                 2000             1999              2000              1999
                                            -------------    -------------      -------------    -------------
                                                                      (in thousands)

<S>                                         <C>              <C>                <C>              <C>
Net (loss) income                           $      (787)     $       707        $    (2,223)     $     1,761
Other comprehensive income (loss):
    Unrealized holding gain (loss)
      arising during period, net of tax             997             (855)               321           (2,869)
    Reclassification adjustment of
      (gain) loss on sales of investments
      included in net income, net of tax            (18)              70                138              111
                                            -------------    -------------      -------------    -------------

Comprehensive gain (loss)                   $       192      $       (78)       $    (1,764)     $      (997)
                                            =============    =============      =============    =============

</TABLE>

        See the Notes to the Condensed Consolidated Financial Statements.


<PAGE>


                            WESTBRIDGE CAPITAL CORP.
                          (now, Ascent Assurance, Inc.)
                 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
                                    (Audited)




                                                Three Months Ended
                                                  March 31, 1999
                                                -------------------
                                                  (in thousands)

Net income                                      $           208
Other comprehensive loss:
  Unrealized holding loss
    arising during period, net of tax                    (1,959)
  Reclassification adjustment of
    gain on sales of investments
    included in net income, net of tax                      (27)
                                                -------------------

Comprehensive loss                              $        (1,778)
                                                ===================


        See the Notes to the Condensed Consolidated Financial Statements.


<PAGE>


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

                                                                         Three Months              Nine Months      Six Months
                                                                            Ended                     Ended           Ended
                                                                        September 30,             September 30,    September 30,
                                                               ------------------------------     -------------    -------------
                                                                   2000              1999              2000             1999
                                                               -------------    -------------     -------------    -------------
                                                                                        (in thousands)
Cash Flow From Operating Activities:

<S>                                                            <C>              <C>               <C>              <C>
Net (loss) income                                              $     (787)      $       707       $    (2,223)     $     1,761
  Adjustments to reconcile net income to cash
  provided by (used for) operating activities
     Decrease in accrued investment income                            203               152               210              165
     Amortization of deferred policy acquisition costs                780               502             2,001              894
     (Increase) decrease in receivables from agents                  (595)               58            (1,360)           1,302
     Addition to deferred policy acquisition costs                 (2,735)           (1,917)           (7,894)          (3,653)
     Decrease (increase) in other assets                              994            (2,011)              165             (945)
     (Decrease) increase in policy liabilities and accruals        (1,922)             (434)            8,056           (2,094)
     Increase (decrease) in accounts payable and other
       liabilities                                                  5,856            (5,486)            6,759           (8,038)
     Decrease (increase) in deferred income taxes, net                118             1,923              (831)             896
     Other, net                                                      (726)              883             1,275            2,275
                                                               -------------    -------------     -------------    -------------
    Net Cash Provided By (Used For) Operating Activities            1,186            (5,623)            6,158           (7,437)
                                                               -------------    -------------     -------------    -------------

Cash Flow From Investing Activities:

    Purchases of fixed maturity investments                       (10,369)             (498)          (19,375)          (3,994)
    Sales of fixed maturity investments                             6,433             1,993            10,147            8,556
    Maturities and calls of fixed maturity investments              1,285             1,420             3,283            2,227
    Net decrease (increase) in short term and other
      investments                                                   3,308             2,050              (603)           2,677
    Property and equipment purchased                                 (326)           (2,046)           (1,146)          (3,209)
                                                               -------------    -------------     -------------    -------------
    Net Cash Provided By (Used For) Investing Activities              331             2,919            (7,694)           6,257
                                                               -------------    -------------     -------------    -------------

Cash Flow From Financing Activities:

    Issuance of notes payable                                         974             4,650             2,862            6,058
    Repayment of notes payable                                        (93)           (1,691)             (373)          (4,678)
                                                               -------------    -------------     -------------    -------------
    Net Cash Provided By Financing Activities                         881             2,959             2,489            1,380
                                                               -------------    -------------     -------------    -------------

    Increase In Cash During Period                                  2,398               255               953              200
    Cash At Beginning Of Period                                     3,665             2,155             5,110            2,210
                                                               -------------    -------------     -------------    -------------
    Cash At End Of Period                                      $    6,063       $     2,410       $     6,063      $     2,410
                                                               =============    =============     =============    =============

</TABLE>

        See the Notes to the Condensed Consolidated Financial Statements.


