<PAGE>   1
                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB

(Mark One)
[X]      QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
         ACT OF 1934
         For the quarterly period ended September 30, 1998

[ ]      TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE EXCHANGE ACT For
         the transition period from _______ to ________ 
         Commission file number 0-23637

                              THE WMA CORPORATION
                 (Name of small business issuer in its charter)

              DELAWARE                                      58-2179041
   (State or other jurisdiction of                         (IRS Employer
   Incorporation or organization)                       Identification No.)

                11315 JOHNS CREEK PARKWAY, DULUTH, GEORGIA 30097
                    (Address of principal executive offices)

Issuer's telephone number: (770) 248-3311

          Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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

                APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
                   PROCEEDINGS DURING THE PRECEDING FIVE YEARS

         Check whether the registrant filed all documents and reports required
to be filed by Section 12, 13, or 15(d) of the Exchange Act after the
distribution of securities under a plan confirmed by a court. Yes No

                      APPLICABLE ONLY TO CORPORATE ISSUERS

          State the number of shares outstanding of each of the Issuer's classes
of common equity, as of the latest practicable date:

          As of September 30, 1998, there were 2,495,010 shares of common stock
(.001 par value) outstanding.

          Transitional Small Business Disclosure Format (Check one): Yes  No X


                                       1
<PAGE>   2




                                TABLE OF CONTENTS

                                     PART I

<TABLE>
<CAPTION>
                                                                      PAGE NO.
                                                                      --------

<S>         <C>                                                       <C>
ITEM 1      Financial Statements                                          3

ITEM 2      Management's Discussion and Analysis of Financial             7
            Condition and Results of Operations

                                     PART II

ITEM 1      Legal Proceedings                                            17
ITEM 2      Changes in Securities                                        17
ITEM 3      Defaults Upon Senior Securities                              17
ITEM 4      Submission of Matters to a Vote of Security Holders          17
ITEM 5      Other Information                                            17
ITEM 6      Exhibits and Reports on Form 8-K                             19
</TABLE>


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                                       2
<PAGE>   3



                               THE WMA CORPORATION

                           CONSOLIDATED BALANCE SHEETS

                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                     SEPTEMBER 30,           DECEMBER 31,
                                                                                         1998                   1997
                                                                                      ------------           ------------
<S>                                                                                   <C>                    <C>         
                                  ASSETS
Fixed maturity securities - available for sale (amortized cost
  of $9,676,778 and $17,686,390  for 1998 and 1997, respectively)                     $ 10,094,509           $ 17,782,055
Equity securities - available for sale (cost of  $487,733 for 1998 and 1997)               660,563                630,929
                                                                                      ------------           ------------
    Total investments                                                                   10,755,072             18,412,984
Cash and cash equivalents                                                                6,655,488              1,469,663
Investment income due and accrued                                                          148,596                257,629
Reinsurance balances receivable                                                             61,534                183,524
Prepaid expenses                                                                           792,277                113,243
Deferred acquisition costs                                                              20,283,359              4,503,338
Deferred organization costs (net of accumulated amortization of $89,456
  and $62,128 at 1998 and 1997, respectively)                                               97,413                124,741
Due from World Marketing Alliance, Inc.                                                      2,607                     --
Other assets                                                                                 2,918                    783
                                                                                      ------------           ------------
    Total assets                                                                      $ 38,799,264           $ 25,065,905
                                                                                      ============           ============

                   LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
  Future policy benefits                                                              $  1,935,474           $  1,293,917
  Reinsurance balances payable                                                           5,605,723                434,443
  Accrued expenses                                                                          42,500                 53,735
  Accounts payable                                                                         118,067                105,108
  Due to WMA Management Services, Inc.                                                          --                120,000
  Due to World Marketing Alliance, Inc.                                                         --                  1,916
  Short term debt                                                                        5,000,000                     --
  Deferred tax liability                                                                 2,025,334                980,411
                                                                                      ------------           ------------
    Total liabilities                                                                   14,727,098              2,989,530

Stockholders' equity:
  Common stock, par value $.001, 10,000,000 authorized: 2,500,000
     shares issued in 1998 and 1997                                                          2,500                  2,500
  Additional paid-in capital                                                            20,228,973             20,228,973
  Accumulated other comprehensive income                                                   389,131                157,670
  Retained earnings                                                                      3,501,462              1,709,232
  Treasury stock, at cost (4,990 and 2,200 for 1998 and 1997,
     respectively)                                                                         (49,900)               (22,000)
                                                                                      ------------           ------------
    Total stockholders' equity                                                          24,072,166             22,076,375
                                                                                      ------------           ------------
    Total liabilities and stockholders' equity                                        $ 38,799,264           $ 25,065,905
                                                                                      ============           ============
</TABLE>


          See accompanying notes to consolidated financial statements.


                                       3
<PAGE>   4



                               THE WMA CORPORATION

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                 THREE MONTHS ENDED                     NINE MONTHS ENDED
                                                                    SEPTEMBER 30,                         SEPTEMBER 30,
                                                               1998                1997                1998               1997
                                                           -----------         -----------         -----------         -----------
<S>                                                        <C>                 <C>                 <C>                 <C>        
Revenues:
  Premiums                                                 $ 1,853,639         $ 1,388,417         $ 5,383,901         $ 3,652,644
  Reinsured policy revenues                                  1,346,430             100,756           2,236,421             100,756
  Net investment income                                        257,979             307,945             779,894             835,972
  Net realized gains on investments                            111,416                  --             101,719                 645
                                                           -----------         -----------         -----------         -----------
    Total revenue                                            3,569,464           1,797,118           8,501,935           4,590,017
Benefits and expenses:
  Benefits, claims and settlement expenses                     602,228             660,835           2,438,647           1,655,724
  Reinsurance premium allowances, net                          728,749             421,144           1,808,581           1,070,003
  Amortization of deferred acquisition costs, net              377,136               8,178             933,918                 981
  Professional fees and other expenses                         239,285              86,347             424,244             182,835
  Management fees to WMA Management Services, Inc.                  --              30,000                  --              90,000
  Consulting fees to World Marketing Alliance, Inc.                 --              12,750             178,632              59,051
                                                           -----------         -----------         -----------         -----------
    Total benefits and expenses                              1,947,398           1,219,254           5,784,022           3,058,594
                                                           -----------         -----------         -----------         -----------
    Income before income taxes                               1,622,066             577,864           2,717,913           1,531,423
Income tax expense                                            (552,035)           (137,585)           (925,685)           (537,658)
                                                           -----------         -----------         -----------         -----------
    Net income after income taxes                          $ 1,070,031         $   440,279         $ 1,792,228         $   993,765
                                                           ===========         ===========         ===========         ===========
Basic and diluted income per share                         $      0.43         $      0.18         $      0.72         $      0.41
                                                           ===========         ===========         ===========         ===========
Weighted-average common shares
  outstanding                                                2,495,010           2,411,742           2,496,018           2,402,893
                                                           ===========         ===========         ===========         ===========
</TABLE>



          See accompanying notes to consolidated financial statements.


