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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

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

                                    FORM 10-K

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

                 For the fiscal year ended December 31, 2001 or

               TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
            OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

        For the transition period from _______________ to _______________

                        Commission file number: 33-64820

                               AMERICO LIFE, INC.
             (Exact Name of Registrant as Specified in its Charter)

                             Missouri No. 43-1627599
          (State of Incorporation) (I.R.S. Employer Identification No.)

                               1055 Broadway 64105
                        Kansas City, Missouri (Zip Code)
                    (Address of Principal Executive Offices)

        Registrant's telephone number including area code: (816) 391-2000

        Securities Registered Pursuant to Section 12(b) of the Act: None

        Securities Registered Pursuant to Section 12(g) of the Act: None

   Indicated 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      No

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

   Shares of common stock outstanding as of March 26, 2002: 10,000, none of
   which is held by non-affiliates.

                 Documents Incorporated by Reference: None

===============================================================================


<PAGE>






                                 TABLE OF CONTENTS

<TABLE>
  <S>                                                                                                      <C>
  Item                                                                                                      Page
                                                       PART I

   1.      Business                                                                                            2
   2.      Properties                                                                                         10
   3.      Legal Proceedings                                                                                  11
   4.      Submission of Matters to a Vote of Security Holders                                                13

                                                      PART II

   5.      Market for Registrant's Common Equity and Related Stockholder Matters                              14
   6.      Selected Consolidated Financial Data                                                               14
   7.      Management's Discussion and Analysis of Financial Condition and Results of Operations              15
   7A.     Quantitative and Qualitative Disclosure about Market Risk                                          28
   8.      Financial Statements and Supplementary Data                                                        28
   9.      Changes in and Disagreements with Accountants on Accounting and Financial Disclosure               28

                                                     PART III

   10.     Directors and Executive Officers of the Registrant                                                 29
   11.     Executive Compensation                                                                             30
   12.     Security Ownership of Certain Beneficial Owners and Management                                     31
   13.     Certain Relationships and Related Transactions                                                     31

                                                      PART IV

   14.     Exhibits, Financial Statement Schedules and Reports on Form 8-K                                    33
</TABLE>



<PAGE>


                                     PART I

ITEM 1.     BUSINESS

General

     Americo Life, Inc. ("Americo" or the "Company") is a financial services
holding company whose subsidiaries are engaged in providing life insurance and
annuity products through its life insurance and asset accumulation operating
segments. At December 31, 2001, the Company had approximately $3.6 billion of
invested assets under management and $43.2 billion of gross life insurance in
force. Americo is wholly owned by Financial Holding Corporation ("FHC"), a
privately owned corporation.

     The Company's wholly-owned insurance subsidiaries are: Americo Financial
Life and Annuity Insurance Company ("Americo Financial") (formerly The College
Life Insurance Company of America), Great Southern Life Insurance Company
("Great Southern"), United Fidelity Life Insurance Company ("United Fidelity"),
National Farmers Union Life Insurance Company ("National Farmers Union"), The
Ohio State Life Insurance Company ("Ohio State") and Financial Assurance Life
Insurance Company ("Financial Assurance").

     Prior to 1998, the majority of the Company's growth resulted from
acquisitions of life insurance companies or blocks of in-force policies. This
strategy significantly increased the Company's size and provided it with a
large, stable block of in force business. The Company's current business
strategy is to develop innovative and competitive products and increase the
number of distribution sources in its existing markets and other selected
markets. Americo Financial is the primary company through which the Company
distributes its products. The Company's current sales focus and strategy are
more fully described in the "Life Insurance and Annuity Business" section. The
Company will continue to pursue selected acquisitions that fit its overall
business strategy.

     In addition to the operations described above, the Company occasionally
makes financial investments in other businesses. Prior to December 2001, the
Company had an investment, in the form of a 50% interest, in Argus Health
Systems, Inc. ("Argus"), which is engaged in prescription drug claim processing.
The Company dividended its interest in Argus to FHC in December 2001. The
Company also owns several real estate investments.

     During 2001, the Company evaluated its operations in Austin, Texas. This
evaluation resulted in the decision to cease the operations of Pension
Consultants and Administrators, Inc. ("PCA"), a third party administrator which
provided administration for retirement and cafeteria plans to school districts
and other clients. The Company determined that providing these services was no
longer an integral part of its overall business strategy. Subsequent to this
decision, the Company announced that it would relocate the remaining operations
in Austin to the Company's Kansas City, Missouri or Dallas, Texas locations.
This relocation will be completed by May 2002.

Life Insurance and Annuity Business

     The Company's insurance business is divided into two segments: life
insurance operations and asset accumulation operations. The life insurance
operations consists of insurance and annuity business acquired by the Company or
sold directly by one of the Company's life insurance subsidiaries. The life
insurance operations generated $362.4 million of revenues, or 85% of total
Company revenues, in 2001. The Company's asset accumulation operations consist
of annuity products sold by the Company to either public school teachers and
administrators or to the senior market. The asset accumulation operations
generated $63.0 million, or 15% of total Company revenues, in 2001 and have
grown at a compound annual growth rate of 52% over the last five years. Policy
liabilities and the number of policies in force as of December 31, 2001 for the
Company's segments are summarized below.


<PAGE>
<TABLE>
                                                      Life Insurance      Asset Accumulation
                                                        Operations           Operations               Total
                                                      --------------      ------------------       ----------
                                                                       (Dollars in thousands)
<S>                                                    <C>                  <C>                  <C>
Policyholder account balances:
     Universal life                                     $   1,456,181        $      53,640        $   1,509,821
     Annuities                                                373,553              846,491            1,220,044
                                                        -------------        -------------        -------------
                                                        $   1,829,734        $     900,131        $   2,729,865
                                                        =============        =============        =============

Reserves for future policy benefits                     $     805,238        $       6,117        $     811,355
                                                        =============        =============        =============

Policies in force                                             814,812               91,488              906,300
                                                        =============        =============        =============
</TABLE>
     Information concerning reported revenues and income before provision for
income taxes for the Company's operating segments is set forth in Item 7 under
"Results of Operations-Segment Results" and in Note 12 of the Company's Notes to
Consolidated Financial Statements.

     The following table shows the Company's collected premiums during 2001,
2000 and 1999 by product category. The table below excludes from direct and
assumed premiums any premiums of blocks of insurance policies which have been
permanently reinsured.
<TABLE>
                                                                      Premiums Collected
                                                                    for periods indicated
                                      -----------------------------------------------------------------------------------
                                           Life Insurance Operations                   Asset Accumulation Operations
                                      -------------------------------------        --------------------------------------

                                       First Year     Renewal        Total       First Year     Renewal        Total
                                      ------------- ------------- ------------- ------------- ------------- -------------
                                                                  (in thousands of dollars)
<S>                                       <C>          <C>           <C>             <C>           <C>          <C>
Year ended
December 31, 2001
Traditional                                26,958        67,078        94,036            43            47            90
Interest-sensitive                         19,769       135,307       155,076         2,424        14,202        16,626
                                      -----------   -----------   -----------   -----------   -----------   -----------
   Total life                              46,727       202,385       249,112         2,467        14,249        16,716
Annuities                                  19,737         4,822        24,559       138,388        55,273       193,661
                                      -----------   -----------   -----------   -----------   -----------   -----------
   Direct and assumed premiums             66,464       207,207       273,671       140,855        69,522       210,377
                                      -----------   -----------                 -----------   -----------
   Less ceded premiums                                                (41,736)                                      (66)
                                                                  ------------                              ------------
   Total                                                              231,935                                   210,311
                                                                  ===========                               ===========
</TABLE>
<TABLE>
<S>                                       <C>          <C>           <C>           <C>            <C>          <C>
Year ended
December 31, 2000
Traditional                                20,430        76,852        97,282         1,922            27         1,949
Interest-sensitive                         17,376       137,055       154,431         2,993        14,984        17,977
                                      -----------   -----------   -----------   -----------   -----------   -----------
   Total life                              37,806       213,907       251,713         4,915        15,011        19,926
Annuities                                  26,470         3,809        30,279       172,995        44,592       217,587
                                      -----------   -----------   -----------   -----------   -----------   -----------
   Direct and assumed premiums             64,276       217,716       281,992       177,910        59,603       237,513
                                      -----------   -----------                 -----------   -----------
   Less ceded premiums                                                (36,848)                                      (53)
                                                                  -----------                               -----------
   Total                                                              245,144                                   237,460
                                                                  ===========                               ===========
</TABLE>
<TABLE>
<S>                                       <C>          <C>           <C>           <C>            <C>          <C>
Year ended
December 31, 1999
Traditional                                14,370        81,444        95,814         1,672             -         1,672
Interest-sensitive                         26,603       176,313       202,916         5,034        12,751        17,785
                                      -----------   -----------   -----------   -----------   -----------   -----------
   Total life                              40,973       257,757       298,730         6,706        12,751        19,457
Annuities                                  27,471         6,028        33,499       156,814        43,901       200,715
                                      -----------   -----------   -----------   -----------   -----------   -----------
   Direct and assumed premiums             68,444       263,785       332,229       163,520        56,652       220,172
                                      -----------   -----------                 -----------   -----------
   Less ceded premiums                                                (36,261)                                      (52)
                                                                  -----------                               -----------
   Total                                                              295,968                                   220,120
                                                                  ===========                               ===========
</TABLE>
<PAGE>


General Sales and Marketing

     The Company's strategy is to be a product-driven company which develops,
delivers and services life insurance and annuity products in selected markets.
The Company is continually seeking new markets in which to deliver its products.
The Company seeks to deliver its products in partnership with independent
marketing organizations ("IMO's"). IMO's are responsible for positioning the
Company's products with independent agents who are representatives of the IMO's.
The IMO's recruit, train, manage and provide other support functions to the
independent agents. The Company believes that by utilizing IMO's, the Company
can focus on product development and customer service, while leaving the product
delivery to the IMO's. The Company has existing relationships with IMO's in each
of the markets it has currently targeted.

     Historically, several of the Company's life insurance subsidiaries issued
their own products. In order to maximize the effectiveness of its marketing
efforts, the Company began an initiative in 2000 to conduct all of its sales and
marketing efforts through Americo Financial. The advantages of using a single
entity include (i) establishing a brand name in the marketplace to create name
recognition with policyholders and agents, (ii) eliminating duplicative costs
for items such as regulatory product filings, marketing materials and other
agent materials, and (iii) focusing the Company's financial resources and
personnel on only one of its life insurance companies. By the end of 2001,
virtually all of the Company's sales were being made by Americo Financial.

Life Insurance Operations

     The Company delivers its products through independent agents. Although the
Company does not employ these agents, each is a party to a general agency
agreement which governs the terms of the agent's relationship with the Company.
The Company manages these agents either directly or through IMO's.

     The Company offers a variety of life insurance and annuity products
primarily focused on life insurance sold to individuals. The Company offers a
portfolio of interest-sensitive whole life, universal life and term products in
the general insurance market. The Company sells preneed insurance products
focused on providing benefits for funeral expenses of the insured. The Company
also offers a range of level term and decreasing term products to the mortgage
life insurance market. The Company also offers equity-indexed annuities and
single premium and flexible premium annuities. Sales of life insurance and
annuity products in this segment totaled $66.1 million during 2001. The Company
measures sales as the sum of annualized first year life premiums and annuity
premiums.


Asset Accumulation Operations

     The Company's asset accumulation operations include life insurance and
annuity products offered to public school teachers and administrators and to the
senior market. The Company utilizes specialized IMO's with captive sales agents
to market tax-qualified life and annuity products sold under Sections 403(b),
401(a) and 457 of the Internal Revenue Code to public school teachers and
administrators. Sales from these agents totaled $107 million in 2001. The
Company also offers annuity products to individuals in the senior market through
IMO's. The senior market, generally considered to include individuals over age
55, is expected to experience double digit annual growth resulting from a number
of factors, including consumer concerns over the adequacy of Social Security and
pension plans and the aging of the consumer population. Sales in this market
totaled $45 million in 2001.

     The Company offers a variety of life and annuity products in its asset
accumulation segment. The Company's life insurance products consist of
interest-sensitive whole life and universal life products. The Company's annuity
products include equity-indexed annuities, single premium and flexible premium
deferred annuities, and single premium immediate annuities. Sales from
equity-indexed products, introduced in 1999, accounted for $105 million and $121
million of sales in this segment in 2001 and 2000, respectively. The
equity-indexed products include an interest credit component which is based on
changes in external stock market indices.



<PAGE>



Operations

     An integral part of the Company's philosophy is to improve profitability by
operating at the lowest achievable cost level consistent with providing good
service. Over the years, the Company has (i) invested in productivity enhancing
technology, (ii) centralized certain functions and (iii) outsourced data
processing.