<PAGE>


                            WESTBRIDGE CAPITAL CORP.
                          (now, Ascent Assurance, Inc.)
                 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                                    (Audited)


                                                             Three Months Ended
                                                                March 31, 1999
                                                             ------------------
                                                               (in thousands)
Cash Flow From Operating Activities:
Net income                                                   $           208
  Adjustments to reconcile net income to cash
  provided by (used for) operating activities:
     Amortization of deferred policy acquisition costs                   286
     Decrease in receivables from agents                               1,678
     Addition to deferred policy acquisition costs                    (1,148)
     Increase in other assets                                         (1,007)
     Decrease in policy liabilities and accruals                      (2,181)
     Increase in accounts payable and other liabilities                4,428
     Increase in deferred income taxes, net                           (1,070)
     Other, net                                                        1,308
                                                              -----------------
     Net Cash Provided By Operating Activities                         2,502
                                                              -----------------

Cash Flow From Investing Activities:
  Proceeds from investments sold:
     Fixed maturities, called or matured                               2,215
     Fixed maturities, sold                                            4,904
     Other investments, sold or matured                                  139
     Cost of investments acquired                                     (5,851)
     Other                                                              (873)
                                                              -----------------
     Net Cash Provided By Investing Activities                           534
                                                              -----------------

Cash Flow From Financing Activities:
  Retirement of senior subordinated debentures                       (15,167)
  Issuance of Preferred Stock                                         15,167
  Issuance of notes payable                                              911
  Repayment of notes payable                                          (2,015)
                                                              -----------------
     Net Cash Used For Financing Activities                           (1,104)
                                                              -----------------

  Increase In Cash During Period                                       1,932
  Cash At Beginning Of Period                                            278
                                                              -----------------
  Cash At End Of Period                                       $        2,210
                                                              =================


        See the Notes to the Condensed Consolidated Financial Statements.


<PAGE>


                             ASCENT ASSURANCE, INC.
            CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
                                   (Unaudited)
                        (in thousands, except share data)

<TABLE>
                                                                                                      Accumulated
                                                    Common Stock         Capital          Other         Retained        Total
                                                    ------------        in Excess     Comprehensive     (Deficit)   Stockholders'
                                                 Shares      Amount    of Par Value        Loss         Earnings        Equity

<S>                                             <C>         <C>        <C>            <C>             <C>           <C>
Balance at December 31, 1999                    6,500,000   $   65     $   27,338     $    (3,851)    $     232     $    23,784

  Net loss                                                                                               (2,223)         (2,223)
  Preferred Stock dividend                                                                               (1,953)         (1,953)
  Other comprehensive gain, net of tax                                                        459                           459
  Amortization of unearned compensation                                       196                                           196
                                               -----------  --------   ------------   -------------   -----------   -------------
Balance at September 30, 2000                   6,500,000   $   65     $   27,534     $    (3,392)    $  (3,944)    $    20,263
                                               ===========  ========   ============   =============   ===========   =============
</TABLE>



        See the Notes to the Condensed Consolidated Financial Statements.

<PAGE>


                             ASCENT ASSURANCE, INC.
                      (formerly, Westbridge Capital Corp.)
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)


NOTE 1 - DESCRIPTION OF BUSINESS

Ascent Assurance,  Inc. ("Ascent"),  a Delaware company incorporated in 1982, is
an insurance holding company engaged in the development, marketing, underwriting
and  administration  of  medical  expense  and  supplemental   health  insurance
products,  primarily to  self-employed  individuals  and small business  owners.
Ascent adopted its corporate  name on March 24, 1999, the date its  predecessor,
Westbridge Capital Corp. ("Westbridge"),  emerged from Chapter 11 reorganization
proceedings (see Note 6).  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  Company's  revenues  result  primarily  from  premiums  and  fees  from the
insurance  products sold by its wholly owned  subsidiaries  National  Foundation
Life  Insurance  Company  ("NFL"),  Freedom  Life  Insurance  Company of America
("FLICA"),  National Financial Insurance Company ("NFIC") and American Insurance
Company of Texas ("AICT",  and together with NFL, NFIC and FLICA,  collectively,
the "Insurance  Subsidiaries") and marketed by NationalCare(R)  Marketing,  Inc.
("NCM"), also a wholly owned subsidiary.  To a lesser extent the Company derives
revenue from (i)  telemarketing  services,  (ii)  printing  services,  and (iii)
renewal  commissions  received by the Company  for sales of  insurance  products
underwritten  primarily by unaffiliated  managed care organizations  (such sales
have been significantly curtailed).

NOTE 2 - ACCOUNTING PRINCIPLES

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 accounting principles generally
accepted  in the United  States  ("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
of normal recurring accruals)  considered necessary for a fair presentation have
been included. Certain reclassifications have been made to 1999 amounts in order
to  conform  to  the  2000  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, 1999.