                                       4
<PAGE>   5



                               THE WMA CORPORATION
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
<TABLE>
<CAPTION>
                                                                     NINE MONTHS ENDED
                                                                        SEPTEMBER 30,
                                                                   1998                1997
                                                              ------------         -----------
<S>                                                           <C>                  <C>        
Cash flows from operating activities:
  Net income                                                  $  1,792,228         $   993,765
  Adjustments to reconcile net income to net cash
    used in operating activities
  Amortization                                                     961,246              28,309
  Deferred tax expense                                             925,685             537,658
  Change in:
    Investment income due and accrued                              109,033             (69,260)
    Reinsurance balances receivable                                121,991             (17,385)
    Deferred acquisition costs                                 (16,713,939)         (2,650,930)
    Prepaid expenses                                              (679,034)            (32,922)
    Due from World Marketing Alliance, Inc.                         (2,607)                 --
    Other assets                                                    (2,135)                 --
    Future policy benefits                                         641,557             360,397
    Reinsurance balances payable                                 5,171,280             278,129
    Accrued expenses                                               (11,235)             10,492
    Accounts payable                                                12,959             (60,288)
    Due to WMA Management Services, Inc.                          (120,000)             34,780
    Due to World Marketing Alliance, Inc.                           (1,916)             94,792
                                                              ------------         -----------
      Net cash used in operating activities                     (7,794,887)           (492,463)
                                                              ------------         -----------

Cash flows from investing activities:
  Proceeds from sales of available-for-sale securities           8,008,612           2,670,299
  Purchase of available-for-sale securities                             --          (1,892,399)
                                                              ------------         -----------
      Net cash provided by investing activities                  8,008,612             777,900
                                                              ------------         -----------

Cash flows from financing activities:
  Proceeds from short-term financing                             5,000,000                  --
  Issuance of common stock                                              --           1,059,920
  Purchase of treasury stock                                       (27,900)            (20,000)
  Increase in due to stockholders                                       --              (1,601)
                                                              ------------         -----------
    Net cash provided by financing activities                    4,972,100           1,038,319
                                                              ------------         -----------
    Net decrease in cash and cash equivalents                    5,185,825           1,323,756
Cash and cash equivalents at beginning of period                 1,469,663           1,980,201
                                                              ------------         -----------
Cash and cash equivalents at end of period                    $  6,655,488         $ 3,303,957
                                                              ============         ===========
Supplemental disclosure of cash flow information:
  Interest paid                                               $         --         $     9,427
                                                              ============         ===========
  Income taxes paid                                           $         --         $        --
                                                              ============         ===========
</TABLE>



          See accompanying notes to consolidated financial statements.


                                       5
<PAGE>   6



                               THE WMA CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                               SEPTEMBER 30, 1998

(1) BASIS OF PRESENTATION

          The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions for Form 10-QSB of Regulation
S-B. Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete financial
statements. In the opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation have been
included.

(2) DEFERRED TAX

          Deferred income tax liabilities and related expenses are determined in
accordance with Statement of Financial Accounting Standard No. 109 (SFAS No.
109) using an effective federal tax rate of 34%. SFAS No. 109 specifically
excludes recognition of the "small life insurance company deduction" available
under Section 806 of the Internal Revenue Code for qualifying life insurance
companies. This special deduction, for which management believes the Company
will qualify for a number of years, can reduce the effective federal income tax
rate from 34% to less than 20% depending upon the amount of taxable income.
Consequently, the effective tax rate on the Company's earnings may ultimately
prove to be less than the deferred income tax liabilities and related expenses
determined under SFAS No. 109, at September 30, 1998.

(3) ACCOUNTING PRONOUNCEMENTS

          In June 1997, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 130, "Reporting Comprehensive
Income" (Statement 130). Statement 130 establishes standards for reporting and
displaying comprehensive income and its components in a full set of
general-purpose financial statements. The Company adopted Statement 130
effective January 1, 1998. The primary component of the differences between net
income and comprehensive income for the Company is unrealized gains on
securities. Total comprehensive income for the three months ended September 30,
1998 was $1,104,412 compared to $675,352 for the three months ended September
30, 1997. Total comprehensive income for the nine months ended September 30,
1998 was $2,023,689 compared to $1,161,844 for the nine months ended September
30, 1997. In June 1997, the FASB issued Statement of Financial Accounting
Standards No. 131, "Disclosures about Segments of an Enterprise and Related
Information" (Statement 131). Statement 131 is effective for financial
statements for years ending after December 15, 1997. The Company does not have
any separate segments that are considered material.


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                                       6
<PAGE>   7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.

OVERVIEW

          The WMA Corporation ("the Company") is a holding company, owning all
of the outstanding capital stock of WMA Life Insurance Company Limited ("WMA
Life"), a Bermuda life insurance corporation. WMA Life commenced reinsurance
operations at the end of the second quarter of 1996. WMA Life is presently
engaged in providing reinsurance to certain insurance companies ("Ceding Life
Companies") with respect to variable universal life ("VUL") and variable annuity
policies sold through World Marketing Alliance, Inc., a Georgia corporation
which is a multi-product independent insurance agency. World Marketing Alliance,
Inc., and certain entities and persons with which it is associated primarily for
licensing purposes, are referred to herein as "WMA Agency", unless the context
indicates otherwise. Where sales associates of WMA Agency ("WMA Sales
Associates") are required to hold securities licenses for the sale of variable
annuity and VUL products, they become licensed as registered representatives of
WMA Securities, Inc. ("WMAS"), a registered securities broker. S. Hubert
Humphrey, Jr., the Company's President, owns substantially all of WMA Agency and
all of WMAS. Mr. Humphrey also beneficially owns approximately 36.1% of the
Company's Common Stock.

          All of the Company's reinsurance business is generated by the
marketing efforts of WMA Agency which places business with the Ceding Life
Companies. The Company does not use reinsurance intermediaries or engage in any
direct marketing activities. As a consequence, the Company is dependent upon and
benefits from WMA Agency marketing those products which the Company reinsures.
World Marketing Alliance, Inc. is an independent entity separate and apart from
the Company.

          The following tables show, by Ceding Life Company, the percentage of
WMA Agency business reinsured by the Company.


<TABLE>
<CAPTION>
                         Life Insurance Applications(1)
                         ------------------------------

Ceding Life Company                                 9/30/98      1997     1996
-------------------                                 -------      ----     ----

<S>                                                 <C>          <C>      <C>
Western Reserve Life Assurance Company                81%         85%      85%
Of Ohio ("Western Reserve")

American Skandia Life Assurance Corporation          N/A         N/A       N/A
("American Skandia")
Kemper Investors Life Insurance Company                                   
("Kemper")                                             4           2         0
                                                    ----         ---       ---
Total Subject to Reinsurance                         85%          87%       85%
Total Not Subject to Reinsurance                     15%          13%       15%
                                                    ---          ---       ---
Total Applications Submitted                        100%         100%      100%
</TABLE>


<TABLE>
<CAPTION>
                             Annuity Applications(1)
                             -----------------------

                                                  9/30/98        1997      1996
                                                  -------        ----      ----
<S>                                               <C>            <C>      <C>
Ceding Life Company
-------------------
Western Reserve                                      42%           0%        0%

American Skandia                                     16           13         0

Kemper                                              N/A          N/A       N/A
                                                    ---          ---       ---
Total Subject to Reinsurance                         58%          13%        0%
Total Not Subject to Reinsurance                     42%          87%      100%
                                                    ----         ---       ---
Total Applications Submitted                        100%         100%      100%
</TABLE>

(1) As reported to WMA Agency by life insurance companies, of applications for
    life insurance and annuity policies submitted by WMA Agency, and that WMA
    Agency monitors on a regular basis.