     The Company has made significant investments in technology to lower its
operating costs. Its use of digital imaging technology has substantially
eliminated the typical paper-intensive life insurance processing procedures,
resulting in lower operating costs, improved customer service and an improved
working environment. A component of the imaging technology is a third party
system called Automated Work Distributor, which controls workflow and performs
other functions designed to increase efficiency. Because the investment in this
technology is relatively fixed, the Company has been able to leverage its
investment by increasing the number of policies administered.

     In order to manage more effectively its various insurance operations, the
Company has consolidated certain common functions into its Kansas City, Missouri
offices. These centralized functions include product development, marketing,
finance, investment management, data processing, personnel and regulatory
compliance. The Company believes that this approach allows it to more
effectively manage its business and, by eliminating duplicative functions,
reduce operating costs and improve returns on acquired business.

     During 2001, the Company formed a group of employees dedicated to the
promotion of quality initiatives. This group is responsible for developing a
culture within the organization focused on customer satisfaction and internal
productivity. The Company believes this increased focus on quality will
strengthen relationships with its policyholders and agents as well as reduce the
Company's operating costs.

     The Company's decision to relocate the remaining operations located in
Austin to either Kansas City or Dallas will reduce operating expenses. The
Company expects to benefit from this change beginning in the second half of
2002. In addition, the Company expects its decision to consolidate its sales and
marketing efforts into Americo Financial will also result in further operating
expense reductions in 2002. These reductions should result from eliminating
duplicate costs for items such as regulatory product filings, marketing
materials and other agent materials and should also improve the efficiency of
processing new policies.

     The Company has outsourced the major portion of its data processing
requirements through contracts entered into by FHC with Computer Sciences
Corporation ("CSC"). By outsourcing these functions, the Company believes it has
reduced operating costs by eliminating the fixed costs associated with a data
processing function and improved its ability to increase its policyholder base
without significant investment. In addition, the use of a vendor such as CSC
provides the Company access to current technology and access to staff with
expertise and experience that the Company might not be able to cost-effectively
employ on its own.

     Recognizing the possible productivity benefits of the Internet, the Company
is pursuing opportunities to integrate "e-business" strategies into its
insurance operations. The Company has developed a web site devoted to providing
agents access to data such as pending policy information and illustration
software updates for the Company's products. The Company has also introduced
electronic policy application forms which can be automatically processed by its
administration systems.

Investments

     A significant factor contributing to the Company's earnings is its ability
to earn investment income sufficient to provide for its insurance liabilities
and generate a profit. A portfolio composed principally of fixed-rate
investments that generate predictable yields backs the Company's insurance
liabilities. The yields on the Company's investments vary over time depending on
the current interest rate environment, the spread at which fixed-rate
investments are priced over the yield curve and other factors. FHC manages the
Company's invested assets as described under the heading "Agreements with FHC"
in Item 13 appearing elsewhere in this Form 10-K. The Company's investment
philosophy is conservative with an emphasis on balancing credit and interest
rate risk and is influenced by regulatory requirements and asset-liability
management principles.
<PAGE>

     The Company's insurance subsidiaries are governed by insurance statutes and
regulations which restrict the type of investments they are permitted to make
and the amount of funds that may be invested in any one type of investment. In
compliance with these regulations and consistent with the Company's investment
philosophy, the Company invests principally in investment grade securities (as
rated by nationally recognized rating organizations). At December 31, 2001,
96.0% of the Company's fixed-rate investments were investment grade. There were
no securities which were in default as to principal or interest.

     A goal of the Company's investment strategy is to provide liquidity for its
insurance liabilities. Through computer-based models, the Company conducts
studies of the cash flow characteristics of its liabilities using numerous
interest rate scenarios. The Company uses this information to assist in managing
the duration of its asset portfolio to correspond to the duration of its
liabilities.

     The Company's general investment philosophy is to hold fixed-rate
securities for long-term investment. Its fixed-maturity portfolio is divided
into those securities being held to maturity, those available for sale and those
held for trading purposes. The primary factor which influences the Company's
decision to characterize its investments as held to maturity is the cash flow
requirements of the Company's liabilities. Securities are categorized as
available for sale except for those securities that the Company has the intent
and ability to hold until maturity or has classified as trading. Securities
designated as available for sale include those that may be sold in response to
changes in interest rates, changes in prepayment risk, liquidity needs,
management of taxable income, changes in credit quality and similar economic
factors. The Company's trading portfolio is used to take advantage of short-term
market value changes. Any gains or losses are reported in current earnings.

     The carrying amounts of the Company's investments at December 31, 2001 were
as follows:

<TABLE>

                                                                                                        Total
                                                      Held to      Available for                      Carrying
              Investment Category                  Maturity (1)       Sale (2)       Trading (3)        Amount        Percentage
              -------------------                  ------------       --------       -----------        ------        ----------
                                                                                   (in thousands)
<S>                                              <C>              <C>              <C>             <C>                   <C>
Fixed maturities:
   U.S. Treasury and government securities        $     2,297      $    19,729      $         -     $    22,026            0.8
   Mortgage-backed securities:
     Collateralized mortgage obligations              163,303          111,852                -         275,155           10.0
     Pass-through certificates                         25,503          122,520                -         148,023            5.4
   Other asset-backed securities                       12,590          166,389                -         178,979            6.6
   Corporate bonds                                    491,196          900,550           57,760       1,449,506           52.8
                                                  -----------      -----------      -----------     -----------     ----------

       Total fixed maturities                     $   694,889      $ 1,321,040      $    57,760       2,073,689           75.6
                                                  ===========      ===========      ===========     -----------     ----------

Equity securities                                                                                        74,531            2.7
Investment in equity subsidiaries                                                                         7,518            0.3
Mortgage loans on real estate                                                                           269,910            9.8
Investment real estate                                                                                   28,196            1.0
Policy loans                                                                                            189,683            6.9
Cash and cash equivalents                                                                                59,714            2.2
Other invested assets                                                                                    41,602            1.5
                                                                                                    -----------     ----------

       Total cash and invested assets                                                               $2,744,843           100.0
                                                                                                    ==========      ==========
</TABLE>

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

(1) Carrying amount is amortized cost. The market value of held to maturity
    securities at December 31, 2001 was $712.3 million.
(2) Carrying amount is market value.  The amortized cost of available for sale
    securities at December 31, 2001 was $1,308.8 million.
(3) Carrying amount is market value.  The amortized cost of trading securities
    at December 31, 2001 was $57.7 million.
<PAGE>
     See Note 4 of the Notes to Consolidated Financial Statements, and the
discussion under the heading "Investment Portfolio" in Item 7 appearing
elsewhere in this Form 10-K for information about the composition and
performance of the Company's investment portfolio and the risks inherent in such
investments.

     In addition to the investments owned by the Company which are described
above, certain investments supporting the Company's insurance liabilities are
held by an unaffiliated reinsurer ("the Reinsurer") in escrow for the benefit of
the Company. These investments are managed by FHC. The carrying amounts, at
amortized cost, of these investments at December 31, 2001 were as follows:
<TABLE>

                                                                      Total Carrying
                                                                          Amount                   Percentage
                                                                      (in thousands)
<S>                                                                  <C>                              <C>
Fixed maturities:
     U.S. Treasury and government securities                          $     40,463                      5.1
     Mortgage-backed securities                                            201,872                     25.4
     Other asset-backed securities                                          84,249                     10.5
     Corporate bonds                                                       456,583                     57.4
                                                                      ------------                  -------

         Total fixed maturities                                            783,167                     98.4
                                                                      ------------                  -------

Cash                                                                        12,771                      1.6
                                                                      ------------                  -------

         Total cash and invested assets                               $    795,938                    100.0
                                                                      ============                  =======
</TABLE>

Non-Insurance Operations

     The Company also makes selective investments in businesses outside of the
life insurance industry. The primary investments of this nature owned at
December 31, 2001 were real estate investments. Until December 1, 2001, the
Company also had a 50% ownership interest in Argus, which is accounted for using
the equity method. At December 31, 2001, the Company's non-insurance operations
segment consisted of the real estate investments.

     Argus: The Company and an unrelated third party each owned a 50% equity
interest in Argus until December 1, 2001, when the Company dividended its 50%
interest in Argus to its parent. Argus is principally engaged in the business of
electronically processing prescription drug claims, including providing services
in connection with the point-of-sale adjudication, processing and payment of
these claims. Argus' principal customers include health maintenance
organizations, preferred provider organizations, health insurance companies and
managed health companies. For 2001, Argus generated revenues of $39.5 million
and processed over 158 million claims, approximately the same number as in 2000.

     Real Estate Investments: The Company manages eleven investment properties
with a carrying value of $26.0 million including office space and apartments
principally located in Texas and Missouri. In 2001, the Company sold several of
the properties for no gain. The Company sold properties in 2000 for a $0.4
million gain. The proceeds from these sales have been reinvested in similar
properties.

Reinsurance

     In keeping with industry practices, the Company reinsures portions of its
life insurance exposure with unaffiliated reinsurance companies under
traditional indemnity reinsurance agreements. Generally, the Company enters into
indemnity reinsurance arrangements to diversify its risk and to limit its
maximum loss on risks that exceed the Company's policy retention limits,
currently ranging from $50,000 to $350,000 per life. Additionally, the Company
has certain products on which it reinsures a significant quota share to
unaffiliated reinsurers in order to make these products more competitive with
those offered by other carriers. Indemnity reinsurance does not fully discharge
the Company's obligation to pay claims on the reinsured policies, and the
Company remains responsible to the extent the reinsurer fails to pay such
claims. At December 31, 2001, the Company had ceded to reinsurers approximately
$10.5 billion (24%) of life insurance in force, of which 98% was reinsured with
insurance companies rated "A (Excellent)" or better by A.M. Best. Approximately
$5.3 billion of the insurance in force was ceded to two reinsurers, both of
which were rated "A+" by A.M. Best. The Company evaluates the financial strength
of its reinsurers upon inception of a reinsurance treaty and on an annual basis
thereafter.


<PAGE>


     The Company has entered into several coinsurance and modified coinsurance
agreements with the Reinsurer with related insurance liabilities totaling $0.9
billion at December 31, 2001. The assets supporting these liabilities are held
in escrow by the Reinsurer for the benefit of the Company. The Reinsurer is
rated "AAA" by Standard and Poor's and "A++" by A.M. Best.

     Certain of the insurance subsidiaries of the Company have ceded blocks of
insurance under financial reinsurance treaties which have the effect of
increasing the statutory surplus of the Company. As a result of such reinsurance
transactions, the Company has increased its statutory surplus after the effect
of income taxes by $19.8 million; however, the effect of these reinsurance
treaties is not included in stockholder's equity of the Company presented in
accordance with generally accepted accounting principles ("GAAP"). Financial
reinsurance increases the ceding insurer's statutory surplus with the
expectation that such increased surplus will be returned to the reinsurer out of
future earnings, if any, and guarantees the reinsured against any future
statutory losses, if any, on the policies reinsured. The ability of an insurance
subsidiary to pay dividends to Americo may be adversely affected by the
reduction in statutory earnings caused by reductions in the outstanding levels
of financial reinsurance. The risk fees paid to the reinsurers under these
financial reinsurance treaties totaled $0.6 million and $0.4 million for the
years ended December 31, 2001 and 2000, respectively. See Note 6 of the Notes to
the Consolidated Financial Statements of the Company included in Item 8
appearing elsewhere in this Form 10-K.

Competition and Ratings

     The financial services industry in which the Company operates is highly
competitive. The Company competes with a large number of other insurers as well
as non-insurance financial services companies, such as banks, investment
advisors, mutual fund companies and other financial institutions, some of which
have greater financial resources, offer alternative products and, with respect
to other insurers, have higher ratings than the Company.

     The Gramm-Leach-Bliley Act of 1999 implemented fundamental changes in the
regulation of the financial services industry in the U.S. The Act permits
mergers that combine commercial banks, insurers and securities firms under a
single holding company. Until passage of the Gramm-Leach-Bliley Act, the Bank
Holding Company Act of 1956, as amended, had restricted banks from being
affiliated with insurers. With the passage of the Gramm-Leach-Bliley Act, among
other things, bank holding companies may acquire insurers, and insurance holding
companies may acquire banks. The ability of banks to affiliate with insurers may
materially adversely affect sales of all of the Company's product lines by
substantially increasing the number, size and financial strength of potential
competitors.

     The Company believes that the principal competitive factors in the sale of
life insurance and asset accumulation products are product features, product
flexibility, product pricing and crediting rates, commission structure, high
credit standing and perceived stability of insurer, and the level of service
provided by the Company to the policyholder and the agent. The Company believes
that its ability to compete with other insurance companies is dependent upon its
ability to develop competitive products that are profitable and to develop and
maintain relationships with IMO's and agents to market its products. The Company
also competes with other companies in acquiring life insurance companies and
blocks of insurance business. Many of the companies with which the Company
competes have a stronger capital position, lower cost of capital and better
access to the capital markets.