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,"  Ascent
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 consolidated 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  reporting,  including the
historical  consolidated  financial  statements of Westbridge in this  quarterly
report.

NOTE 3 - EARNINGS PER SHARE ("EPS")

Under GAAP there are two  measures of Earnings  Per Share:  "Basic  Earnings Per
Share" and  "Diluted  Earnings  Per  Share".  Basic EPS is  computed by dividing
income  applicable  to common  shareholders  by the weighted  average  number of
common shares  outstanding  ("average  shares") during the period. To obtain net
income applicable to common  shareholders for EPS computations,  preferred stock
dividends are deducted from net income. EPS for the three months ended March 31,
1999 is computed  based upon the capital  structure of  Westbridge  prior to the
effective date of the plan of reorganization.  As the accrual of preferred stock
dividends was suspended on September 16, 1998, no preferred stock dividends were
deducted in the  computation  of EPS for the three  months ended March 31, 1999.
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.  For the periods shown below,  the impact of common stock options and
convertible notes were anti-dilutive and were not included in the calculation of
EPS. The following table reflects the calculation of basic and diluted EPS:

<TABLE>
                                                                     Ascent                             Westbridge
                                             ------------------------------------------------------    ------------
                                                    Three Months         Nine Months    Six Months     Three Months
                                                       Ended                Ended         Ended           Ended
                                                   September 30,          Sept. 30,      Sept. 30,       March 31,
                                             ------------------------    -----------    -----------    ------------
                                                2000          1999           2000           1999           1999
                                                            (amounts in 000's, except per share amounts)

<S>                                          <C>           <C>           <C>            <C>            <C>
Net (loss) income                            $   (787)     $    707      $  (2,223)     $   1,761      $      208
Preferred Stock dividends                         651           596          1,953          1,243               -
                                             ----------    ----------    -----------    -----------    ------------
(Loss) income applicable to common
  shareholders                               $ (1,438)     $    111      $  (4,176)     $     518      $      208
                                             ==========    ==========    ===========    ===========    ============
Weighted average shares outstanding:
  Basic                                         6,500         6,500          6,500          6,500           7,032
  Diluted                                       6,500         6,500          6,500          6,515           7,032
Basic and diluted (loss) earnings per share  $   (.22)     $    .02      $    (.64)     $     .08      $      .03
                                             ==========    ==========    ===========    ===========    ============
</TABLE>

NOTE 4 - PREFERRED STOCK

Effective  January 31,  2000,  the  Company  declared  and paid the  contractual
dividend of $1,873,965 on its Redeemable Convertible Preferred Stock ("Preferred
Stock"),  which was accrued at December 31, 1999.  The dividend was paid through
the  issuance  of  1,873  additional  shares  of  Preferred  Stock  and  a  $965
distribution of cash.  Dividends on the Company's Preferred Stock are payable in
cash or  through  issuance  of  additional  shares of  Preferred  Stock,  at the
Company's option.



<PAGE>


NOTE 5 - COMMITMENTS AND CONTINGENCIES

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

NOTE 6 - REORGANIZATION EFFECTIVE MARCH 24, 1999

On September  16, 1998,  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.".

The Plan  provided  for the  recapitalization  of  certain  old debt and  equity
interests in Westbridge and the issuance of new equity  securities and warrants.
Additional   information  regarding  the  reorganization  is  disclosed  in  the
Company's 1999 Report on Form 10-K.

NOTE 7 - IMPLEMENTATION OF NEW ACCOUNTING PRONOUNCEMENTS

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 Codification provides guidance for areas
where  statutory  accounting  has been  silent  and  changes  current  statutory
accounting in certain areas.  The Insurance  Department of the State of Domicile
of the Company's Insurance  Subsidiaries has adopted the Codification  effective
January 1, 2001. The Company does not expect Codification guidance to materially
impact statutory surplus.

In  June,  1998  the  FASB  issued  SFAS No.  133,  "Accounting  for  Derivative
Instruments and Hedging  Activities" ("SFAS 133"). This statement (as amended by
SFAS No. 137,  "Accounting for Derivative  Instruments  and Hedging  Activities,
Deferral of the  Effective  Date of SFAS No. 133, an amendment of SFAS No. 133")
is effective for fiscal years beginning  after June 15, 2000. The  pronouncement
established  accounting  and  reporting  standards for  derivative  instruments,
including  certain  derivative  instruments  embedded in other contracts and for
hedging activities. As the Company has not participated in derivative or hedging
activities, the Company's financial statements are not affected by SFAS 133.