                                       7
<PAGE>   8



          WMA Life's revenues do not and are not expected to, bear any
relationship to the distribution of business placed by the companies with whom
WMA Agency does business as illustrated by the above tables. The reasons WMA
Life's revenues will diverge from the relationships noted above include, but are
not limited to, the nature, mix and pricing of the products reinsured; the terms
of the various reinsurance agreements; and the prescribed generally accepted
accounting for such products and reinsurance structures.

          Under a reinsurance agreement, the economic consequences of certain
insurance risks are transferred from the Ceding Life Company to the reinsurer.
Depending upon the type of reinsurance agreement, these risks may include:
mortality, persistency, expense and investment. Key considerations in evaluating
the risks include: industry experience, the Ceding Life Company's pricing and
assumptions, the type of product, the Ceding Life Company's underwriting
practices and procedures, the type of distribution system, the Ceding Life
Company's recent experience and the market for the product.

          The Ceding Life Companies retain responsibility for the payment of all
claims, surrender values, commissions and expenses involved in issuing and
maintaining the policies. In addition, the Ceding Life Companies administer the
reinsurance contracts and, on a monthly basis, provide WMA Life with information
regarding premiums, reserves, benefits, claims and settlement expenses for
policies reinsured. Financial activity between the Ceding Life Companies and WMA
Life is settled on either a monthly or quarterly basis in accordance with the
terms of the reinsurance agreements.

          At September 30, 1998, WMA Life's reinsurance in force on life
insurance policies including riders constituted 198,832 policies with an
aggregate face amount of $5.76 billion. This is an increase of 19,463 life
insurance policies and riders or 11%, and $525 million of in force face amount,
or 10% from June 30, 1998. As of September 30, 1998, WMA Life had reinsurance in
force with respect to variable annuities for 8,087 policies, with reinsured
annuity contract benefits of $111.96 million. This is an increase of 2,275
annuity policies, or 39% and $21.54 million, or 24% of annuity contract benefits
from June 30, 1998. The relative increase in the amount of annuity contract
benefits is lower than the increase in the number of annuity policies due to the
smaller average policy size of the new reinsured annuity business with Western
Reserve.

          The following table indicates the percentage of WMA Life's premiums
and reinsured policy revenues derived from the Ceding Life Companies:

<TABLE>
<CAPTION>
                            9/30/98              1997                1996
                            -------              ----                ----
<S>                         <C>                  <C>                 <C> 
Western Reserve              89.7%                95.5%               100%
American Skandia              8.5                  3.6                 --
Kemper                        1.8                  0.9                 --
                             ----                 ----                ---
Total                         100%                 100%               100%
</TABLE>

MRT REINSURANCE

          Through the third quarter of 1998, WMA Life's reinsurance indemnity
agreements included two Monthly Renewable Term ("MRT") agreements relating to
VUL policies. MRT reinsurance is a variation of Yearly Renewable Term Insurance.
The reinsurance of the VUL policies includes business previously and currently
being sold through WMA Agency and issued by Western Reserve and Kemper. Under
the MRT reinsurance agreements, WMA Life assumes a portion of the mortality risk
related to the VUL policies written by Western Reserve and Kemper. WMA Life
ceased reinsuring Financial Freedom Builder VUL policies sold after March 31,
1998 on a MRT basis and commencing April 1, 1998, began reinsuring Financial
Freedom Builder policies on a coinsurance and modified coinsurance basis. (See
discussion under "Coinsurance and Modified Coinsurance" below.) The Company will
continue to reinsure, in accordance with the terms of the MRT reinsurance
agreement with Western Reserve, all Financial Freedom Builder VUL policies
issued prior to April 1, 1998 as long as those policies remain in force.
Settlements made under these agreements are made on a monthly basis.




                                       8
<PAGE>   9

COINSURANCE AND MODIFIED COINSURANCE

          Under a coinsurance arrangement, WMA Life assumes a proportionate
share of the risks and expenses and receives a proportionate share of the
premiums and revenues associated with the underlying policies. The assumed risks
include mortality, lapses, cash surrenders and investment risk. Additionally,
under coinsurance WMA Life must establish a proportionate share of the policy
reserves. Modified coinsurance ("ModCo") is a variation of coinsurance. ModCo is
similar to coinsurance except that the reserves and the assets related to the
reserves, which would otherwise be recorded and held by the Company, are
retained by the Ceding Life Company. ModCo is used primarily for products that
develop cash values which allows the Ceding Life Company to retain the
associated assets for investment purposes. Under coinsurance and modified
coinsurance, the mortality, persistency and investment risks are reinsured on
the same plan as that of the original policy. The Ceding Life Companies and the
Company share in these risks in the same manner.

          Due to the nature of the variable products reinsured, the Company is
significantly insulated from the impact of changes in investment yields as the
policyholder retains virtually all of the investment risk. However, on an
overall basis, a decline in investment yields is expected to cause a decrease in
the Company's investment income and revenues under its coinsurance and modified
coinsurance agreements, as the reinsured policy account balances upon which some
of the Company's revenues are calculated would presumably be lower. Accordingly,
the Company's income before income taxes will be smaller. Conversely, an
increase in investment yields is expected to have the opposite effect. If
mortality experience is worse than assumed (i.e., higher claims), it is expected
to cause an increase in Benefits, claims and settlements, and a decrease in
current and future revenues that would have otherwise resulted from the VUL
policies reinsured. Conversely, if mortality experience is better than assumed
(i.e., lower claims), it is expected to cause an increase in current and future
revenues that would have otherwise resulted from the policies reinsured.

          WMA Life executed a reinsurance agreement on a ModCo basis with
American Skandia during July, 1997, providing for the reinsurance of a portion
of all Imperium variable annuity policies sold by WMA Agency commencing as of
January 1, 1997. The Imperium policies are products exclusively distributed and
sold by WMA Agency. Settlement is made under this agreement on a monthly basis.

          Effective January 1, 1998, WMA Life commenced reinsurance on a
coinsurance and modified coinsurance basis with Western Reserve a portion of all
Freedom Wealth Creator variable annuity policies sold through WMA Agency. This
agreement enables the Company to participate in revenues arising principally
from mortality and expense charges, sales charges associated with surrenders,
credited interest rate spreads, administrative charges and asset based
allowances. Settlement under this agreement is made on a quarterly basis.