     A primary factor in a company's ability to compete in the sales of life
insurance and annuity products and the acquisition of life insurance companies
is the ratings it receives from various rating agencies. Americo Financial and
Great Southern, are rated "A (Excellent)" by A.M. Best and have a Claims Paying
Ability rating of "A (Good)" from Standard and Poor's Corporation ("S&P"). Ohio
State and National Farmers Union are rated "A- (Excellent)" and "B+ (Very
Good)", respectively, by A.M. Best. While ratings do not constitute
recommendations to buy or sell a company's insurance products and are subject to
change or withdrawal at any time, they are an important consideration in some
markets.



<PAGE>


Regulation

     All of the Company's life insurance company subsidiaries are domiciled in
Texas. One or more of the life insurance subsidiaries is licensed to sell
insurance in the District of Columbia and all states, except New York.

     General Regulation. The Company and its subsidiaries are subject to
comprehensive regulation in the various states in which they are authorized to
conduct business. The laws of these states establish supervisory agencies with
broad regulatory authority to, among other matters, grant and revoke licenses
for transacting business, regulate trade practices, establish reserve
requirements, regulate the form and content of policies and prescribe the type
and amount of investments permitted. These supervisory agencies periodically
examine the business and accounts of the Company's insurance subsidiaries and
require them to file detailed annual statements prepared in accordance with
statutory accounting practices.

     State governments have placed increased scrutiny upon the insurance
regulatory framework, and a number of state legislatures have considered or
enacted legislative proposals that alter, and in many cases increase, state
authority to regulate insurance companies and their holding company systems. In
addition, although the federal government generally does not directly regulate
the insurance business, federal initiatives often have an impact on the business
in a variety of ways. Current and proposed federal measures that may
significantly affect the insurance business include limitations on antitrust
immunity and minimum solvency requirements. For a discussion of the
Gramm-Leach-Bliley Act of 1999, which permitted affiliations between banks and
insurers, see "Business-Competition and Ratings". The NAIC has also taken
initiatives to reduce insurance company insolvencies and market conduct
violations. Most recently, the NAIC has adopted the Codification of Statutory
Accounting Principles for life insurers, which became effective on January 1,
2001. The implementation of these standardized accounting principles, which
increased the amount of statutory surplus reported by the Company's life
insurance subsidiaries by approximately $11.0 million, did not adversely impact
the ability of the subsidiaries to make payments on the surplus debentures or to
pay dividends to the Company. It is not possible to predict the future impact of
changing state and federal regulation on the operations of the Company and its
insurance subsidiaries.

     Under applicable state insurance laws, all of the Company's insurance
subsidiaries are required to maintain minimum levels of capital stock and
statutory surplus. The capital and surplus of each of the Company's insurance
subsidiaries exceeds the minimum requirements. In addition, each of the
Company's insurance subsidiaries is subject to the supervision of the regulators
of each state in which it is licensed. Such regulators have the discretionary
authority to limit or prohibit new issuances of business to policyholders within
their jurisdiction when, in their judgement, they determine that such subsidiary
is not maintaining adequate statutory surplus or capital. The Company does not
believe the current or anticipated levels of statutory surplus of its insurance
subsidiaries present a material risk that any such regulator would limit the
amount of new insurance business that an insurance subsidiary intends to issue.

     Holding Company Regulations. Substantially all states also regulate members
of insurance holding company systems. FHC is registered as a holding company
system pursuant to such legislation in Texas. The insurance holding company
statutes regulate certain transactions among affiliates, including the payment
of dividends by an insurance company to its parent. Generally, without the
consent of the domiciliary state's insurance commissioner, an insurance company
may not pay dividends to its parent in excess of the greater of (i) the
insurer's prior year statutory net gain from operations and (ii) 10% of its
prior year ending statutory capital and surplus. Dividends may be paid only from
statutory earned surplus as determined by the Texas Department of Insurance.
Generally, state laws require an insurance company to file a dividend
notification prior to payment of ordinary dividends.

     Based upon Americo Financial's level of sales in California, it is
considered commercially-domiciled in California. As a result, Americo Financial
is subject to the California holding company regulations, which are
substantially the same as those of Texas.

     Under Texas regulations, interest and principal on surplus debentures may
be paid only with prior approval of the Texas Department of Insurance. Surplus
debentures issued by United Fidelity contain payment schedules which have been
approved by the Texas Department of Insurance. Therefore, United Fidelity does
not require further approval from the Texas Department of Insurance for each
payment of principal and interest unless such payments differ from the approved
schedule.
<PAGE>

     Risk-Based Capital Requirements. The NAIC's risk-based capital ("RBC")
rules are used to evaluate the adequacy of statutory capital and surplus in
relation to a company's investment and insurance risks. The RBC formula is used
by the states as an early warning tool to identify under-capitalized companies
for the purpose of initiating regulatory action. Generally, action will be
triggered when the ratio of a company's total adjusted capital (defined as the
total of its statutory capital, surplus and asset valuation reserve ("AVR")) to
its Authorized Control Level RBC (the "RBC Ratio") falls below 200%. Based upon
the Company's calculations, all of its insurance subsidiaries had RBC ratios
exceeding 200% at December 31, 2001.

     There can be no assurance that insurance-related laws and regulations will
not become more restrictive in the future and thereby have a material adverse
effect on the operations of the Company or on the ability of the Company's
subsidiaries to make payments on the surplus debentures or to pay dividends and
thus on the Company's ability to service its debt.

Employees

     At February 28, 2002, Americo and its wholly-owned subsidiaries employed
approximately 550 persons.

ITEM 2.    PROPERTIES

     The principal executive offices of the Company are located at 1055
Broadway, Kansas City, Missouri 64105 and the Company's telephone number is
(816) 391-2000.

     The principal operations of the insurance subsidiaries are conducted from
Kansas City, Missouri and Dallas, and Austin, Texas. The Company's locations
include leased office space located at 1055 Broadway, Kansas City, Missouri
64105 and 333 West 11th Street, Kansas City, Missouri 64105. These properties
are leased from Broadway Square Partners, LLP, a Missouri limited liability
partnership, of which a corporation controlled by a related party is a partner
as described in the "Certain Relationships and Related Transactions" section
included elsewhere in this Form 10-K. The leases expire on August 31, 2010 and
August 31, 2013, respectively.

     The Company occupies leased office space located at 500 N. Akard, Dallas,
Texas 75221. The lease expires in June 2007.

     The Company also occupies leased office space located at 3755 Capitol of
Texas Highway South, Austin, Texas 78704. The two leases related to this office
space expire in May 2002 and May 2003, respectively.



<PAGE>


ITEM 3.  LEGAL PROCEEDINGS

     The Company has reached settlements in two large class actions. The class
actions and the settlements are described below, as are other cases in which the
Company or its subsidiaries are still defendants. The Company has fully
reflected the anticipated effects of the settlements in its December 31, 2001
consolidated financial statements.

     On December 31, 2001, Great Southern Life Insurance Company ("Great
Southern") was a defendant in the following certified class action: In re Great
Southern Life Insurance Company Sales Practices Litigation, MDL 1214, in the
United States District Court for the Northern District of Texas. The class
consists of certain present and former policyholders who purchased
interest-sensitive whole life and universal life insurance policies issued or
acquired by Great Southern between January 1, 1982 and December 31, 1999. By
orders entered on January 15, 2002, the Court approved a class-wide settlement
and dismissed with prejudice the claims of the class members. The orders
approving the settlement are now final, as no appeals were timely filed. Under
the terms of the settlement, Great Southern has agreed, among other things: (1)
to issue certificates to class members for premium discounts on future purchases
of certain life insurance policies and annuities from Great Southern and its
affiliates; (2) to pay class members at least 50% of Great Southern's future
earnings on the class members' policies for either 10 years or until a specified
amount, ranging between $21 million and $26 million, has been paid, whichever
takes longer; (3) to pay the plaintiffs' attorneys an initial payment of
$750,000, and, thereafter, periodic payments equal to 22.38% of all amounts paid
to the class members under (2) above; and (4) to pay the administrative costs of
the settlement. Both the settlement and the Court's order approving the
settlement acknowledge that Great Southern has denied, and continues to deny,
all the allegations of misconduct.

     Under the terms of the settlement, potential class members were given an
opportunity to exclude themselves from the class by sending a written exclusion
notice to the settlement administrator. Over 1,300 present and former
policyholders who sent in such exclusion notices have notified Great Southern
that they have retained an attorney to represent them. In early February 2002,
Great Southern filed actions in 12 states against substantially all of these
policyholders seeking, among other things, a declaration of nonliability.
Pursuant to Great Southern's request, the Judicial Panel on Multidistrict
Litigation issued an  order on March 27, 2002 conditionally transferring the
actions filed outside of Texas to the United States District Court for the
Northern District of Texas for consolidated pretrial proceedings. Great Southern
is unable to estimate the costs it might incur as a result of the exclusion
notices or if the outcomes of its declaratory judgment actions are adverse to
it.

     On December 31, 2001, Americo Financial, formerly named The College Life
Insurance Company of America ("College Life"), as well as certain affiliates of
the Company, were defendants in the following certified class action: Notzon, et
al. v. The College Life Insurance Company of America, et al.; No. 99-CVF-00697;
In the 111th District Court of Webb County, Texas. The class consists of certain
present and former owners of certain annuities and interest-sensitive life
insurance policies issued or acquired by Americo Financial between January 1,
1993 and October 1, 2001. By orders dated January 25, 2002, the Court approved a
class-wide settlement and dismissed with prejudice the claims of the class
members. The orders approving the settlement are now final, as no appeals were
timely filed. Under the terms of the settlement, Americo Financial has agreed,
among other things: (1) to provide three years of free accidental death benefit
coverage to most of the class members; (2) to create a claim resolution process
to resolve claims of individual class members; (3) to pay the named plaintiffs
and their attorneys a cash payment of $1,945,000; and (4) to pay the
administrative costs of the settlement. In the claim resolution process, the
relief to be provided will consist of cash awards and credits, premium vouchers,
policy modifications, accidental death benefit coverage, and interest.
Additionally, Americo Financial and certain of its codefendants have agreed to
arbitrate among themselves how the costs associated with the settlement will be
allocated. Both the settlement and the order approving the settlement
acknowledge that Americo Financial and its codefendants have denied, and
continue to deny, all allegations of wrongdoing.


<PAGE>


     On July 16, 1998, Great Southern, Fremont Life Insurance Company and
Fremont General Corporation (collectively Fremont) were named as defendants in a
purported class action lawsuit arising out of the sale of, and imposition of
surrender charges under, deferred annuity contracts (Gularte v. Fremont Life
Ins. Co., et al., Los Angeles Superior Court, Los Angeles, California). On April
2, 1999, the court entered judgment dismissing with prejudice the action against
Great Southern and all other defendants. On May 31, 2000, the California Court
of Appeals affirmed the dismissal of plaintiff's fraud and reformation claims,
but reversed the dismissal of claims alleging unconscionability, breach of
covenant of good faith and fair dealing and statutory unfair business practices.
The California Supreme Court denied defendants' petition for review, and the
case has been remanded to the trial court for further proceedings.

     Great Southern and Americo, together with one of Great Southern's general
agents, Great American Life Underwriters ("GALU"), Entrepreneur Corporation,
Mercantile Life Insurance Company, American Planning Corporation and various
individuals, including certain officers of Great Southern and Americo, were
named defendants in an action that was certified as a class action on April 28,
1998 (Thibodeau et al. v. Great American Life Underwriters, et al., District
Court, Dallas County, Texas). The class members, who were life insurance agents
for GALU, allege that they were defrauded by defendants into surrendering
renewal commissions in return for the promise of stock ownership in an unrelated
company (Entrepreneur Corporation) to be made public at some point in the
future. On July 26, 2000, the Court approved a class action settlement pursuant
to which Great Southern paid $1.1 million to settle the claims asserted by the
plaintiff class. The Texas Court of Appeals affirmed the trial court's approval
of the settlement on November 9, 2001 and denied appellant's motion for
rehearing on January 15, 2002. No petition for review by the Texas Supreme Court
was filed, and the order approving the settlement is now final. Shortly before
the settlement was approved by the trial court, a co-defendant named in the
lawsuit, Norman T. Faircloth, filed a cross-claim against several of the other
defendants, including Americo, Great Southern, Great American Life Underwriters,
Inc., Entrepreneur Corp., and certain officers of Great Southern and Americo.
The cross claim asserted claims similar to those asserted by the plaintiffs in
the underlying lawsuit and sought similar relief including actual damages,
treble and punitive damages, emotional distress damages and an accounting. On
April 13, 2001, the court granted summary judgment in favor of Great Southern
and other affiliated defendants on such cross-claim.