In March 2000,  the FASB  issued FASB  Interpretation  No. 44,  "Accounting  for
Certain  Transactions  Involving Stock  Compensation - an  interpretation of APB
Opinion No. 25" ("FIN 44").  The Company  adopted FIN 44 on a prospective  basis
effective July 1, 2000. The adoption of FIN 44 did not have a material impact on
the Company's results of operations, liquidity or financial position.



<PAGE>


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


GENERAL

Ascent Assurance, Inc. ("Ascent"), adopted its corporate name on March 24, 1999,
the date its predecessor,  Westbridge Capital Corp.  ("Westbridge") emerged from
Chapter 11 reorganization proceedings.  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.  For additional  information  regarding the
reorganization and adoption of fresh start accounting,  see Notes 2 and 6 to the
Condensed Consolidated Financial Statements included at Part 1, Item I.

The following discussion provides management's assessment of financial condition
at September 30, 2000 as compared to December 31, 1999 and results of operations
for the three and nine  months  ended  September  30,  2000 as  compared  to the
comparable  1999  periods  for  the  Company.   This   discussion   updates  the
"Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operations"  in the  Company's  1999  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's  revenues  result  primarily  from  premiums  and  fees  from the
insurance  products sold by its wholly owned  subsidiaries  National  Foundation
Life  Insurance  Company  ("NFL"),  Freedom  Life  Insurance  Company of America
("FLICA"),  National Financial Insurance Company ("NFIC") and American Insurance
Company of Texas ("AICT",  and together with NFL, NFIC and FLICA,  collectively,
the "Insurance  Subsidiaries") and marketed by NationalCare(R)  Marketing,  Inc.
("NCM"), also a wholly owned subsidiary.  To a lesser extent the Company derives
revenue from (i)  telemarketing  services,  (ii)  printing  services,  and (iii)
renewal  commissions  received by the Company  for sales of  insurance  products
underwritten  primarily by unaffiliated  managed care organizations  (such sales
have been significantly curtailed).

The product lines currently marketed and underwritten by the Company's Insurance
Subsidiaries  are Medical  Expense  products  and  Specified  Disease  products.
Medical  Expense  products  are  generally  designed to  reimburse  insureds for
eligible  expenses  incurred  for  hospital   confinement,   surgical  expenses,
physician  services,  outpatient  services and the cost of medicines.  Specified
Disease  products  include  indemnity  policies  for  hospital  confinement  and
convalescent  care for  treatment  of specified  diseases  and "event  specific"
policies,  which provide fixed  benefits or lump sum payments upon  diagnoses of
certain types of internal cancer or other catastrophic  diseases.  Historically,
the Company's Insurance Subsidiaries have also underwritten a significant amount
of  Medicare  Supplement  products.  The  underwriting  of  Medicare  Supplement
products was curtailed due to the relatively low margins for these products.

OPERATING RESULTS

Results of  operations  for  Ascent  are  reported  for the three  months  ended
September  30, 2000 and 1999 and for the nine months ended  September  30, 2000.
Results for the nine months ended September 30, 1999 are reported on a pro forma
basis as if Ascent and Westbridge  adopted fresh start  accounting on January 1,
1999 and operated as a single entity.  (In thousands except insurance  operating
ratios.)

<TABLE>
                                                           Three Months Ended               Nine Months Ended
                                                              September 30,                   September 30,
                                                      ----------------------------    -------------------------------
                                                          2000            1999            2000              1999
                                                      ------------    ------------    ------------    ---------------
                                                         Ascent          Ascent          Ascent       Proforma Ascent
<S>                                                   <C>             <C>             <C>             <C>
Premiums                                              $   30,831      $   28,512      $   89,064      $     88,034
Other                                                        960             506           2,455             1,055
                                                      ------------    ------------    ------------    ---------------
Total insurance operating revenue                         31,791          29,018          91,519            89,089

Benefits and claims                                       24,516          22,619          71,160            66,151
Commissions                                                3,515           2,944           9,463             9,427
Amortization of deferred policy acquisition costs            780             502           2,001             1,180
General and administrative expense                         6,257           4,846          17,222            14,987
Taxes licenses and fees                                      988           1,190           3,448             3,542
                                                      ------------    ------------    ------------    ---------------

Total insurance operating expenses                        36,056          32,101         103,294            95,287
                                                      ------------    ------------    ------------    ---------------

     Insurance operating results                          (4,265)         (3,083)        (11,775)           (6,198)
                                                      ------------    ------------    ------------    ---------------