          Commencing April 1, 1998, WMA Life began reinsuring on a coinsurance
and modified coinsurance basis with Western Reserve a portion of all Financial
Freedom Builder VUL policies sold through WMA Agency. This agreement has enabled
the Company to participate in revenues arising principally from mortality and
expense charges, cost of insurance charges, sales charges associated with
surrenders, credited interest rate spreads, administrative charges and asset
based allowances. Settlement under this agreement is made on a quarterly basis.

ACCOUNTING

          WMA Life recognizes premiums as earned on MRT reinsurance for the
mortality risk reinsured. Reinsured policy revenues that are reported in the
period reflect policy mortality and expense charges, policy administration
charges, asset based allowances and deferred sales charges that have been
assessed against the reinsured policy account balances under the coinsurance and
modified coinsurance agreements, as they relate to universal life-type
contracts.

          Net investment income is the gross income earned from the invested
assets less the investment management expenses and custodial fees.

         WMA Life also recognizes costs that vary with and are directly
associated with the acquisition of the reinsured policies. These costs include
actuarial, legal and accounting fees, and salaries and expenses incurred
directly by WMA Life and reinsurance commission and expense allowances paid to
the Ceding Life Companies in accordance with the reinsurance agreements. These
expenses are deferred to the extent that such costs are deemed recoverable from
future policy revenues in accordance with Generally Accepted Accounting
Principles ("GAAP") and are recorded as deferred 



                                       9
<PAGE>   10

acquisition costs on the balance sheet. Deferred acquisition costs increased
$15.78 million during the first nine months of 1998 to $20.28 million at
September 30, 1998.

          Deferred acquisition costs are amortized over the lives of the
underlying policies (with regard to the terms of the reinsurance agreement).
Under the MRT agreements, the amortization is in proportion to the ratio of
premiums collected during the then current period to total anticipated premiums.
The rate of amortization is based upon methods that include assumptions, such as
estimates of expected investment yields, mortality, persistency and expenses
applicable at the time the policies are reinsured. The assumptions include
provision for risk of adverse deviation. Original assumptions continue to be
used in subsequent accounting periods to determine changes in the deferred
acquisition costs unless a premium deficiency exists. (A premium deficiency is
recognized if the sum of expected claim costs, unamortized acquisition costs,
and maintenance costs exceeds related unearned premiums. A premium deficiency is
first recognized by charging any unamortized acquisition costs to expense to the
extent required to eliminate the deficiency. If the premium deficiency is
greater than unamortized acquisition costs, a liability shall be accrued for the
excess deficiency.) Although the Company is reinsuring on a coinsurance and
modified coinsurance basis with Western Reserve a portion of all Financial
Freedom Builder VUL policies previously reinsured on a MRT basis, policies
issued prior to April 1, 1998 will continue to be reinsured in accordance with
the MRT reinsurance agreement with Western Reserve. These changes do not result
in a premium deficiency.

          Under the coinsurance and modified coinsurance agreements, the
amortization of the deferred acquisition cost is in proportion to the ratio of
gross profits recognized during the then current period to total anticipated
gross profits. During each accounting period, assumptions used in calculating
the amortization of the Company's deferred acquisition expense reflect actual
experience for the then current accounting period. Management also reviews on a
periodic basis evolving experience with regard to the Company's assumptions
concerning future experience relating to mortality, persistency, investment
yields and expenses in determining its estimates of future gross profits. To the
extent management believes variances from expected assumptions are permanent,
rather than temporal, assumptions used with regard to future experience will be
changed. Upon adoption of any change in assumptions used with regard to future
experience, the amortization of the Company's deferred acquisition cost will be
recalculated and will be reflected during the then current accounting period.

          Life insurance claims settled and the increase in the liability for
future policy benefits, related to MRT reinsured VUL policies, are recorded as
Benefits, claims and settlement expenses on the Consolidated Financial
Statements. The liability for future policy benefits was $1.94 million at
September 30, 1998 compared to $1.29 million at December 31, 1997. The liability
at September 30, 1998 is comprised of two components: the liabilities related to
the coinsurance of variable annuity and VUL policyholder obligations and
liabilities under the Company's MRT reinsurance agreements. The liability, with
regard to the MRT reinsurance, which represents the present value of future
benefits to be paid and related expenses, less the present value of future net
premiums (that portion of the premium required to provide for all benefits and
expenses), is estimated using the same methods and assumptions used to amortize
the deferred acquisition costs under the MRT agreements. The liability for the
fixed account portions of the Western Reserve variable annuity and VUL
coinsurance agreements is equal to reinsured policy account balances. Management
believes the assumptions used regarding its liability for future policy benefits
are appropriate for its circumstances.

          Professional fees, management fees and other expenses include expenses
incurred for salaries paid, actuarial, legal, and accounting services received.
Amortization of deferred organization costs, interest expense and miscellaneous
operating expenses are also included.

RESULTS OF OPERATIONS

Nine Months Ended September 30, 1998 Compared to Nine Months Ended September 30,
1997.

         Revenues. The Company's revenues increased by $3.91 million, or 85%, to
$8.50 million for the nine months ended September 30, 1998 from $4.59 million
for the same period in 1997. The increase was primarily attributable to the
coinsurance and modified coinsurance agreements WMA Life entered into with
American Skandia during 1997 and with Western Reserve in 1998. Further, a
revenue increase of $1.73 million was attributable to the growth in premiums
associated with the Western Reserve MRT agreement.



                                       10
<PAGE>   11

         Premiums. Premiums increased by $1.73 million, or 47%, to $5.38 million
for the nine months ended September 30, 1998 from $3.65 million for the same
period in 1997. The increase was attributable primarily to the growth in
premiums associated with a MRT reinsurance agreement WMA Life entered into with
Western Reserve during the second quarter of 1996, and to a much lesser extent
to a MRT agreement executed during the fourth quarter of 1996 with Kemper. The
increase in premiums was due to an increase in the number and reinsured amount
of VUL policies sold by WMA Agency. Policies reinsured on a MRT basis increased
by 20,034, or 15%, to 158,110 at September 30, 1998 from 138,076 at September
30, 1997. For the three month period ending September 30,1998, premiums
increased by $52,000, or 3%, from $1.80 million for the three month period
ending June 30, 1998. However, policies in force on a MRT basis decreased to
158,110 at September 30, 1998 from 161,680 at June 30, 1998 due to the
discontinuation of Financial Freedom Builder VUL policies reinsured on a MRT
basis and the lapsing of in force policies. Consequently, management expects the
MRT in force business to continue to decline as policyholders terminate their
policies either as a result of surrender or premium lapse.

         Reinsured Policy Revenues. Reinsured policy revenues increased by $2.14
million, to $2.24 million for the nine months ended September 30, 1998 from
$101,000 for the same period in 1997. Reinsured policy revenues of $101,000 for
the nine months ended September 30, 1997 were related to the variable annuity
ModCo agreement WMA Life executed with American Skandia during the third quarter
of 1997. Of the $2.24 million Reinsured policy revenues at the end of the third
quarter of 1998, $850,000 was attributable to the variable annuity ModCo
agreement with American Skandia and to the variable annuity coinsurance and
modified coinsurance agreement WMA Life entered into with Western Reserve
beginning January 1, 1998 and $1.39 million was attributable to the VUL
coinsurance and modified coinsurance agreement WMA Life entered into with
Western Reserve beginning April 1, 1998. These revenues reflect policy mortality
and expense charges, policy administration charges, asset based allowances and
deferred sales charges that have been assessed against the reinsured policy
account balances under the coinsurance and modified coinsurance agreements, as
they relate to universal life-type contracts. A revenue increase of $615,000, or
84%, from $731,000 for the three months ending June 30, 1998 to $1.35 million
for the three months ending September 30,1998 was largely attributable to the
VUL coinsurance and modified coinsurance agreement with Western Reserve.