     On October 21, 1999, a purported class action lawsuit was filed against
Great Southern in Orange County Superior Court, California (Alexander v. Fremont
General Corporation, Fremont Life Insurance Co., and Great Southern Life
Insurance Co.). Plaintiff alleges misrepresentations and other wrongful conduct
in connection with the imposition of increased cost of insurance charges under
certain universal life policies assumed or issued by Fremont Life Insurance
Company, and which were subsequently assumed by Great Southern. The suit sought
actual and punitive damages, as well as injunctive and restitutionary relief and
an accounting. On February 20, 2002, the court approved a class-wide settlement,
which became final on March 25, 2002. The settlement terms require Great
Southern to pay $50,000 into a settlement fund.

     On August 16, 1999, a purported class action lawsuit (Pritzker v. The
College Life Insurance Company of America, and Loyalty Life Insurance Company,
U.S. District Court for the District of Massachusetts) was filed against the
Company's subsidiary, The College Life Insurance Company of America (now Americo
Financial), and former subsidiary, Loyalty Life Insurance Company. Plaintiff
alleges misrepresentations, breach of contract, and other wrongful conduct in
connection with the imposition of increased cost of insurance charges under
certain universal life policies assumed by defendants. Plaintiff also alleges
defendants paid less than the minimum guaranteed interest due under such
policies. Plaintiff also has sought leave to add a claim that defendants
misrepresented the amount of interest paid in excess of the guaranteed amounts.
The suit seeks actual and punitive damages, restitutionary and injunctive relief
and an accounting.

     On December 13, 2001, a purported class action lawsuit (Lukens, et al. v.
Ohio State Life Insurance Company) was filed against The Ohio State Life
Insurance Company (Ohio State) in California's Los Angeles County Superior
Court. The suit alleges that, on or before June 25, 1990, Ohio State breached
the terms of certain of its universal life policies by increasing its cost of
insurance rates without justification. The suit alleges that the increased rates
were improperly motivated by Ohio State's desire to increase its revenues by,
among other things, passing on to policyholders its increased tax liabilities
under 1990 federal legislation governing the tax accounting for deferred policy
acquisition costs. The suit asserts claims for breach of contract; breach of the
covenant of good faith and fair dealing; and acts of unfair competition under
California's Business and Professions Code. The suit seeks compensatory and
exemplary damages in unspecified amounts, as well as injunctive relief and
restitution.
<PAGE>
     On March 13, 2001, a purported class action lawsuit (Ernesto Cortes v. Ohio
State Life Insurance Company, 11th Judicial Circuit Court, Dade County, Florida)
was filed against Ohio State. The suit alleges that Ohio State breached its
obligations under a term life insurance policy purchased by plaintiff by failing
to observe the guaranteed features of the policy. The suit seeks damages in an
unspecified amount, prejudgment interest and attorney's fees on behalf of
plaintiff and a purported national class of others similarly situated.

     The Company and its subsidiaries named in the above pending actions deny
any allegations of wrongdoing and intend to defend the actions vigorously.
Although plaintiffs in these actions generally are seeking indeterminate
amounts, including punitive and treble damages, such amounts could be large.
Although there can be no assurances, at the present time the Company does not
anticipate that the ultimate liability arising from such pending litigation,
after consideration of amounts provided in the consolidated financial
statements, will have a material adverse effect on the financial condition of
the Company. However, in light of the indeterminate amounts sought in such
matters and the inherent unpredictability of legal proceedings, it is possible
that an adverse outcome in any one or more of these matters could have a
material adverse effect on the Company's operating results and cash flows in
particular quarterly or annual periods.


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

     None.



<PAGE>
                                     PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

     All of the outstanding shares of common stock of the Company are owned by
FHC. There is no established public trading market for the Company's common
stock.

     On December 31, 2001, the Company issued 1,350,000 shares of cumulative
Series A Preferred Stock to FHC in exchange for an equal number of shares of FHC
cumulative preferred stock in a private transaction exempt from registration
under Section 4(2) of the Securities Act. The Company authorized a total of
2,000,000 shares of Series A Preferred Stock. The Company's preferred stock and
the FHC preferred stock each have a par value of $1.00 per share and a total
stated value of $135.0 million. The Company has accounted for its investment in
the FHC preferred stock as an offset to its own preferred stock in stockholder's
equity.

ITEM 6.    SELECTED CONSOLIDATED FINANCIAL DATA

     The historical financial information for the five years ended December 31,
2001 and at December 31, 2001, 2000, 1999, 1998 and 1997 has been derived from
the audited Consolidated Financial Statements of the Company. The selected
consolidated financial data set forth below is qualified in its entirety by
reference to and should be read in conjunction with "Management's Discussion and
Analysis of Financial Condition and Results of Operations," and the Company's
Consolidated Financial Statements and the Notes thereto included elsewhere in
this Form 10-K.
<TABLE>
                                                                     Year Ended December 31,
                                              ----------------------------------------------------------------------
                                                        (Dollars in thousands, except per share amounts)

                                                  2001        2000 (3)        1999         1998 (2)      1997 (1)
                                                  ----        --------        ----         --------      --------
<S>                                          <C>           <C>           <C>            <C>           <C>
Statement of Income Data:
Premiums and policy revenues                  $   206,883   $   220,691   $   224,896    $   218,582   $   203,729
Net investment income                             211,081       225,517       227,622        226,534       219,267
Net realized investment gains (losses)             (1,095)       (6,573)        4,174          8,284         2,950
Other income                                        7,149        10,792         6,147         12,163        12,331
                                               ----------    ----------   -----------    -----------    ----------
    Total income                                  424,018       450,427       462,839        465,563       438,277
Policyholder benefits                             257,437       261,195       261,342        251,506       262,940
Commissions                                         8,715         4,348         8,928          8,439        11,230
Amortization expense                               42,909        67,998        73,643         87,189        43,694
Interest expense                                    9,612        10,057        11,704         12,057        12,089
Other operating expenses                           78,481        84,389        91,004         94,345        77,038
Restructuring expenses                              9,914             -             -              -             -
                                               ----------    ----------    ----------     ----------    ----------
Income before provision for income taxes and
 cumulative effect of a change in accounting
  principle                                        16,950        22,440        16,218         12,027        31,286
Provision for income taxes                          5,657         7,568         4,744          3,235         9,230
                                               ----------    ----------   -----------    -----------    ----------
Income before cumulative effect of a change
 in accounting principle                           11,293        14,872        11,474          8,792        22,056

Cumulative effect of a change in accounting
 principle                                            832             -             -              -             -
                                               ----------    ----------    ----------     ----------    ----------
Net income                                    $    12,125   $    14,872   $    11,474    $     8,792   $    22,056
                                              ===========   ===========   ===========    ===========   ===========
Net income applicable to common stock per
 common share                                 $  1,212.51   $  1,487.20   $  1,147.40    $    879.20   $  2,205.60
                                              ===========   ===========   ===========    ===========   ===========

Average common shares outstanding                  10,000        10,000        10,000         10,000        10,000
                                                   ======        ======        ======         ======        ======
Balance Sheet Data:
Total investments                             $ 2,685,129   $ 2,420,881   $ 2,361,019    $ 2,346,395   $ 2,125,813
Total assets                                    4,379,036     4,241,154     4,188,162      4,105,814     4,061,236
Total debt                                        101,547       102,297       111,165        132,533       132,884
Total liabilities                               4,126,728     3,986,492     3,962,848      3,848,634     3,814,374
Stockholder's equity                              252,308       254,662       225,314        257,180       246,862
</TABLE>

(1) On April 15, 1997, the Company acquired all of the outstanding common stock
    of Ohio State and Investors Guaranty.

(2) On October 1, 1998, the Company acquired the 50% of College Insurance Group,
    Inc. not previously owned by the Company.

(3) Effective January 1, 2000, the Company disposed of a block of
    payroll-deduction life insurance business.
<PAGE>


ITEM 7.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
                           RESULTS OF OPERATIONS

                              RESULTS OF OPERATIONS

     The following discussion analyzes significant items affecting the results
of operations and the financial condition of the Company. In connection with the
"safe harbor" provisions of the Private Securities Litigation Reform Act of
1995, the Company cautions readers regarding certain forward-looking statements
contained in this report and in any other statements made by, or on behalf of,
the Company, whether or not in future filings with the Securities and Exchange
Commission (the "SEC"). Forward-looking statements are statements not based on
historical information and which relate to future operations, strategies,
financial results or other developments. Statements using verbs such as "plan",
"anticipate", "believe", "expect" or words of similar import generally involve
forward-looking statements. Without limiting the foregoing, forward-looking
statements include statements which represent the Company's beliefs concerning
future levels of sales and surrenders of the Company's products, investment
spreads and yields or the earnings and profitability of the Company's
activities.

     Forward-looking statements are necessarily based on estimates and
assumptions that are inherently subject to significant business, economic and
competitive uncertainties and contingencies, many of which are beyond the
Company's control and many of which are subject to change. These uncertainties
and contingencies could cause actual results to differ materially from those
expressed in any forward-looking statements made by, or on behalf of, the
Company. Whether or not actual results differ materially from forward-looking
statements may depend on numerous foreseeable and unforeseeable developments.
Some may be national in scope, such as general economic conditions, changes in
tax law and changes in interest rates. Some may be related to the insurance
industry generally, such as pricing competition, regulatory developments and
industry consolidation. Others may relate to the Company specifically, such as
credit, volatility and other risks associated with the Company's investment
portfolio. Investors are also directed to consider other risks and uncertainties
discussed in documents filed by the Company with the SEC. The Company disclaims
any obligation to update forward-looking information. This discussion should be
read in conjunction with the accompanying consolidated financial statements and
the notes thereto.

General

     The Company's amounts of life insurance and annuities in force have
experienced changes over the last two years. These changes can be measured by
the changes in the Company's liabilities over this period. The liabilities as of
December 31 of the last three years are summarized in the following table (in
millions):
<TABLE>

                                                                2001              2000             1999
                                                                ----              ----             ----
<S>                                                           <C>              <C>               <C>
Life Insurance Operations
Policyholder account balances:
   Universal life                                              $ 1,456.2        $ 1,433.7         $ 1,445.9
   Annuities                                                       373.6            424.6             588.7
Reserves for future policy benefits                                805.2            819.9             822.9
                                                               ---------        ---------         ---------
                                                               $ 2,635.0        $ 2,678.2         $ 2,857.5
                                                               =========        =========         =========
</TABLE>
<TABLE>

                                                                2001              2000             1999
                                                                ----              ----             ----
<S>                                                           <C>              <C>               <C>
Asset Accumulation Operations
Policyholder account balances:
   Universal life                                              $    53.6        $    42.3         $    31.3
   Annuities                                                       846.5            723.1             533.7
Reserves for future policy benefits                                  6.1               -                 -
                                                               ---------        ---------         ---------
                                                               $   906.2        $   765.4         $   565.0
                                                               =========        =========         =========
</TABLE>
<PAGE>

     The following table summarizes the Company's sales in terms of collected
first year premiums over the three-year period ended December 31, 2001.
<TABLE>

                                                                2001              2000             1999
                                                                ----              ----             ----
                                                                             (in millions)

<S>                                                            <C>              <C>               <C>
Life insurance premiums                                        $    49.2        $    42.7         $    47.7
Annuity premiums                                                   158.1            199.5             184.3
                                                               ---------        ---------         ---------
                                                               $   207.3        $   242.2         $   232.0
                                                               =========        =========         =========
</TABLE>

     As shown in the above tables, the Company's growth over the last two years
has primarily occurred in the annuity balances of the asset accumulation
operations. This growth has been derived from a combination of new sales and
renewal premiums, primarily associated with the Company's equity-indexed annuity
products. The reserve balances in the Company's life insurance operations, with
the exception of the annuities, have remained fairly constant during the last
two years. The Company has been able to issue sufficient new business to offset
the surrenders and lapses in its older blocks of business.

Critical Accounting Policies and Estimates

     The Company's discussion and analysis of its financial condition and
results of operations are based on its consolidated financial statements, which
have been prepared in accordance with generally accepted accounting principles.
The preparation of these financial statements requires the Company to make
certain judgements and estimates that affect the amounts reported in the
financial statements and in the notes thereto. These judgements and estimates
are based on the best information available to the Company at the time and are
often based on historical experience of the Company. However, actual results
will often differ from these estimates. The revision of estimates can have a
significant impact on the reported results of operations for a period.

     The Company's reserves for future policy benefits of $811.4 million at
December 31, 2001 on term life insurance and whole life insurance policies are
calculated using estimates of investment yields, mortality and withdrawals.
These estimates are based upon the Company's historical experience and
historical experience of the life insurance industry. Policyholder account
balances of universal life-type and annuity products of $2,729.9 million at
December 31, 2001 represent accumulated contract values, without reduction for
potential surrender charges and deferred front-end contract charges that are
amortized over the term of the policies. Additions to the reserves for universal
life-type policies are required when their balances, in addition to anticipated
future net cash flows, including investment income, are insufficient to cover
future benefits and expenses.