Fee and service income                                     4,247           4,000          12,942            11,910
Fee and service expenses                                  (3,631)         (3,111)        (10,862)          (10,138)
                                                      ------------    ------------    ------------    ---------------

     Fee and service results                                 616             889           2,080             1,772
                                                      ------------    ------------    ------------    ---------------

Net investment income                                      2,626           2,222           6,970             7,117
Net realized gain (loss) on investments                       28            (107)           (209)             (129)
Interest expense on notes payable                           (198)            (85)           (435)             (323)
Resolution of pre-confirmation contingencies                   -           1,235               -             1,235
                                                      ------------    ------------    ------------    ---------------

     (Loss) income before income taxes                    (1,193)          1,071          (3,369)            3,474

Income tax benefit (expense)                                 406            (364)          1,146            (1,216)
                                                      ------------    ------------    ------------    ---------------

     Net (loss) income                                $     (787)     $      707      $   (2,223)     $      2,258
                                                      ============    ============    ============    ===============

Insurance operating ratios*
  Benefits and claims                                       79.5%           79.3%           79.9%             75.1%
  Commissions                                               11.4%           10.3%           10.6%             10.7%
  Amortization of deferred policy acquisition costs          2.5%            1.8%            2.2%              1.3%
  General and administrative expense                        19.7%           16.7%           18.8%             16.8%
  Taxes, licenses and fees                                   3.2%            4.2%            3.9%              4.0%
</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.


<PAGE>


Overview.  For the third  quarter of 2000,  the  Company  incurred a loss before
income taxes of $1.2 million  compared to $1.1 million of income  before  income
taxes for the  corresponding  1999 period.  The unfavorable  variance in pre-tax
income was  principally  attributable  to a 3.0  percentage  point  increase  in
general and administrative expenses which reduced insurance operating results by
$0.9 million. In addition, pre-tax income for the third quarter of 1999 included
$1.2 million of  non-recurring  income  relative to the favorable  resolution of
pre-confirmation contingencies.

For the first nine months ended September 30, 2000, the loss before income taxes
was $3.4 million,  compared to a $3.5 million income for the corresponding  1999
period.  The principal  contributors to the decline in pre-tax income were a 4.8
percentage  point  increase in the benefits and claim  ratio,  a 2.0  percentage
point  increase  in  the  general  and  administrative  expense  ratio  and  the
non-recurring   prior   years'   income  from  the   favorable   resolution   of
pre-confirmation contingencies.

The following narratives discuss the principal components of insurance operating
results.

Premiums.  Premium  revenue,  in  thousands,  for each major product line is set
forth below:

<TABLE>
                                       Three Months Ended               Nine Months Ended
                                          September 30,                   September 30,
                                  ----------------------------    ----------------------------
                                      2000            1999            2000            1999
                                  ------------    ------------    ------------    ------------
                                     Ascent          Ascent          Ascent         Proforma
                                                                                     Ascent
Medical Expense:
<S>                               <C>             <C>             <C>             <C>
  First-year                      $    7,158      $    4,320      $   20,005      $   10,683
  Renewal                             10,301           9,446          27,609          31,047
                                  ------------    ------------    ------------    ------------
    Subtotal                          17,459          13,766          47,614          41,730
                                  ------------    ------------    ------------    ------------
Specified Disease:
  First-year                             325             342           1,051             979
  Renewal                              6,573           6,804          19,867          21,139
                                  ------------    ------------    ------------    ------------
    Subtotal                           6,898           7,146          20,918          22,118
                                  ------------    ------------    ------------    ------------
Medicare Supplement:
  First-year                               -              10               -              32
  Renewal                              5,330           7,325          18,404          23,616
                                  ------------    ------------    ------------    ------------
    Subtotal                           5,330           7,335          18,404          23,648
                                  ------------    ------------    ------------    ------------
Other                                  1,144             265           2,128             538
                                  ------------    ------------    ------------    ------------
    Total Premium Revenue         $   30,831      $   28,512      $   89,064      $   88,034
                                  ============    ============    ============    ============
</TABLE>

Total premiums increased by $2.3 million, or 8%, in the third quarter of 2000 as
compared  to the third  quarter  of 1999 and $1.0  million,  or 1%, for the nine
months of 2000 as compared  to the  corresponding  1999  period as new  business
production  exceeded the expected decline in renewal premiums from older, closed
blocks of  business.  The  Company  is  principally  marketing  medical  expense
products. No medicare supplement products are being marketed.