         Net Investment Income and Net Realized Gains on Investments. Net
investment income decreased by $56,000, or 7%, to $780,000 for the nine months
ended September 30, 1998 from $836,000 for the same period in 1997. Investment
income is earned from the investment in securities (fixed income and equity) and
cash equivalents. Investment expenses of $23,000 and $43,000 for 1998 and 1997,
respectively, related to investment advisor fees and custodial fees, were netted
with gross investment income excluding realized gains and losses. The decrease
in net investment income was primarily due to the reduction in total investments
resulting from the sale of fixed income securities in order to pay the Ceding
Life Companies for reinsurance expense allowances and benefits. The principal
components of these payments are attributable to the Western Reserve VUL
coinsurance and modified coinsurance agreement. The sale of the fixed income
securities resulted in an increase of $101,000 in Net realized gains on
investments to $102,000 in 1998 from $1,000 in 1997.

         Benefits, Claims and Settlement Expenses. Benefits, claims and
settlement expenses increased by $783,000, or 47%, to $2.44 million for the nine
months ended September 30, 1998 from $1.66 million for the same period in 1997.
This increase primarily resulted from an increase in volume of in force
business. The amount of business in force at September 30, 1998, was $5.76
billion as compared to $3.86 billion at September 30, 1997, which represented a
$1.90 billion, or 49% increase.

         Benefits, claims and settlement expenses decreased by $359,000, or 37%,
to $602,000 for the three month period ending September 30, 1998 from $961,000
for the three month period ending June 30, 1998. This decrease was attributable
primarily to lower than expected mortality experience. The Company's
profitability, in part, depends on the volume and amount of death claims
incurred. While death claims are reasonably predictable over a period of many
years, claims become less predictable over shorter periods and are subject to
fluctuation from quarter to quarter and year to year. Claims paid plus those
incurred in the third quarter of 1998 were approximately 40% lower than
otherwise expected based upon prior claims activity. Estimated additional net
income was $235,000 for the third quarter due to this lower than expected claims
activity. A review of October 1998 claims activity indicates there has not been
a delay in reporting of claims incurred. However, management believes this
activity is unique to third quarter results and is not indicative of future
experience.



                                       11
<PAGE>   12

         A retrocession agreement was entered into simultaneously with the
reinsurance of the Western Reserve VUL business on a coinsurance and modified
coinsurance basis. WMA Life retrocedes portions of the mortality risk in excess
of its retention limit. Standard mortality risks in excess of $100,000 per life
are retroceded to American Phoenix Life and Reinsurance Company, Swiss Re Life &
Health America, Inc., The Lincoln National Life Insurance Company, and
Transamerica Occidental Life Insurance Company. The retrocession agreement
serves to reduce the impact of fluctuations in death claims from quarter to
quarter and year to year.

         Reinsurance Premium Allowances, Net. Net reinsurance premium allowances
increased by $739,000, or 69%, to $1.81 million for the nine months ended
September 30, 1998 from $1.07 million for the same period in 1997. Gross
reinsurance premium allowances represent a portion of reinsurance premiums paid
or allowed by WMA Life to the Ceding Life Companies for each policy reinsured. A
certain portion of the gross reinsurance allowances, with regard to the
production of new business was primarily related to the Company's share of
commissions, certain development costs and other expenses from such production
of new business incurred by the Ceding Life Companies on the business reinsured.
These amounts have been deferred to the extent that such costs are deemed
recoverable from future policy revenue in accordance with GAAP. The balance of
those amounts not deferred are reflected as net reinsurance premium allowances
and are often a level percentage of individual policy revenues (e.g., renewal
reinsurance allowances). Similar to the increase in Benefits, claims and
settlement expenses, the increase in net reinsurance premium allowances was due
to an increase in the volume of business in force and placement of the reinsured
variable annuity and the VUL business reinsured on a coinsurance and modified
coinsurance basis.

         Professional Fees, Management Fees, Consulting Fees and Other Expenses.
Professional fees, management fees, consulting fees and other expenses increased
by $271,000, or 82%, to $603,000 for the nine months ended September 30, 1998
from $332,000 for the same period in 1997. Total expenses for each period
included professional fees for legal, actuarial and accounting expenses
incurred, management fees to WMA Management Services, Inc., consulting fees to
World Marketing Alliance, Inc., operating expenses and other miscellaneous
expenses. The increase in expenses was primarily associated with an increase in
the amount of reinsurance business activities and expenses relating to the
administration of the Company. During 1998, the Company has hired six employees,
thus incurring additional expenses relating to salaries and benefits.

         Amortization of Deferred Acquisition Costs, Net. Amortization of
deferred acquisition costs increased by $933,000 to $934,000 for the nine months
ended September 30, 1998 from $1,000 for the same period in 1997. The increase
in amortization of deferred acquisition costs was attributable primarily to
increased revenues associated with business reinsured and with the placement of
new business.

         The deferred acquisition cost balance is equal to the prior period
deferred acquisition cost balance, plus interest and acquisition costs
capitalized, less amortization as a function of premium revenue. Amortization of
deferred acquisition costs is equal to amortization as a function of premium
revenue, less interest capitalized. During the third quarter of 1997, interest
capitalized was nearly equal to amortization as a function of premium revenue.
As each block of reinsured policies ages under the MRT reinsurance agreements,
amortization as a function of premium revenue will continue to exceed interest
capitalized. The increase in policy acquisition costs, consisting primarily of
commission and reinsurance expense allowances, under the VUL coinsurance and
modified coinsurance agreement as compared to that under the MRT agreement is
largely attributable to the relative differences in the gross premiums paid
under each agreement, respectively. First year gross premiums paid were $4.58
million under the VUL coinsurance agreement for the three month period ending
September 30,1998 as compared to $360,000 for first year MRT reinsurance
premiums paid for the same period.

         Income Taxes. Income taxes increased by $388,000 to $926,000 for the
nine months ended September 30, 1998 from $538,000 for the same period in 1997.
The Company's effective tax rate was 34% in 1998 and 35% in 1997.

         Net Income. As a result of the foregoing, net income for the nine-month
period ended September 30, 1998, was $1.79 million compared to $994,000 for the
nine-month period ended September 30, 1997.




                                       12
<PAGE>   13


LIQUIDITY AND CAPITAL RESOURCES

          The principal sources of the Company's cash flow have been premiums
received from Ceding Life Companies, investment income, maturing investments and
proceeds from sales of invested assets, the Company's Common Stock and short
term financing. Premiums are generally received in advance of related claims
payments. In addition to the need for cash flow to meet operating expenses, the
liquidity requirements of the Company relate primarily to the payment of gross
reinsurance allowances, operating expenses, investment purchases, and
reinsurance claims.