     The costs of new business produced, principally commissions, certain policy
issue and underwriting expenses and certain variable agency expenses, are
deferred. The Company's deferred policy acquisition cost asset was $242.2
million at December 31, 2001. The cost of business acquired asset of $149.7
million at December 31, 2001 represents the amount of purchase price assigned to
the value of the policies at acquisition. For traditional life products, these
costs are amortized in proportion to premium revenues over the premium-paying
period of related policies using assumptions consistent with those used in
computing benefit reserves. For universal life, interest-sensitive and
investment products, these costs are amortized in relation to the present value,
using the current and projected credited interest rate, of expected gross
profits of the policies over the anticipated coverage period. Anticipated
investment returns, including realized gains and losses, from the investment of
policyholder balances are considered in determining the amortization of deferred
policy acquisition costs, the cost of business acquired and unearned policy
revenues.

     Retrospective adjustment of deferred policy acquisition costs and the cost
of business acquired are made annually upon the revision of estimates of current
or future gross profits on universal life-type and annuity products.
Recoverability of these assets is evaluated annually by comparing the current
estimate of future profits to the unamortized asset balances. The Company
recorded retrospective adjustments to these asset balances during both 2001 and
2000 as more fully discussed in the "Segment Results" and "Consolidated Year to
Year Comparisons" which follow.

     Impairment of investment securities owned by the Company results in a
realized investment loss when a market decline below cost is deemed to be other
than temporary. Management regularly reviews each investment security against
criteria that include the extent of the decline in the market value of the
security, the duration of the decline and the financial health and prospects of
the issuer of the security. The Company recorded a realized loss of $2.1 million
on an individual security in its December 31, 2001 income statement as a result
of its review process.
<PAGE>
     Other significant accounting policies do not involve the same level of
estimation and management judgement as those described above. These accounting
policies are described in Note 1 to the consolidated financial statements
included elsewhere in this Form 10-K.

Adoption of SFAS No. 133

     The Company adopted Statement of Financial Accounting Standards  ("SFAS')
No. 133, "Accounting for Derivative Instruments and Hedging Activities", as
amended by SFAS No. 138, "Accounting for Certain Derivative Instruments and
Certain Hedging  Activities  - an Amendment of FASB  Statement  No. 133",  on
January 1, 2001. In accordance with the transition  provisions of SFAS No. 133,
the Company recorded a net-of-tax cumulative-effect-type gain of $0.8 million
in earnings to record all of its derivatives on the balance sheet at fair value.

     The Company's equity-indexed annuity (EIA) products credit interest to the
policyholder's account balance based on a percentage (the "participation rate")
of the change in external indices over a two year period (the "index period").
At the end of each index period, a new index period begins using the
then-current account balance and external index value. The Company has the
discretion to change the participation rate at the beginning of each index
period, subject to contractually-guaranteed minimums. SFAS No. 133 requires that
each premium deposit be bifurcated between the embedded derivative component and
the host contract component. The embedded derivative component of the Company's
EIA products includes the options issued to the policyholder for the current
index period and for forward-starting periods. The Company records the changes
in the values of the embedded derivatives in current earnings as a component of
policyholder benefits. The host contract accretes interest to a maturity value
over a projected term. The interest accretion of the host contract is included
in interest credited on policyholder funds on the consolidated statement of
income.

     The Company manages its exposure to changes in the fair value of EIA
embedded derivatives by purchasing exchange-traded and over-the-counter indexed
call options and futures contracts on the same external index. Neither these
assets nor the related EIA embedded derivatives are eligible for hedge
accounting treatment under SFAS No. 133. The Company recognizes the change in
fair values of these assets as a component of net investment income.

     The adoption of SFAS No. 133 during 2001 has a significant impact on the
comparability of income statement components versus 2000. The impact on
individual income statement components is addressed in the discussion of the
results for the year ended December 31, 2001 below.

Segment Results

     Revenues and income before income taxes for the Company's operating
segments, as defined by Statement of Financial Accounting Standard ("SFAS") No.
131, "Financial Reporting for Segments of a Business Enterprise", are summarized
as follows (in millions):
<TABLE>

                            Life Insurance                   Asset Accumulation                    Non-Insurance
                              Operations                         Operations                          Operations
                    -------------------------------     ------------------------------     -------------------------------

                      2001       2000      1999          2001       2000      1999           2001      2000       1999
                      ----       ----      ----          ----       ----      ----           ----      ----       ----

<S>                   <C>        <C>       <C>            <C>        <C>       <C>             <C>       <C>        <C>
Revenues              $362.4     $380.3    $398.4         $63.0      $57.8     $42.6           $6.4      $4.9       $6.0
Income (loss)
  before income
   taxes                51.0       46.8      43.9          (1.4)      10.6       0.6            1.3       1.9        4.0
</TABLE>

     Life insurance operations. Income before income taxes increased $4.2
million from 2000 to 2001. The profits in both 2001 and 2000 were significantly
affected by changes in amortization expense and changes in the Company's policy
reserves. Revisions to estimates of future gross profits resulted in a decrease
in amortization expense of $21.9 million in 2001 and an increase in amortization
expense of $6.6 million in 2000. The most significant revision to estimated
gross profits in 2001 occurred as a result of changes in estimated policy
revenues and in policy benefits, including revisions made to reflect the
anticipated impact of the settlement of litigation in which the Company was the
defendant. The increase in reserves in 2001 was $13.0 million higher, primarily
associated with the same policies subject to the litigation settlements.
Excluding the changes in amortization and the increases in policy reserves
discussed above, income before income taxes decreased $11.3 million from 2000 to
2001. This decrease in profits was primarily the result of (i) a $7.0 million
increase in death benefits from 2000 to 2001 and (ii) lower profits on the
Company's preneed business in 2001 due to adverse lapse experience.
<PAGE>
     Income before income taxes increased $2.9 million from 1999 to 2000. This
increase in profits is due primarily to (i) a $10.5 million decrease in death
benefits, net of reserves for policy benefits released on traditional death
benefits, offset by (ii) a $4.6 million decrease in deferred policy acquisition
costs resulting from revisions made to the Company's estimate of future gross
profits from its interest-sensitive life and annuity products in both 2000 and
1999. In addition, amortization expense of cost of business acquired assets
increased $2.9 million on a closed block of annuity business in 2000 due to
higher levels of surrenders in 2000. This increased amortization expense was
partially offset by a $1.0 million increase in surrender charge revenue on this
same block of business.

     Asset accumulation operations. Income before income taxes decreased $12.0
million from 2000 to 2001. The profits in both 2001 and 2000 were significantly
affected by changes in amortization expense. Revisions to estimates of future
gross profits resulted in an increase in amortization expense of $3.1 million in
2001 and a decrease in amortization expense of $5.5 million in 2000. The most
significant revision to estimated gross profits in 2001 occurred as a result of
changes in estimated policy benefits, including revisions made pursuant to the
anticipated impact of the settlement of litigation in which the Company was the
defendant. Excluding the changes in amortization expense discussed above, income
before income taxes decreased $3.4 million from 2000 to 2001. This decrease in
profits was primarily the result of (i) lower surrender charge income in 2001
and (ii) an additional $1.4 million of expense accrued for commission bonus
plans in 2001.

      Income before income taxes increased $10.0 million from 1999 to 2000. The
primary reasons for the increase were (i) a $3.5 million reduction in
amortization of deferred policy acquisition costs resulting from revisions made
to the Company's estimate of future gross profits from its interest-sensitive
life and annuity products in both 2000 and 1999, (ii) a $2.7 million increase in
surrender charge revenue resulting from higher levels of surrenders in 2000, and
(iii) an increase in interest margins due to higher fund values on annuity
business in 2000.

     Non insurance operations. Income before income taxes decreased $0.6 million
from 2000 to 2001. The primary reason for the decrease was a $0.6 million
decrease in income from Argus in 2001 compared to 2000. Income before income
taxes decreased $2.1 million from 1999 to 2000. The primary reasons for the
decrease were (i) a $1.8 million decrease in income from Argus in 2000 and (ii)
a $0.5 million decrease in income from the real estate entities. The Company
dividended its interest in Argus to FHC in December 2001.

     The difference between the segment revenues and income before income taxes
shown above and the amounts reported in the Company's consolidated financial
statements appearing elsewhere in this report result from items not allocated to
specific segments. The significant reconciling items which are not allocable to
a segment are interest expense and a portion of (i) net investment income, (ii)
operating expenses, (iii) net realized investment gains and losses and (iv)
certain non-recurring transactions such as gains from the sale of subsidiaries.
The net loss from reconciling items was $3.0 million less in 2001 than in 2000.
The improvement from 2000 to 2001 resulted from (i) net realized investment
losses of $1.1 million in 2001 compared to net realized investment losses of
$6.6 million in 2000, (ii) $4.0 million of trading gains from the Company's
trading portfolio in 2001, (iii) lower litigation settlement costs in 2001 and
(iii) continued improvement in the reduction of operating expenses from 2000 to
2001. The positive factors in 2001 were partially offset by $9.9 million of
losses related to the Company's decision in 2001 to exit certain business and
relocate certain operations.

     Similar reconciling items had the effect of decreasing income before income
taxes by $3.1 million from 1999 to 2000. The primary reasons for the decrease
were (i) a $10.8 million increase in net realized investment losses not
allocated to segments, offset by (ii) a $3.9 million decrease in operating
expenses due to cost controls implemented in 2000, (iii) a $1.9 million increase
in net investment income related to a reduction in the unrecovered ceding
commission due to the Reinsurer, and (iv) a $1.6 million decrease in interest
expense due to lower average outstanding notes payable in 2000 compared to 1999.
<PAGE>
Consolidated Year to Year Comparisons

     Year Ended December 31, 2001 Compared with Year Ended December 31, 2000

     Income before income taxes and cumulative effect of a change in accounting
principle in 2001 was $17.0 million compared to $22.4 million in 2000. Excluding
the effects of net realized investment gains and losses, income before income
taxes decreased $11.0 million for this same period from $29.0 million to $18.0
million. The primary reasons for the decrease in profits in 2001 compared to
2000 were (i) a $8.4 million increase in death benefits, net of reserves
released on traditional death benefits, (ii) a $7.0 million decrease in
surrender charge income on closed blocks of universal life and annuity business,
and (iii) a $9.9 million restructuring loss in 2001 related to the Company's
decision to terminate certain operations and relocate other operations. These
decreases in profits were partially offset by (i) lower amortization expense in
2001 resulting from the revisions of estimates of the future gross profits on
certain of its universal life-type and annuity products and (ii) a decrease in
amortization expense resulting from lower surrender charge income in 2001.


     Premiums and policy revenues. Premiums and policy revenues totaled $206.9
million in 2001 compared to $220.7 million in 2000. Premiums from traditional
life insurance and preneed policies decreased $4.9 million during 2001 compared
to 2000. A $12.4 million decrease in premiums from the Company's inforce
traditional life insurance business was partially offset by a $7.5 million
increase in preneed premiums. Policy revenues from interest-sensitive life and
annuity products decreased $8.0 million from 2000 to 2001. This decrease was
primarily due to a $7.0 million reduction in surrender charge revenue in 2001 as
a result of lower surrenders in closed blocks of annuities and the asset
accumulation business.

     Net investment income. Net investment income totaled $211.1 million in 2001
compared to $225.5 million in 2000. Net investment income for the years ended
December 31, 2001 and 2000 was comprised of the following (in millions):
<TABLE>

                                                             2001                     2000
                                                             ----                     ----
<S>                                                        <C>                      <C>
Fixed maturities                                           $    148.4               $    136.6
Mortgage loans                                                   20.7                     19.4
Policy loans                                                     10.2                     11.6
Reinsurance funds held by reinsurer                              48.7                     54.7
Derivatives                                                     (19.1)                       -
Other, net of investment expenses                                 2.2                      3.2
                                                           ----------               ----------
     Net investment income                                 $    211.1               $    225.5
                                                           ==========               ==========
</TABLE>

     The reduction in net investment income in 2001 was primarily due to a $19.1
million decrease in fair value of call options and futures contracts owned by
the Company. The decrease in the fair value of these call options and futures
contracts was offset by the decline in value of the options embedded in the
Company's equity-indexed annuity liabilities. Excluding the decrease in the fair
value of derivative assets, investment income for 2001 increased $4.7 million
compared to 2000. Investment income on fixed maturity securities increased $11.8
million in 2001 based upon the increased amount of fixed maturity securities
owned by the Company in 2001 versus 2000. Investment income earned on
reinsurance funds held by reinsurer decreased $6.0 million from 2000 to 2001
because these funds decreased in 2001. The liabilities related to these
reinsurance funds experienced similar reductions in 2000.