Benefits and Claims.  Benefits and claims are comprised of (1) claims paid,  (2)
changes in claim reserves for claims incurred (whether or not reported), and (3)
changes in future policy benefit reserves. The increase in the ratio of benefits
and  claims to  premiums  for the first  nine  months  of 2000  compared  to the
corresponding   1999  period  was  due  primarily  to  unfavorable  paid  claims
experience  in the Medical  Expense  line of business  for both  first-year  and
renewal  business.  The Company  continues to pursue  initiatives  to reduce its
benefits  and  claims  to  premium  ratio  including  increased   production  of
profitable products and active premium rate increase  management.  In July 2000,
the Company  began  marketing a new medical  expense  policy in all  significant
marketing regions and discontinued  selling the principal medical expense policy
sold  since  1998.  The new  medical  expense  policy is  designed  to produce a
substantially  lower  benefits  and claims to premium  ratio than the  Company's
discontinued products.

General and Administrative  expense.  For the third quarter of 2000 and the nine
months ended September 30, 2000, general and  administrative  expenses increased
over the comparable  1999 period due  principally to  non-recurring  expenses of
$650,000 related to the  implementation in May, 2000 of the Company's new policy
administration and claims data processing systems.

FINANCIAL CONDITION

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>
                                              September 30, 2000              December 31, 1999
                                          --------------------------     --------------------------
                                               Market                         Market
Fixed Maturity Securities                      Value           %              Value           %
-------------------------------------     --------------   ---------     --------------   ---------
                                          (in thousands)                 (in thousands)
U.S. Government and governmental
  agencies and authorities (except
<S>                                       <C>               <C>          <C>              <C>
  mortgage-backed)                        $     10,097         9.7       $     10,688        11.0
Finance                                         23,661        22.8             23,950        24.5
Public utilities                                 6,420         6.2              9,128         9.4
Mortgage-backed and asset-backed                17,050        16.5              7,725         7.9
States, municipalities and political
  subdivisions                                   1,905         1.8              1,867         1.9
All other corporate bonds                       44,591        43.0             44,205        45.3
                                          --------------   ---------     --------------   ---------
     Total fixed maturity securities      $    103,724       100.0       $     97,563       100.0
                                          ==============   =========     ==============   =========
</TABLE>

The following  table  indicates by rating the composition of the Company's fixed
maturity securities portfolio, excluding short-term investments and certificates
of  deposit.  Ratings  are the lower of those  assigned 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
NAIC's  designation or the rating assigned to comparable debt outstanding of the
same issuer.  NAIC 1 fixed maturity  securities have been classified as "A" (and
above) and NAIC 2 fixed maturity securities have been classified as "BBB".

<TABLE>
                                          September 30, 2000              December 31, 1999
                                      --------------------------     -------------------------
Composition of Fixed Maturity             Market                         Market
Securities by Rating                      Value            %             Value           %
----------------------------------    --------------   ---------     --------------  ---------
                                      (in thousands)                 (in thousands)
Ratings
-------
Investment grade:
<S>                                   <C>              <C>           <C>             <C>
  U.S. Government and agencies        $     22,603        21.8       $    18,414        18.9
  AAA                                        5,828         5.6            1,865          1.9
  AA                                         8,781         8.5           10,277         10.5
  A                                         37,365        36.0           35,823         36.7
  BBB                                       28,050        27.1           29,732         30.5
Non-Investment grade:
  BB                                           642         0.6            1,133          1.2
  B and below                                  455         0.4              319          0.3
                                      --------------   ---------     -------------   ---------
  Total fixed maturity securities     $    103,724       100.0       $    97,563       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,
2000 and December 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>
                                                    September 30, 2000             December 31, 1999
                                               --------------------------     --------------------------
Composition of Fixed Maturity                       Market                        Market
Securities by Maturity                              Value           %             Value            %
--------------------------------------------   --------------   ---------     --------------   ---------
                                               (in thousands)                 (in thousands)
Scheduled Maturity
<S>                                            <C>                  <C>       <C>                  <C>
Due in one year or less                        $      5,842         5.6       $      4,012         4.1
Due after one year through five years                27,980        27.0             33,311        34.2
Due after five years through ten years               28,802        27.8             26,367        27.0
Due after ten years                                  24,050        23.2             26,148        26.8
Mortgage-backed and asset-backed securities          17,050        16.4              7,725         7.9
                                               --------------   ---------     --------------   ---------
     Total fixed maturity securities           $    103,724       100.0       $     97,563       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 $43.0 million at September 30,
2000 as  compared  to $38.8  million  at  December  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;  (4) writings of significant  blocks of new business
and (5)  significant  changes  in claims  payment  patterns.  As a result of the
implementation of a new claims  administration system in May 2000, the Company's
claims payment  pattern has  accelerated.  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
$61.0 million at September 30, 2000 as compared to $57.1 million at December 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 and advances from non-insurance  subsidiaries.
The  Company's  principal  uses of cash  are for  capital  contributions  to its
Insurance  Subsidiaries  and general and  administrative  expenses.  The Company
funded capital  contributions to its Insurance  Subsidiaries of $2.0 million and
$4.8  million  during  the three  and nine  months  ended  September  30,  2000,
respectively, as compared to $3.0 million and $3.4 million for the corresponding
prior year periods. The Company expects to make additional  contributions to its
Insurance  Subsidiaries  to support  planned growth in 2000 and 2001.  Continued
adverse paid claims experience in Medical Expense products could have a material
adverse  impact  on  the  Company's  ability  to  provide   sufficient   capital
contributions  to its Insurance  Subsidiaries to support planned growth and meet
minimum  statutory capital and surplus  requirements.  As of September 30, 2000,
Ascent held  approximately $6.9 million in unrestricted cash and invested assets
as compared to $8.7 million at December 31, 1999.