          As a result of the coinsurance and modified coinsurance agreements
with Western Reserve, the Company requires substantially greater amounts of cash
to make payments to Western Reserve than it has been required to make under its
MRT agreement. Under the MRT reinsurance agreements, premiums vary in proportion
to expected mortality claims reinsured. The Company's cash inflows under the MRT
agreements equal premiums for the mortality risk reinsured. The Company's cash
outflows equal reinsurance expense allowances and death benefit claims. The
reinsurance expense allowances represent the Company's share of acquisition and
maintenance expenses incurred by the Ceding Life Company that are attributable
to the risks reinsured. With respect to the first policy year, the Company's net
cash outlay is approximately equal to death benefit claims because of the
expense allowance structure; thereafter, in renewal policy years, it is
anticipated no further cash outlays will occur because reinsurance expense
allowances are materially less as a function of premium.

          Under the Western Reserve VUL coinsurance and modified coinsurance
agreement, since the Company is reinsuring risks on the same plan as that of the
original policy, reinsurance premiums are materially greater than premiums paid
on the MRT reinsurance--perhaps as much as fifteen times or more. During the
first year in which a policy is reinsured on a coinsurance basis, the Company is
required to reimburse Western Reserve for its share of acquisition costs,
including first year commissions and issuance expenses. Further, under modified
coinsurance, the Company will allow Western Reserve to retain assets related to
reserves in support of reinsured policy benefits (e.g., cash values).
Accordingly, because of the type of reinsurance and the plan reinsured, the net
cash outlays could be as much as, or more than, the first year premium paid.

          In recognition of these liquidity requirements, during the first
quarter of 1998 the Company contributed additional capital to WMA Life through a
transfer of assets, and corresponding due and accrued investment income, with an
amortized cost of approximately $10.16 million. During the second and third
quarters of 1998, the Company liquidated its shorter duration fixed income
securities. Also during the third quarter of 1998, the Company contributed an
additional $5 million of cash to WMA Life from the proceeds of a loan under the
line of credit with Money Services, Inc. ("MSI"), a subsidiary of AEGON USA,
Inc. ("AEGON"). (See discussion of loan below.)

         The Company's primary source of liquidity was $6.66 million in cash and
cash equivalents at September 30, 1998, a decrease of $3.35 million from
September 30, 1997. The effective duration of the Company's fixed income
portfolio is just over five years, with over 78% of the fixed income securities
having a maturity of less than 10 years. The Company's fixed income portfolio
represents over 94% of the total invested assets, and has an average quality
rating of Aa3 by Moody's. The effective duration of the Company's fixed income
portfolio has increased during 1998 due to the selling of the shorter duration
investments in order to pay the Ceding Life Companies for the reinsurance
expense allowances, benefits and claims.

          The Company's cash requirements will also consist of: salaries and
benefits; management service fees; investment management and custodial account
fees; accounting and consulting services fees; expenses related to regulatory
issues and compliance with corporate and tax matters; and other incidental
administrative expenses. Prior to 1998, the Company incurred no expense for
salaries and benefits because it had no employees. The Company has hired six
employees during 1998. The Company incurred no capital expenditures in 1997 or
through the third quarter of 1998.

          For the period ended September 30, 1998, net cash flows used in
operating activities were $7.79 million, compared to net cash used in operating
activities of $492,000 for the period ended September 30, 1997. This increase is
due primarily to additional cash required to reimburse Western Reserve for
reinsurance allowances as a result of the



                                       13
<PAGE>   14

VUL coinsurance and modified coinsurance agreement executed during 1998 and to a
lesser extent to the variable annuity agreements with American Skandia and
Western Reserve. Through September 1997, the Company had MRT reinsurance
agreements with Western Reserve and Kemper and a ModCo agreement with American
Skandia in place. The Company has used its invested assets during 1998 to
reimburse the Ceding Life Companies for allowances associated with the American
Skandia and Western Reserve agreements. The net cash provided by investing
activities for the period ended September 30, 1998 was $8.01 million, compared
to net cash provided by investing activities of $778,000 for the period ended
September 30, 1997. The Company received cash from the issuance of common stock
in the first quarter of 1997, which allowed the Company to purchase additional
investments. The net cash provided by financing activities was $4.97 million for
the period ended September 30, 1998 compared to net cash provided by financing
activities of $1.04 million for the period ended September 30, 1997. The Company
purchased a small amount of stock from its shareholders in the first six months
of 1998 and during the third quarter of 1997. The Company received short-term
debt financing from MSI during the third quarter of 1998 as discussed below.

         On September 30, 1998, the Company entered into a $10 million line of
credit agreement with MSI pursuant to the terms of which the Company immediately
borrowed $5 million to cover its immediate cash needs. Borrowings under this
line of credit bear interest at the rate of 8% per annum. All outstanding
balances of principal and interest under this line of credit become due and
payable on January 31, 1999, unless extended by the lender. This credit line and
the borrowings thereunder became necessary to fund payment obligations to
Western Reserve required under the coinsurance agreements. The Company had
planned to finance these payments with the proceeds of a proposed $37,500,000
Subscription Offering of its common stock. On November 12, 1998, the Company,
upon the advice of its financial advisors and counsel applied to the Securities
and Exchange Commission ("SEC") to withdraw its registration statement relating
to this Subscription Offering.

         The Company intends to repay the loans outstanding under the line of
credit with proceeds of a private sale of common stock to institutional and
other accredited investors or through alternative sources of financing. If the
stock sale does not occur or sufficient proceeds are not obtained and
alternative sources of financing are not obtainable at an acceptable cost, the
Company would be unable to meet its obligations to pay reinsurance expense
allowances under the coinsurance agreements with Western Reserve and would not
be able to repay amounts that it had borrowed from MSI under the new line of
credit agreement. As a consequence, the Company would be compelled to attempt to
renegotiate amendments to the coinsurance agreements which would reduce its
future cash outlays. At the same time, Western Reserve, pursuant to the terms of
the new line of credit agreement with MSI, would, upon the Company's failure to
timely repay loans obtained under the line of credit agreement, have the right,
until such loans are paid in full, to (i) recapture business previously ceded to
the Company for reinsurance, and (ii) reduce the Company's quota share of new
business to be reinsured under the new reinsurance agreements to a level where
the Company's available cash could meet its continuing obligations under the
reinsurance agreements, which reduction could be to zero. In such a case,
Western Reserve would no longer be required to cede new policies to the Company
for reinsurance under the agreements.

          The WMA Corporation has no assets other than the stock of WMA Life and
$1.41 million of cash and invested assets. The Company will rely on income from
its invested assets and dividends from WMA Life to meet holding company cash
requirements.