     Net realized investment losses. Net realized investment losses totaled $1.1
million in 2001 compared to net realized investment losses of $6.6 million for
2000. During the years ended December 31, 2001 and 2000, the Company recorded
realized gains on common stock of $5.5 million and $4.3 million, respectively.
The Company also recorded realized losses on fixed maturity investments of $6.9
million and $11.4 million, respectively, during the years ended December 31,
2001 and 2000.

     Other income. Other income totaled $7.1 million for 2001 compared to $10.8
million for 2000. The primary reason for this decrease was a reduction in
servicing revenue on blocks of business which have been permanently coinsured to
other insurance companies.

     Policyholder benefits. Policyholder benefits totaled $257.4 million for
2001 compared to $261.2 million for 2000. As discussed above, included in
policyholder benefits in 2001 is a $22.2 million reduction related to the
decline in value of the issued options embedded in the Company's equity-indexed
annuity liabilities. Excluding the decrease in the value of the issued options,
policyholder benefits increased $18.4 million from 2000 to 2001. Death benefits,
net of reserves released on traditional death benefits, during 2001 were $8.6
million higher than 2000. The remaining increase in policyholder benefits from
2000 to 2001 was attributable to higher increases in reserves for future policy
benefits in 2001.
<PAGE>
     Commissions. Commission expense totaled $8.7 million for 2001 compared to
$4.3 million in 2000. The increase in commission expense in 2001 included an
additional $1.4 million of expense accrued for commission bonus plans. The
receipt of approximately $1.5 million of nonrecurring reimbursements had reduced
commission expense in 2000. These reimbursements were offset by higher ceded
premiums on the same reinsurance agreement in 2000.

     Amortization expense. Amortization expense totaled $42.9 million for 2001
compared to $68.0 million for 2000. The decrease resulted from (i) a revision of
estimated future gross profits on blocks of universal life and annuity business
and (ii) lower amortization expense in closed blocks of universal life and
annuity business.

     During 2001, the Company revised its estimates of the future gross profits
on certain of its universal life-type and annuity products. The revisions
primarily consisted of changes in estimated policy revenues and benefits paid to
policyholder account balances. Certain of these revisions resulted from the
anticipated impact of settling litigation in which the Company was the
defendant. As a result of these changes in estimates, the Company recorded
retrospective adjustments during 2001 which increased the cost of business
acquired asset by $21.4 million and which decreased the deferred policy
acquisition cost asset by $3.0 million.

     The Company's closed blocks of universal life and annuity business
experienced significantly lower levels of withdrawals during 2001 than during
2000. The decrease of $5.0 million in amortization expense related to these
blocks was partially offset by the lower surrender charge revenue during 2001,
as discussed above.

     Other operating expenses. Other operating expenses totaled $78.5 million
for 2001 compared to $84.4 million for 2000. Included in other operating
expenses for 2001 was a $3.5 million increase in the allowance for receivables
from agents which the Company has estimated to be uncollectible, $1.5 million of
litigation costs and $0.8 million related to the costs of mailing notices to
policyholders to comply with recently-issued federal privacy regulations. The
majority of the agent receivables deemed uncollectible were older balances on
which related litigation was settled during 2001. Other operating expenses for
the year ended December 31, 2000 included $3.1 million of costs associated with
the settlement of lawsuits. The remaining net reduction in other operating
expenses from 2000 to 2001 reflects the Company's continued efforts to reduce
expenses and improve the efficiency of its operations.

     Restructuring expenses. During 2001, the Company made certain changes to
its administrative and sales operations involved in the sale of insurance
products to the tax-qualified market. Among other matters, the Company decided
to relocate operations located in Austin to existing operations located
elsewhere. Additionally, the Company decided to cease operations of an entity
that previously provided administration for retirement and cafeteria plans to
school districts and other clients. Among the factors leading to these decisions
was the settlement of litigation in which the Company had been a defendant. The
relocation of the remaining Austin operations will be completed in May 2002. In
connection with these business decisions, the Company recorded a restructuring
loss of $9.9 million consisting of several components. The Company determined
that a portion of the goodwill related to these entities had become impaired.
Based upon the Company's best estimate of the future results of operations of
these entities, the goodwill asset was reduced by $4.7 million. The
restructuring loss includes $1.5 million representing the unamortized cost of
software developed for use by these entities and exit costs of $0.9 million for
expected severance payments and for lease payments on the Austin office space
beyond the date of the relocation. The remaining portion of the loss consists of
the operating expenses of the third party administrator.

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

     In May 2000, the Company entered into an agreement to permanently reinsure
a block of payroll-deduction life insurance business to an unaffiliated company
on an indemnity coinsurance basis using an effective date of January 1, 2000.
The policy liabilities remain as direct liabilities to the Company in the
accompanying consolidated financial statements. As of the effective date,
liabilities associated with these policies totaled $138.5 million. Under the
reinsurance agreement, the Company transferred cash assets totaling $100.0
million and miscellaneous assets totaling $17.1 million to the unaffiliated
reinsurer. In addition, the Company removed deferred policy acquisition costs
totaling $20.3 million from its consolidated financial statements in conjunction
with this disposition. In order to fund the cash transfer, the Company sold
fixed maturity held to maturity investments with an amortized cost of $54.6
million and realized net investment losses of $0.3 million on those sales. The
Company will continue to service these policies for a fee paid by the reinsurer
for a period of time defined in the related servicing agreement. This
transaction has no significant effect on the Company's consolidated financial
position or results of operations.


<PAGE>


     The following table summarizes the effects of this business on components
of the Company's income statement during 1999 (in millions):
<TABLE>

<S>                                                                     <C>
                  Premiums and policy revenues                          $ 15.2
                  Net investment income                                    8.2
                  Policyholder benefits                                   13.8
                  Amortization expense                                     4.2
</TABLE>


     Income before income taxes increased $6.2 million to $22.4 million in 2000.
The primary reasons for the increase were (i) lower death benefits, net of
reserves for policyholder's benefits released on traditional death benefits,
(ii) an increase in surrender charge revenue resulting from higher surrenders in
2000, (iii) a decrease in other operating expenses resulting from cost controls
implemented in 2000, (iv) an increase in net investment income related to a
reduction in the unrecovered ceding commission due the Reinsurer and (v) a
decrease in interest expense, partially offset by (vi) an increase in net
realized investment losses and (vii) a decrease in income from non-life
insurance subsidiaries.

     Premiums and policy revenues. Premiums and policy revenues totaled $220.7
million in 2000 compared to $224.9 million in 1999. Excluding the effect of the
payroll-deduction business, premiums and policy revenues increased $11.0 million
from 1999 to 2000. Premiums from traditional life insurance business increased
$10.3 million. First year premiums on life insurance sold in the preneed market
increased $14.7 million in 2000 compared to 1999. Sales in this market began in
the fourth quarter of 1999. The increase in the preneed market was offset by a
decrease in premiums from the remainder of the Company's inforce traditional
life insurance business. Policy revenues from interest-sensitive life and
annuity products increased $0.7 million from 1999 to 2000. This increase was
primarily due to (i) a $2.7 million increase in surrender charges from the
Company's asset accumulation business, (ii) a $1.0 million increase in surrender
charges related to a closed block of annuity business, offset by (iii) a $3.9
million decrease in administration charges on the Company's universal life
insurance business.

     Net investment income. Net investment income totaled $225.5 million in 2000
compared to $227.6 million in 1999. Net investment income decreased due to (i)
the transfer of the invested assets supporting the payroll-deduction business
which was reinsured effective January 1, 2000, (ii) a $7.5 million decrease in
net investment income on investments held by the Reinsurer, (iii) a $2.3 million
decrease in income from equity subsidiaries, offset by (iv) a $1.9 million
increase in net investment income related to a reduction in the unrecovered
ceding commission due to the Reinsurer, (v) a $2.6 million increase in mortgage
loan net investment income and (vi) an increase in net investment income on the
Company's remaining bond portfolio.

     The increase related to the Company's remaining bond portfolio is primarily
due to an increase in assets supporting the asset accumulation business from
sales in the Company's Americo Financial Services sales division.

     The increase in investment income related to the Company's mortgage loan
portfolio is due to an increase in the average mortgage loan balance from $218.1
million in 1999 to $246.2 million in 2000. This increase was offset by a
decrease in the average yield of the portfolio from 1999 to 2000.

     The decrease related to investments held by the Reinsurer is due primarily
to a $5.5 million decrease in net investment income on a closed block of annuity
business. The decrease in investment income and the associated $4.5 million
decrease of interest credited on policyholder fund values resulted from lower
aggregate fund values.

     Net realized investment gains (losses). Net realized investment losses
totaled $6.6 million in 2000 compared to net realized investment gains of $4.2
million in 1999. In 2000, the Company realized losses of $11.4 million on the
sale of fixed maturity investments and gains of $4.3 million on the sale of
common stocks. In 1999, the Company realized gains of $2.6 million on the sale
of common stocks and gains of $2.6 million on the sale of fixed maturity
investments.

     Included in 2000 and 1999 realized investment gains and losses were $8.3
million of losses and $0.6 million of gains, respectively, on short positions
held on common stocks and fixed maturity investments by the Company. There was a
like amount of change in market value on the related long position of the common
stocks and fixed maturity investments which is included in unrealized gains in
stockholder's equity.
<PAGE>

     Other income. Other income totaled $10.8 million in 2000 compared to $6.1
million in 1999. The increase primarily relates to a service fee received during
2000 from the reinsurer of a block of payroll-deduction life insurance business.
The Company reinsured this business effective January 1, 2000; therefore, no
such fee was received during 1999.

     Policyholder benefits. Policyholder benefits totaled $261.2 million in 2000
compared with $261.3 million in 1999. Excluding the effect of the
payroll-deduction business, policyholder benefits increased $13.7 million from
1999 to 2000. This increase resulted primarily from (i) a $12.7 million increase
in interest credited on universal life and annuity fund balances, (ii) a $4.3
million increase in other policyholder benefits and (iii) a $6.6 million
decrease in reserve reduction, offset by (iv) a $10.0 million decrease in death
benefits.

     Interest credited on fund balances increased $12.4 million due to increased
fund values related to the asset accumulation business. This increase was
partially offset by a $4.5 million decrease in interest credited on a closed
block of annuity business resulting from lower aggregate fund values. Other
policyholder benefits increased primarily due to an increase in surrender
benefits on closed blocks of traditional life business. The reserve reduction
decrease in 2000 was due to increased traditional life premiums in the preneed
market offset by increased reserves released on higher surrender benefits in
2000 on closed blocks of traditional life insurance business.

     Amortization expense. Amortization expense totaled $68.0 million in 2000
compared with $73.6 million in 1999. Excluding the effect of the
payroll-deduction business, amortization expense decreased $1.4 million from
1999 to 2000. Amortization expense related to the Company's universal life
insurance business decreased $4.8 million due primarily to decreased
administrative charges on this block of business. Offsetting this decrease was a
$2.9 million increase in amortization expense related to a closed block of
annuity business. The increase was due to higher levels of surrenders in 2000
and the related increase in surrender charge revenue on this block of business.

     Other operating expenses. Other operating expenses totaled $84.4 million in
2000 compared with $91.0 million in 1999. During 2000, the Company reviewed the
levels of general expenses in all of its operating and corporate departments.
The Company identified sources of expense savings through increased cost
controls which have reduced expenses by $3.9 million from 1999 to 2000. Other
operating expenses also decreased due to lower expenses related to the Company's
AFS marketing operations. In both 2000 and 1999, other operating expenses
included $5.0 million of costs associated with litigation.

Financial Condition and Liquidity

     Liquidity. Americo has no operations of its own and relies on its
subsidiaries for funds. Americo's cash requirements consist of debt service
requirements on notes payable, amounts due to FHC under advisory and data
processing agreements and its own operating expenses. These cash requirements
are met by dividends from United Fidelity and by payments of principal and
interest on surplus debentures that Americo holds which were issued to it by
United Fidelity. Americo also receives payments under investment advisory and
data processing agreements with its insurance subsidiaries which permit Americo
to recover a portion of the amounts paid by it under similar agreements with
FHC. On a stand-alone basis, at December 31, 2001, Americo had a total of $28.8
million of cash, marketable equity securities and fixed maturity securities
available for debt service and other corporate requirements. During 1999,
Americo repaid the $21.0 million then outstanding under a credit facility, using
available cash and $12.3 million of dividends received from its life insurance
subsidiaries. This credit facility was terminated during 1999.