Dividends on Ascent's Redeemable Convertible Preferred Stock ("Preferred Stock")
may be paid in cash or by issuance of additional  shares of Preferred  Stock, at
the Company's  option.  Preferred Stock dividends  accrued for 1999 were paid in
January 2000 through the issuance of 1,873 additional  shares of Preferred Stock
and a $965  distribution  of cash. For the three and nine months ended September
30, 2000,  preferred stock  dividends of $651,000 amd $1,953,000,  respectively,
were accrued.

Insurance   Subsidiaries.   The  primary  sources  of  cash  for  the  Insurance
Subsidiaries  are  premiums,   sales  and  maturities  of  invested  assets  and
investment  income  while the  primary  uses of cash are  benefits  and  claims,
commissions,  general and administrative expenses, and taxes, licenses and fees.
During 2000, cash  contributions of $4.8 million have been provided by Ascent to
its  Insurance   Subsidiaries  to  maintain   statutory  surplus  (see  "Ascent"
discussion above). The Company's  Insurance  Subsidiaries have recorded combined
statutory  losses of $10.0 million for the nine months ended  September 30, 2000
as compared to $5.3 million for the  corresponding  1999 period.  The  increased
statutory  losses  resulted from i) higher than expected claims and benefits for
Medical  Expense  products and ii) costs  associated with increased new business
production  which  must  be  expensed  under  statutory   accounting  (for  GAAP
accounting,  such costs are  deferred  and  amortized  as related  premiums  are
recorded).

Dividends paid by the Company's insurance subsidiaries are determined by and are
subject to the  regulations of the insurance laws and practices of the insurance
departments of their respective states of domicile.  During the third quarter of
2000, NFL and FLICA  redomesticated from the states of Delaware and Mississippi,
respectively,  to the state of Texas. As a result, NFL, FLICA, NFIC and AICT are
Texas  domestic  companies and are subject to regulation  under Texas  insurance
laws. The Insurance Subsidiaries are precluded from paying dividends during 2000
without prior  approval of the Texas  Insurance  Commissioner  as the companies'
earned  surplus is negative.  On September 29, 2000,  NFL  transferred  its 100%
ownership of FLICA to Ascent through an extraordinary  dividend  approved by the
Texas Department of Insurance.

Inflation  will affect  claim costs on the  Company's  Medicare  Supplement  and
Medical Expense products.  Costs associated with a hospital stay and the amounts
reimbursed by the Medicare  program are each  determined,  in part, based on the
rate of inflation.  If hospital and other  medical costs that are  reimbursed by
the Medicare program increase,  claim costs on the Medicare  Supplement products
will  increase.  Similarly,  as the hospital and other medical  costs  increase,
claim costs on the  Medical  Expense  products  will  increase.  The Company has
somewhat   mitigated  its  exposure  to  inflation  in   incorporating   certain
limitations on the maximum  benefits which may be paid under its policies and by
filing for premium rate increases as necessary.

Consolidated.  The  Company's  consolidated  net cash  provided  by  (used  for)
operations totaled $1.2 million and $(5.6) million for the third quarter of 2000
and 1999, respectively.  The increase in cash flow from operations was primarily
attributable to an increase in accounts payable and other liabilities related to
the disbursement of claim payments.

Net cash provided by investing activities for the third quarter of 2000 and 1999
totaled $0.3 million and $2.9 million, respectively.  Cash provided by investing
activities for the third quarter of 1999 was used to fund operational activities
compared  to  the   corresponding   quarter  of  2000  where   operations   were
self-funding.