          The minimum solvency margin for WMA Life as a long-term insurer under
Bermuda regulations is $250,000. As of December 31, 1997, WMA Life had total
statutory capital and surplus of $6,407,578. The amount available for
distribution of dividends is $6,157,578. Additionally, the amount available for
dividend distribution must be supplied through liquid assets. WMA Life met this
requirement as the amount of invested assets and quoted investments and cash was
greater than $6,157,578.

          Under the Company's reinsurance agreements, the Company is required to
provide security through a Letter of Credit ("LOC") for the benefit of the
Ceding Life Companies. The Company is in the process of increasing existing, and
obtaining additional, LOCs with Western Reserve as beneficiary, from $2.0
million to $7.0 million in support of anticipated reserve credits, under each of
the reinsurance agreements in place with Western Reserve, through October,



                                       14
<PAGE>   15

1999. WMA Life also has previously secured a LOC of $30,000 in favor of Kemper.
The LOCs were issued by IBJ Schroder, the Company's custodian, and
collateralized by the Company's assets held with the custodian. If determined to
be necessary, WMA Life will develop facilities for future LOCs and trust
arrangements in support of additional reinsurance agreements.

           As a result of the 1995 offering, the Company sold 2,000,000 shares
of Common Stock and 500,000 warrants for gross proceeds of $20.5 million
(excluding deferred organization costs of $517,000). The Company believes that
the sources of cash from the 1995 offering, the $5 million loan from MSI, and
the additional $5 million line of credit available from MSI will be sufficient
to meet the Company's cash needs until January 1999 with respect to the
administration of WMA Life's current MRT agreements with Western Reserve and
Kemper, its variable annuity coinsurance agreements with American Skandia and
Western Reserve, and its VUL reinsurance agreement with Western Reserve. The
Company plans to repay its outstanding debt to MSI and to provide additional
capital to meet its future cash needs with the proceeds of a private sale of
stock to institutional and other accredited investors. The Company is also
exploring additional sources of financing through debt, reinsurance arrangements
and securitization of its receivables.

YEAR 2000 COMPLIANCE

          The Company has performed an initial assessment of its internal
business systems and believes its systems, primarily its computer systems, will
process date information accurately and without interruption when required to
process dates in the year 1999 and beyond. This assessment has focused primarily
on the Company's computer systems as the Company's business centers around the
processing of financial data and is not significantly impacted by embedded
technology such as micro controllers. The Company has discussed the Year 2000
issue with the Ceding Life Companies and the steps they have taken to address
the situation. The Company believes its operations will not be affected. The
Company has not been required to expend significant resources to address the
Year 2000 issue and does not anticipate any significant expenditures.

          The Company is dependent on the data processing systems of the Ceding
Life Companies for the year 2000 and beyond. Due to this dependence, the failure
of the systems of the Ceding Life Companies to be year 2000 compliant could have
a material adverse effect upon the Company, as a result of business interruption
or loss of revenue sources. There can be no assurance that these systems will be
able to properly process information relating to the year 2000 and beyond. The
Company has also discussed the Year 2000 issue with the Ceding Life Companies,
and in particular Western Reserve, and the steps they have taken, or intend to
take, to address the situation.

          The Company is monitoring this risk through continued communications
with the Ceding Life Companies regarding the status of their year 2000
readiness. Since the Company reinsures more business with Western Reserve than
with the other Ceding Life Companies, the Company has requested and received
written advice as to the status of their year 2000 compliance program. Western
Reserve has advised the Company that their program for their internal systems to
become year 2000 compliant began in mid-1996 and, though currently not
completed, is expected to be complete by the end of 1998. Western Reserve has
also advised us that it will continue revalidation tests of its internal systems
as well as those systems which interface with their business partners through
1999. However, that there can be no guarantees that their efforts to remediate
their internal systems will be trouble free and that they will be in compliance
before the year 2000.

          Due to the nature of its internal computer systems, the Company does
not incur significant recurring technology costs and has not been, nor is it
expected to be, required to expend significant resource to address the Year 2000
issue. Since the Company will not be required to incur significant costs related
to system replacement but will be involved primarily in monitoring third party
suppliers, the estimated future costs of remediation will primarily consist of
personnel costs.

          In the event that the Ceding Life Companies are not year 2000
compliant, the Company's operations could be significantly impacted by the
Company's ability to enter into reinsurance agreements with other companies at
the same or similar terms.



                                       15
<PAGE>   16

FORWARD-LOOKING STATEMENTS

         Certain statements made in this report are "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995, and
are subject to the safe harbor provisions of that Act. These statements include,
but are not limited to, statements relating to increases in reinsurance revenues
and net income in future periods resulting from, among other things, the Company
expanding the types of reinsurance written, expanded reinsurance capacity and
investment results. Because such forward-looking statements involve risks, both
known and unknown, and uncertainties, there are important factors that could
cause actual results to differ materially from those expressed or implied by
such forward-looking statements, including but not limited to: changes in the
Company's relationship with WMA Agency, adverse reinsurance experience,
increased competition from within the insurance industry, the extent to which
the Company is able to develop new reinsurance programs and markets for its
reinsurance, changes in the control of the Company, the Company's cash
requirements, the outcome of regulatory examinations and investigations, and the
availability capital on acceptable terms and other factors discussed in this
report.

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                                       16
<PAGE>   17


                                     PART II

ITEM 1. LEGAL PROCEEDINGS

         At September 30, 1998, neither the Company nor its subsidiaries were
involved in any legal proceedings.

ITEM 2. CHANGES IN SECURITIES.

         On October 20, 1998, the Company's Board of Directors passed a
resolution to limit the number of shares exercisable under the stock options
granted, and warrants issued, in June, 1998 to a formula amount determined by
multiplying the number of shares by a fraction, the numerator of which is the
gross dollar amount of new capital actually received by the Company, or subject
to a binding commitment to purchase, on or before March 31, 1999 and the
denominator of which is $75,000,000. The Board felt this limitation would
encourage the officers of the Company to direct their attention to the Company's
capital needs. Stockholder approval of the Stock Option Plan and the Warrants,
as well as ratification of the options granted and warrants issued is being
sought, but has not yet been obtained.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

         There have been no defaults in the payment of principal or interest of
any indebtedness of the issuer.

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

No matters were submitted to the stockholders during the period covered by this
point. The Company's Annual Meeting of stockholders originally scheduled for
August 10, 1998 has been postponed. The Company plans to reschedule the Annual
Meeting, but no new meeting date has been scheduled.

ITEM 5. OTHER INFORMATION.

         On November 12, 1998, the Company submitted an application to withdraw
the Registration Statement which it filed with the SEC on June 9, 1998. The
application was made on the advice of its financial advisors and counsel that
the prevailing conditions were not conducive to a successful offering. The
registration statement was never declared effective and no securities were
offered or sold under this registration statement.

SIGNIFICANT REGULATORY ACTIVITIES WITH POTENTIAL IMPACT UPON THE COMPANY

The Company reinsures VUL and variable annuity products marketed by WMA Agency.
These products are treated as securities under federal and state securities
laws. In order to sell these products, the WMA Sales Associates must be
individually licensed by the National Association of Securities Dealers ("NASD")
and must become affiliated with a registered securities broker-dealer. WMAS is a
registered broker-dealer, which is owned by S. Hubert Humphrey, Jr. who also
owns substantially all of WMA Agency and is the principal stockholder of the
Company. All of the WMA Sales Associates who are licensed to sell VUL and
variable annuity products are registered representatives of WMAS.