     Americo has outstanding $100.0 million aggregate principal amount of senior
subordinated notes that it issued in 1993. These senior subordinated notes bear
interest at 9.25% and mature in May 2005. They became redeemable at the option
of Americo beginning in 1998. The redemption prices are at par in May 2000 and
thereafter. Several of Americo's insurance subsidiaries purchased a total of
$8.5 million of the outstanding notes during 2000.

     In connection with the acquisition of The Victory Life Insurance Company in
July 1995, Americo issued notes payable to the seller with face amounts
aggregating $17.0 million. Of the $17.0 million face amount of notes payable
issued to the seller, $5.0 million mature in 2015 and the remaining $12.0
million mature in 24 equal semi-annual installments, the first of which was due
in 1995. The notes are recorded in the Company's consolidated financial
statements at their discounted value of $10.0 million, which assumes an average
effective rate of 11.5%.



<PAGE>


     At December 31, 2001, Americo held four United Fidelity surplus debentures
with an aggregate unpaid balance of $120.0 million. The terms of the surplus
debentures have been established to provide for the payment of principal and
interest to Americo in amounts sufficient to make timely payments on Americo's
external debt obligations in accordance with their payment schedules. The
surplus debentures and their payment schedules have been approved by the Texas
Department of Insurance; therefore, no scheduled payment will require the
further approval of the Texas Department of Insurance.

     The surplus debentures contain restrictions which prevent United Fidelity
from making principal and interest payments if such payments reduce United
Fidelity's statutory capital and surplus below an amount specified in the
surplus debenture agreements. The most restrictive minimum surplus requirement
contained in the surplus debentures is $37.5 million; United Fidelity's capital
and surplus at December 31, 2001 was $100.6 million. Any future payment of
principal or interest on such surplus debentures will be limited by the ability
of the subsidiaries of United Fidelity to pay dividends to United Fidelity and
may be further limited by United Fidelity's RBC requirements. See "Business
Regulation". The Company does not believe that United Fidelity will have any
difficulty in meeting its obligations under these surplus debentures in the
foreseeable future.

     In order to meet its obligations under the surplus debentures, United
Fidelity uses funds generated by its insurance operations and dividends from its
insurance subsidiaries. The ability of the insurance subsidiaries to pay
dividends is subject to regulatory restrictions. The insurance holding company
statutes of Texas, in which the Company's insurance subsidiaries are domiciled,
regulate payment of dividends by an insurance company to its parent. Generally,
without the consent of the state's insurance commissioner, an insurance company
may not pay dividends to its parent in excess of the greater of (i) the
insurer's prior year statutory net gain from operations, and (ii) 10% of its
prior year ending statutory capital and surplus, subject in either case to
sufficient earned statutory surplus from which such dividends may be paid.
Additionally, an insurance company is required to notify the respective
insurance department prior to the payment of ordinary dividends.

     The principal sources of liquidity for the Company's insurance subsidiaries
are premium receipts, net investment income received and net proceeds from
investments that have been sold or matured or from mortgage loans that have been
repaid. Cash flows from premiums received and investment income are generally
sufficient to meet the subsidiaries' obligations, which consist of the payment
of claims and benefits on insurance policies, purchases of investments and the
payment of operating expenses. Although there is no intent to dispose of
investments at this time, the Company's investments are predominantly in readily
marketable securities.

     The Company believes that its investment portfolio will allow it to satisfy
all existing contractual obligations to policyholders. At December 31, 2001, the
Company's investment portfolio included $59.7 million of cash and short-term
investments, $74.5 million of marketable equity securities, $228.9 million of
U.S. Treasury and government securities, mortgage-backed securities and
asset-backed securities and $892.8 million of corporate bonds classified as
available for sale, the vast majority of which management believes could be
readily converted to cash.

     On December 31, 2001, the Company issued 1,350,000 shares of cumulative
Series A Preferred Stock to FHC in exchange for an equal number of shares of FHC
cumulative preferred stock. The Company authorized a total of 2,000,000 shares
of Series A Preferred Stock, which ranks senior to the Company's common stock as
to dividends and liquidation rights. The Company's preferred stock and the FHC
preferred stock each have a par value of $1.00 per share and a total stated
value of $135.0 million. Cumulative annual dividends on the Company's preferred
stock of 3.38% plus the LIBOR rate are payable quarterly, either in cash or in
additional shares of preferred stock. The Company will receive a quarterly
dividend on the FHC preferred stock of 3.11% plus the LIBOR rate per annum,
either in cash or in additional shares of FHC preferred stock. The Company is
required to redeem any outstanding shares of the Series A Preferred Stock on
December 31, 2016 for $100 per share plus any unpaid dividends.

     The Company has accounted for its investment in the FHC preferred stock as
an offset to its own preferred stock in stockholder's equity. Dividends on the
Company's preferred stock, when payable, will also be substantially offset by
the dividends payable on the FHC preferred stock.


<PAGE>


     On December 31, 2001, Americo Retirement Services, Inc. (ARS), a
wholly-owned subsidiary of Americo Life, Inc., established a grantor trust (the
Trust) for the purpose of paying certain amounts due under a litigation
settlement agreement. The Trust was funded with a contribution of the FHC
preferred stock received by Americo in exchange for Americo's own preferred
stock. In order to fund its obligations, the Trust is authorized to sell shares
of the FHC preferred stock as necessary. FHC has a right of first refusal on any
shares the Trust offers for sale. The Trust will exist until all such
obligations for which it has been made responsible have been paid or expired. At
such time, any assets remaining in the Trust will revert back to ARS. The
accounts of the Trust are included in the consolidated financial statements of
the Company. The Company's December 31, 2001 consolidated financial statements
reflect the Company's best estimate of its liability under the settlement.

     Financial condition. Stockholder's equity decreased to $252.3 million at
December 31, 2001 from $254.7 million at December 31, 2000. The decrease was the
result of a decrease in net unrealized investment gains of $4.9 million and $9.6
million of dividends to FHC, partially offset by net income of $12.1 million.
The dividends consisted of the Company's ownership interest in Argus and $2.0
million of cash. Net unrealized investment losses in 2001 were recorded due to a
decrease in the market value of the Company's available for sale fixed
maturities and equity securities. See Note 4 to the Company's Consolidated
Financial Statements included elsewhere in this Form 10-K for further discussion
of the components of the change in net unrealized investment gains.

     Statutory capital and surplus of the Company's insurance subsidiaries at
December 31, 2001 includes $19.8 million arising from financial reinsurance
agreements, which amount is not included in stockholder's equity on a GAAP
basis.

     Investment Portfolio. The Company has what it believes to be a conservative
investment philosophy. The credit quality of its portfolio is high with limited
amounts of securities below investment grade. The Company's policy is to have a
substantial portion of its investment portfolio in fixed income securities with
call protection.

     The following table sets forth the composition of the Company's fixed
maturity securities according to NAIC designations and S&P and Moody's ratings
at December 31, 2001:
<TABLE>

                                                 Equivalent                                              Total
           S&P                    Moody's           NAIC       Held to     Available                   Carrying
        Rating (1)               Rating (1)      Rating (1)  Maturity (2) for Sale (3)  Trading (4)     Amount      Percentage
       -----------             -----------      ---------   -----------   -----------   ----------     --------     ----------
<S>                          <C>                    <C>     <C>           <C>          <C>            <C>               <C>
Investment grade:
AAA                                 Aaa              1       $   253,128   $   465,776  $         -  $   718,904         34.7
AA                             Aa1,Aa2, Aa3          1            70,829       139,472            -      210,301         10.1
A                               A1, A2, A3           1           217,680       263,371       25,771      506,822         24.4
BBB                          Baa1, Baa2, Baa3        2           130,948       391,653       31,989      554,590         26.8
                                                             -----------   -----------  -----------  -----------    ---------
Subtotal                                                         672,585     1,260,272       57,760    1,990,617         96.0

Non-investment grade:
BB or below                    Ba1 or below                       22,304        60,768            -       83,072          4.0
                                                             -----------   -----------  -----------  -----------    ---------

Total fixed maturity
  investments                                                $   694,889   $ 1,321,040  $    57,760  $2,073,689         100.0
                                                             ===========   ===========  ===========  ==========     =========
</TABLE>


(1)  The ratings set forth above are based on the ratings assigned by S&P and
     Moody's Investors Service, Inc. ("Moody's"). If S&P's ratings were
     unavailable, ratings assigned by Moody's were used. If ratings assigned S&P
     and Moody's were not equivalent, securities were categorized in this table
     based upon the rating assigned by S&P. Bonds not rated by S&P or Moody's
     are classified for the purpose of the table according to the rating
     assigned to them by the NAIC as follows: NAIC class 1 is included in the
     "A" rating; class 2 in "BBB" and class 3 through 6, "BB or below".

(2)  Carrying amount is amortized cost.  The market value of held to maturity
     securities at December 31, 2001 was $712.3 million.

(3)  Carrying amount is market value.  The amortized cost of available for sale
     securities  at December 31, 2001 was $1,308.8 million.

(4)  Carrying amount is market value.  The amortized cost of trading securities
     at December 31, 2001 was $57.7 million.

<PAGE>
     The Company continually reviews its non-investment grade debt securities
(NAIC designations 3 through 6) for evidence of declines in value which are
other than temporary. The Company does not anticipate any material increase in
its investments in non-investment grade debt securities. At December 31, 2001,
the Company's investment portfolio contained no securities which were in default
as to principal or interest.

     The Company maintains a mortgage-backed securities ("MBS") portfolio, which
consists of "pass-through" obligations and collateralized mortgage obligations
("CMOs"). Approximately 90% of the MBS portfolio consists of securities or pools
of securities either guaranteed by the U.S. government (including those issued
by Government National Mortgage Association), or those issued by Federal
National Mortgage Association and Federal Home Loan Mortgage Corporation.

     The primary risk associated with the MBS portfolio is that a changing
interest rate environment might cause prepayment of the underlying mortgages at
prepayment rates different than anticipated at the time of their purchase. The
degree to which a security is at risk to either increases or reductions in yield
is influenced by (i) the difference between its carrying value and par value,
(ii) the relative sensitivity of the underlying mortgages to prepayment in a
changing interest rate environment and (iii) the repayment priority of the
securities in each securitization structure.

     The Company manages the yield and cash flow variability of its MBS
portfolio by (i) purchasing securities backed by collateral with lower
prepayment sensitivity (such as mortgages priced at a discount to par value),
(ii) avoiding the purchase of securities whose values are heavily influenced by
changes in prepayments (such as interest-only and principal-only securities) and
(iii) purchasing securities with prepayment protected structures (such as
planned amortization class CMO's). See Note 4 to the Company's Consolidated
Financial Statements included elsewhere in this Form 10-K for a summary of the
Company's investments in CMO's.

     At December 31, 2001, the Company's investment portfolio included $269.9
million of mortgage loans, which were collateralized primarily by multi-family
apartments, office buildings and retail properties located in 27 states.
Approximately 24% of the portfolio consisted of multi-family apartments, 26%
consisted of office buildings, 28% consisted of industrial properties and 22%
consisted of other types of properties. At December 31, 2001, approximately 13%
of the mortgage loan portfolio was secured by properties in Texas, 18% by
properties in Missouri, 9% by properties in Connecticut and 8% by properties in
California and Florida. No more than 8% of the remaining portfolio was secured
by properties in any one state.

     At December 31, 2001, 0.2% of the mortgage loan portfolio consisted of
loans with balloon payments that mature before January 1, 2003. At December 31,
2001, the Company had no mortgage loans delinquent by more than 90 days. There
were no loans foreclosed upon and transferred to real estate owned in the
Company's consolidated balance sheet at December 31, 2001. The favorable default
experience is principally attributable to the Company's selectivity in the
purchase of mortgages in connection with acquisitions of its life insurance
subsidiaries and in its origination of new mortgage loans. In light of the
current interest rate environment, the Company may experience prepayments on its
mortgage loan portfolio, thus reducing its yield on such portfolio. The Company
plans to continue applying its historical underwriting standards to future
investments in mortgage loans.

     Real estate investments made up 1.0% of the carrying value of the Company's
cash and invested assets at December 31, 2001.

     Litigation. The Company and its subsidiaries are named in numerous pending
actions as more fully described in "Legal Proceedings". Although plaintiffs in
these actions generally are seeking indeterminate amounts, including punitive
and treble damages, such amounts could be large. Although there can be no
assurances, at the present time the Company does not anticipate that the
ultimate liability arising from such pending litigation, after consideration of
amounts provided in the consolidated financial statements, will have a material
adverse effect on the financial condition of the Company. However, in light of
the indeterminate amounts sought in such matters and the inherent
unpredictability of legal proceedings, it is possible that an adverse outcome in
any one or more of these matters could have a material adverse effect on the
Company's operating results and cash flows in particular quarterly or annual
periods.