Net cash provided by financing  activities totaled $0.9 million and $3.0 million
for the third  quarter  of 2000 and  1999,  respectively.  Financing  activities
during the third quarter of 2000 include $1.0 million in  borrowings  related to
the  Company's  receivable  financing  program  and $0.1  million in  repayments
related to the term loan facility.  Financing  activities for the  corresponding
period in 1999  included  $1.7  million of  repayments  and $1.4  million of new
borrowings  related to the  Company's  receivables  financing  program  and $3.3
million in new borrowings under the term loan facility.

In the ordinary course of business, the Company advances commissions on policies
written by its general  agencies  and their  agents.  The Company  finances  the
majority of its obligations to make commission  advances through Ascent Funding,
Inc.  ("AFI"),  an indirect wholly owned  subsidiary of Ascent which has entered
into a  Credit  Agreement  (the  "Credit  Agreement")  with  LaSalle  Bank N. A.
("LaSalle"). This Credit Agreement, as amended, provides AFI with a $7.5 million
revolving  loan  facility,  which expires on June 5, 2001.  The proceeds of this
facility  are used to purchase  agent  advance  receivables  from the  Insurance
Subsidiaries and certain affiliated marketing companies.  At September 30, 2000,
approximately $6.7 million was outstanding under the Credit Agreement. Under the
terms of the Credit  Agreement,  agent  advances made by the Company  within six
months of the  expiration  date (after  December 5, 2000) are not  eligible  for
financing.  LaSalle has provided the Company  with a commitment  letter  stating
that the expiration date of the Credit  Agreement will be extended until June 5,
2002.  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,  FLICA  and  NFIC as
collateral for that guaranty (the "Guaranty Agreement").

In July 1999, Ascent  Management,  Inc. ("AMI") entered into 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,  2000,  approximately  $2.9  million was
outstanding under the term loan facility.

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:

|X|  the effect of economic and market conditions

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

|X|  actions that may be taken by insurance regulatory authorities

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

|X|  the  difficulty  in  controlling  health  care  costs and  integrating  new
     operations

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

|X|  the  ability  of  management   to  return  the   Company's   operations  to
     profitability, and

|X|  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 10-K for the Year
Ended  December 31, 1999 and Form 10-Q for the Three Months Ended June 30, 2000.
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.
                                     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).

3.3    Amendment to the By-Laws of the Company, effective as of April 5, 2000.

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)

10.4   Installment Note Agreement dated July 20, 1999 between Ascent Management,
       Inc. and LaSalle Bank National Association  (incorporated by reference to
       Exhibit  10.4 to the  Company's  Quarterly  Report  on Form  10-Q for the
       quarter ended September 30, 1999).

10.5   Second Amendment to Credit Agreement dated August 12, 1999 between Ascent
       Funding,  Inc. and LaSalle Bank  National  Association  (incorporated  by
       reference to Exhibit 10.5 to the Company's  Quarterly Report on Form 10-Q
       for the quarter ended September 30, 1999).

10.6   Second Amendment to Guaranty Agreement dated July 20, 1999 between Ascent
       Assurance,  Inc. and LaSalle Bank National  Association  (incorporated by
       reference to Exhibit 10.6 to the Company's  Quarterly Report on Form 10-Q
       for the quarter ended September 30, 1999).

10.7   Third Amendment to Guaranty Agreement dated April 17, 2000 between Ascent
       Assurance,  Inc. and LaSalle Bank National  Association  (incorporated by
       reference to Exhibit 10.7 to the Company's  Quarterly Report on Form 10-Q
       for the quarter ended June 30, 2000).

10.8   Extension of Employment Agreement, dated as of September 15, 1998, by and
       among  the  Company,  Westbridge  Management  Corp.  and Mr.  Patrick  J.
       Mitchell  (incorporated  by reference  to Exhibit  10.8 to the  Company's
       Quarterly Report on Form 10-Q for the quarter ended June 30, 2000).

10.9   Extension of Employment Agreement, dated as of September 15, 1998, by and
       among the Company, Westbridge Management Corp. and Mr. Patrick H. O'Neill
       (incorporated  by reference to Exhibit  10.9 to the  Company's  Quarterly
       Report on Form 10-Q for the quarter ended June 30, 2000).

10.10  Fourth  Amendment  to Guaranty  Agreement  dated  August 10, 2000 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, 2000.


<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,
                                Chief Financial Officer and Treasurer
                                (Principal Financial and
                                Accounting Officer)
















Dated at Fort Worth, Texas
November 20, 2000