         On May 21, 1998, the SEC issued a formal Order of Investigation
("Order") directed at certain alleged activities of WMAS and persons employed by
or associated with WMAS. This investigation was initiated to determine whether
any federal securities laws had been violated. The Order alleges that such
persons or others acting in concert with them have, among other things, engaged
in acts or practices involving the sale and promotion of variable life insurance
products, variable annuities and mutual funds which were fraudulent and
deceptive. The Order also alleges that WMAS failed to supervise such persons
with a view to preventing the alleged violations. WMAS has neither admitted nor
denied the allegations contained in the Order and is cooperating with the SEC in
this investigation. Subpoenas have been issued pursuant to this order for the
production of documents and the testimony of several officers of WMA Agency and
WMAS. If this investigation reveals one or more violations of the federal
securities laws, the 



                                       17
<PAGE>   18

Enforcement Division may recommend the imposition of sanctions against WMAS.
These sanctions, should they be imposed, could take various forms, including but
not limited to: the imposition of monetary penalties which can be quite
substantial depending upon the nature and severity of the violation, heightened
regulatory scrutiny by the SEC and NASD, and the temporary suspension or
permanent revocation of WMAS' registration or of the licenses of WMA Sales
Associates resulting in the broker-dealer's inability to continue operations.

          There can be no assurance that the SEC's Enforcement Division, after
completing its investigation, will not seek to impose sanctions against WMAS,
which if substantial could impair the financial and operation condition of WMAS.
If the WMA Sales Associates are no longer able to maintain their licenses with
WMAS, a disruption of the sale of new VUL and variable annuity products would
result until the WMA Sales Associates could become registered with another
broker-dealer. There can be no assurance, however, that the WMA Sales Associates
could register with another broker-dealer or that WMA Life could reinsure
products sold through another broker-dealer. Consequently, such a disruption
could cause a significant interruption in the production of new business
reinsured by the Company due to the Company's dependence upon WMA Agency and WMA
Sales Associates for the marketing of new VUL and variable annuity policies
which the Company may then reinsure.

         The Company has also been advised that the States of California and
Arizona have initiated investigations into the sales activities of WMA Agency
and WMAS, respectively. The Arizona Corporation Commission has initiated an
investigation of WMAS as a result of the sales activities of certain of its
former registered representatives. The focus of this investigation is to
determine whether WMAS adequately supervised these individuals. WMAS is
voluntarily cooperating with the Arizona Securities Commission in an effort to
reach a quick conclusion of the investigation. A proposed settlement order is
being considered which contemplates a monetary payment from WMA Securities. Any
sanction imposed by the State of Arizona would be reportable by WMAS through the
Central Registration Depository system, a computerized filing and data
processing system operated by the NASD that maintains information about NASD
members for access by state securities regulators, self-regulatory
organizations, and the SEC. The reporting of any sanction(s) imposed by the
State of Arizona could lead to investigations of WMAS in other states.

         The California Department of Insurance has initiated an investigation
into the sales activities of certain former and current WMA Sales Associates in
California. The scope of this investigation relates to product suitability and
sales practices relating to the sale of VUL policies to residents of California.
WMA is cooperating fully with the investigation in an effort to resolve this
inquiry, which is in still in the investigation stage, as quickly as possible.
If the California Department of Insurance determines that violations of its
insurance laws have occurred, it could seek to impose sanctions ranging from
monetary penalties to license suspension or revocation, or limitation on growth
of new sales agents. Because California accounts for a substantial amount of WMA
Agency's total sales production, any sanctions imposed would have an adverse
effect on WMA Agency and the production of new business to be reinsured by the
Company.

PROPOSED NEW BUSINESS RELATIONSHIP WITH AEGON AND WESTERN RESERVE

         During the past several months, representatives of WMA Agency have been
engaged in serious discussions with representatives of AEGON, the parent company
of Western Reserve, relating to several matters. The earlier reported proposed
separation of the administration services function from WMA Agency and placement
in a separate corporation to be jointly owned by WMA Agency and AEGON is no
longer being discussed. Discussions continue with respect to certain other
matters. These discussions are proceeding toward a letter of intent which would
form the basis for formal negotiations regarding a definitive agreement. There
can be no assurance that these discussions will lead to a letter of intent or a
definitive agreement, or that any such letter or agreement, if attained, will
contain all or any portion of the matters discussed above.

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                                       18
<PAGE>   19




ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.

          No reports were required to be filed on Form 8-K.

<TABLE>
<CAPTION>
EXHIBIT
NUMBER            DESCRIPTION OF EXHIBIT
------            ----------------------
<S>               <C>
3.1               Articles of Incorporation(1)

3.1.1             Amendment to Articles of Incorporation changing name of
                  Company to "The WMA Corporation" (2)

3.2               By-laws(1)

3.2.1             Amendment to By-Laws re Related Party Transactions (3)

4.1               Revised Specimen Stock Certificate (Attached)

4.2               1998 Stock Option Plan(4)

4.3               Form of Warrant(4)

4.5               Loan Agreement between WMA Agency and Offering Subscribers (5)

10.1              Revolving Line of Credit Loan Agreement between The WMA
                  Corporation and Money Services, Inc. dated September 30, 1998
                  (Attached)

10.2              Revolving Line of Credit Promissory Note issued by The WMA
                  Corporation on September 30, 1998 to Money Services, Inc. in
                  the principal sum of $10,000,000 (Attached)


10.3              Directed Reinsurance Agreement between WMA Life and WMA Agency
                  dated June 8, 1998 (Attached)

27.1              Financial Data Schedule (Attached) (for SEC use only)
</TABLE>

                            [FOOTNOTES ON NEXT PAGE]





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                          FOOTNOTES TO PRECEDING PAGE:

(1)      Filed on June 28, 1995 as part of the Registration Statement and
         incorporated herein by reference pursuant to Rule 12b-32.

(2)      Filed on May 15, 1998 as an Exhibit to Quarterly Report on Form 10-QSB
         and incorporated herein by reference pursuant to Rule 12b-32.

(3)      Filed on June 9, 1998 as an Exhibit to the Registration Statement and
         incorporated herein by reference pursuant to Rule 12b-32.

(4)      Filed on July 2, 1998 as an Exhibit to the Preliminary Proxy Statement
         and incorporated herein by reference pursuant to Rule 12b-32.

(5)      Filed on November 17, 1995 as an Exhibit to the Registration Statement
         and incorporated herein by reference pursuant to Rule 12b-32.


                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]


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                                   SIGNATURES

          In accordance with the requirements of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

(Registrant) The WMA Corporation



<TABLE>
<S>                    <C>                                      <C> 
By (Signature/Title)   /s/ Edward F. McKernan                  (SEAL) Date: November 16, 1998
                       Edward F. McKernan, Senior Vice
                       President, Chief Financial Officer,
                       Actuary, and Director
</TABLE>



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