<PAGE>


      Because of the restrictions described above under "Financial Condition and
Liquidity-Liquidity" which are applicable to surplus debentures and the
restrictions imposed by holding company statutes, an adverse outcome in the
litigation referred to above could affect the ability of one or more of the
Company's insurance subsidiaries to pay dividends or, in the case of United
Fidelity, make payments under its surplus debentures to the Company. Further,
were a subsidiary to suffer an adverse outcome, the Company might need to
contribute capital to such subsidiary so that it could continue to maintain
applicable statutory surplus and risk-based capital requirements. See
"Business-Regulation-General Regulation and Risk-Based Capital Requirements".
Because the Company is a holding company whose own cash and cash equivalents are
limited, the Company might have to dispose of some of its assets in order to
address a significant judgment suffered by it or one of its subsidiaries. Also,
an adverse outcome could affect ratings which the Company's subsidiaries receive
from rating agencies, which could affect their ability to compete. See "Business
-Competition and Ratings".

Asset-Liability Management

     Management is aware that prevailing interest rates may shift significantly
and has strategies in place to manage either an increase or decrease in interest
rates. In a rising interest rate environment, the Company's cost of funds would
increase over time as it prices its new and existing interest-sensitive and
investment products to maintain generally competitive market rates. Management
would seek to invest new and renewal premiums in investments which are high
yielding and generally correspond to the duration of its liabilities. Management
believes that liquidity to fund withdrawals would be available through a
combination of incoming cash flow, the sale of short-term or floating-rate
instruments and maturing short-duration assets and that therefore the Company
could avoid the sale of significant amounts of longer duration fixed-rate assets
in an unfavorable bond market. In a declining rate environment, the Company's
cost of funds would decrease over time, reflecting lower interest crediting
rates on its interest-sensitive liabilities. The Company's interest-sensitive
liabilities carry minimum interest guarantees, which may cause the reduction in
the Company's cost of funds to be less than the overall decrease in market
interest rates. In addition, redemptions of callable fixed-rate investments
would likely increase in a declining rate environment, causing the Company to
reinvest funds at lower yields. In order to mitigate this risk, the Company has
reduced its investment in callable securities. Should increased liquidity be
required for withdrawals, management believes that a significant portion of its
investments could be sold without adverse consequences in light of the general
strengthening which would be expected in the bond market.

     Asset-liability management is utilized by the Company to reduce the risks
to the Company for interest rate fluctuations and disintermediation. The Company
believes that its fixed-rate liabilities should be backed by a portfolio
principally composed of fixed-rate investments that generate reasonably
predictable yields in a variety of interest rate environments. The Company does
not have a specific target rate of return. Instead, its rates of return vary
over time depending on the current interest rate environment, the slope of the
yield curve, the spread at which fixed-rate investments are priced over the
yield curve, and general economic conditions. The Company's portfolio strategy
is constructed with a view to achieving adequate risk-adjusted returns
consistent with its investment objectives of effective asset-liability
management, liquidity and safety. The Company has structured its investment
portfolio to reduce changes in the value of the assets under various rate
environments. In that regard, the percentage of the Company's fixed-rate
investment portfolio which is non-callable has increased from 44% in 1995 to 73%
in 2001. In addition, the portfolio's concentration in mortgage-backed
securities and asset-backed securities, which are subject to cash flow
variability in changing interest rate environments, has decreased from 38% in
1995 to 29% in 2001. See "Investment Portfolio" section included elsewhere in
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" for additional information related to the Company's investments.

     In order to reduce the probability of unexpected increases in policy or
contract surrenders, which would create a need for increased liquidity, the
Company has structured its interest-sensitive life insurance and annuity
products to include substantial surrender charges. At December 31, 2001,
approximately 60% and 92% of the reserves for interest-sensitive life insurance
and annuity products, respectively, were for policies with surrender charges or
otherwise not subject to discretionary withdrawal by the policyholder.
Similarly, at December 31, 2001, the aggregate cash surrender values of the
Company's interest-sensitive life insurance and annuity products were
approximately 88% and 90%, respectively, of the aggregate policyholder fund
value.



<PAGE>


     As part of its asset-liability management process, the Company conducts
detailed computer simulations that model its fixed-rate assets and liabilities
under various interest rate scenarios. With the results of these
computer-generated simulations, the Company can measure the potential gain or
loss in fair value of its interest-rate sensitive instruments and seek to
protect its economic value and achieve a predictable spread between what it
earns on its invested assets and what it pays on its liabilities. At December
31, 2001, the Company's assets had an effective duration of 5.2 and its
liabilities had an effective duration of 5.5. If interest rates were to decrease
10% from December 31, 2001 levels, the increase in the value of the Company's
liabilities would exceed the increase in the value of the Company's assets by
approximately $20 million. Because the Company actively manages its assets and
liabilities and has developed strategies to reduce its exposure to loss as
interest rate changes occur, it expects that actual losses would be less than
the estimated potential loss.

Equity-Indexed Annuities and Derivatives

     The Company's equity-indexed annuity (EIA) products credit interest to
the policyholder's account balance based on a percentage (the "participation
rate") of the change in external indices over a two year period (the "index
period"). At the end of each index period, a new index period begins using the
then-current account balance and external index value. The Company has the
discretion to change the participation rate at the beginning of each index
period, subject to contractually-guaranteed minimums. SFAS No. 133 requires that
each premium deposit be bifurcated between the embedded derivative component and
the host contract component. The embedded derivative component of the Company's
EIA products includes the options issued to the policyholder for the current
index period and for forward-starting periods. The Company records the changes
in the values of the embedded derivatives in current earnings as a component of
policyholder benefits. The host contract accretes interest to a maturity value
over a projected term. The interest accretion of the host contract is included
in interest credited on policyholder funds on the consolidated statement of
income.

     The Company manages its exposure to changes in the fair value of EIA
embedded derivatives by purchasing exchange-traded and over-the-counter indexed
call options and futures contracts on the same external indices. Neither these
assets nor the related EIA embedded derivatives are eligible for hedge
accounting treatment under SFAS No. 133. The Company recognizes the change in
fair values of these assets as a component of net investment income.

     The Company also uses computer-generated simulations to evaluate how
effectively it has managed the risk associated with these derivatives. The
Company periodically generates 500 different interest rate and equity return
scenarios to measure the present value of its equity-indexed annuity block of
business. Over 95% of these scenarios returned a positive present value using a
9% discount rate. The standard deviation of the resulting present values was
approximately $11.0 million.

Effects of Accounting Pronouncements

     In July 2001, the Financial Accounting Standards Board issued SFAS No. 141
"Business Combinations" and SFAS No. 142 "Goodwill and Other Intangible Assets."
SFAS No. 141 supersedes  previously  issued  guidance on accounting for business
combinations.  SFAS  No.  141  eliminates  the  pooling-of-interests  method  of
accounting  for  business  combinations  initiated  after  July 1, 2001 and also
changes the criteria used to recognize intangible assets apart from goodwill.

     SFAS No. 142 supersedes the current accounting guidance  for goodwill  and
intangible assets. Under SFAS No. 142, goodwill and indefinite-lived  intangible
assets  will no  longer  be  amortized  but  will be  reviewed  for  impairment.
Intangible  assets with finite lives will  continue to be  amortized  over their
useful lives. The amortization  provisions of SFAS No. 142 apply to goodwill and
intangible  assets  acquired  after June 30,  2001.  For all other  goodwill and
intangible  assets,  the amortization  provisions are effective upon adoption of
SFAS No. 142.  The  impairment  provisions  of SFAS No. 142 are  effective  upon
adoption  of the  statement.  Adoption  of SFAS No.  142 is  required  as of the
beginning of fiscal years  beginning  after  December 15, 2001. The Company does
not expect that adoption of SFAS No. 142 will have a  significant  effect on its
consolidated financial position or results of operations.


<PAGE>


     The FASB has also recently issued SFAS No. 143 "Accounting for Asset
Retirement Obligations" and SFAS No. 144 "Accounting for Impairment or Disposal
of Long-Lived Assets." SFAS No. 143 requires that obligations associated with
the retirement of a tangible long-lived asset be recorded as a liability when
those obligations are incurred. The liability is initially measured at fair
value and the cost is capitalized by increasing the carrying amount of the
related long-lived asset. SFAS No. 143 will be effective for financial
statements for fiscal years beginning after June 15, 2002. The Company does not
own long-lived assets of the type that will generally create retirement
obligations. Therefore, adoption of SFAS No. 143 will not affect the Company's
consolidated financial statements.

     SFAS No. 144 provides guidance on the accounting for the impairment or
disposal of long-lived assets. SFAS No. 144 supersedes SFAS No. 121 "Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed
Of" and amends Accounting Principles Board Opinion No. 30 ("APB No. 30")
Reporting Results of Operations - Reporting the Effects of Disposal of a Segment
of a Business." SFAS No. 144 requires that long-lived assets that are to be
disposed of by sale be measured at the lower of book value or fair value less
cost to sell. Additionally, entities are no longer required to include under
"discontinued operations" operating losses that have not yet occurred. SFAS No.
144 is effective for financial statements issued for fiscal years beginning
after December 15, 2001 and, generally, its provisions are to be applied
prospectively. The Company does not expect that adoption of SFAS No. 144 will
have a significant effect on its consolidated financial position or results of
operations.

     The American Institute of Certified Public Accountants ("AICPA") recently
issued Statement of Position No. 01-05 ("SOP 01-05") "Amendments to Specific
AICPA Pronouncements for Changes Related to the NAIC Codification." SOP 01-05
amends SOP 94-5 "Disclosures of Certain Matters in the Financial Statements of
Insurance Enterprises" in response to the completion of the codification of
statutory accounting principles. SOP 01-05 requires the disclosure of prescribed
or permitted statutory accounting practice and the related effect on statutory
surplus of using an accounting practice that differs from either state
prescribed statutory accounting practices or NAIC codified statutory accounting
principles. These disclosures are required beginning with financial statements
issued for fiscal years ending after December 15, 2001. The Company has adopted
the disclosure requirements of SOP 01-05 in its December 31, 2001 consolidated
financial statements.

     The AICPA also recently issued Statement of Position No. 01-06 ("SOP
01-06") "Accounting by Certain Entities (Including Entities with Trade
Receivables) That Lend to or Finance the Activities of Others." The guidance in
SOP 01-06 relating to financing and lending activities is explicitly applicable
to insurance companies. SOP 01-06 reconciles and conforms the accounting and
financial reporting guidance presently contained in other accounting guidance.
SOP 01-06 is effective for financial statements issued for fiscal years
beginning after December 15, 2001. The Company's accounting practices for its
lending activities are already consistent with the guidance contained in SOP
01-06. Therefore, adoption of SOP 01-06 will not have a significant effect on
the Company's financial statements.

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

     The quantitative and qualitative disclosures about market risk are
contained in the "Asset-Liability Management" and "Derivatives" sections of
Management's Discussion and Analysis of Financial Condition and Results of
Operations included elsewhere in this Form 10-K.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     The Company's audited consolidated financial statements for the three years
ended December 31, 2001 and the related report of independent accountants
thereon are set forth at pages F-2 to F-29 hereof and are incorporated herein by
reference. Reference is made to the Index to Financial Statements on page F-1
herein.

ITEM 9.    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
           FINANCIAL DISCLOSURE

     None.


<PAGE>


                                    PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     The Company's Directors and Executive Officers are as follows:

           Name          Age                                      Position

Michael A. Merriman      44     Chairman of the Board and Director

Gary L. Muller           55     President, Chief Executive Officer and Director

Timothy S. Sotos         53     Director

Gary E. Jenkins          44     Executive Vice President and Treasurer

Mark K. Fallon           47     Senior Vice President of Investments and Chief
                                Financial Officer

     Americo's current Board of Directors consists of three directors. The
executive officers of Americo are elected by the Board of Directors from time to
time as it deems necessary or advisable, and are subject to removal by the
Board.

     All executive decisions, including decisions concerning executive officer
compensation, are made by the Board of Directors. No member of the Board
receives any compensation, other than reimbursement for travel expenses, for
services as such.

Certain Information About Officers

     Michael A. Merriman was elected Chairman of the Board, effective November
1, 1995, of Americo, FHC and several of its subsidiaries, including all of
Americo's insurance subsidiaries. Previously, Mr. Merriman served as a director
and officer of all these same entities.

     Gary L. Muller is President and Chief  Executive  Officer and a director
of Americo.  Mr. Muller is also a director and officer of FHC and of several of
its subsidiaries, including all of Americo's insurance subsidiaries.

     Timothy S. Sotos was elected as a director of Americo on November 1, 1995.
He also serves as a director of all of the insurance subsidiaries. He is the
Chairman of the Board and Executive Vice President of Clinical Reference
Laboratory, which is 80% owned by the Merriman family. He is the brother-in-law
of Michael A. Merriman.

     Gary E. Jenkins became Executive Vice President of Americo on September 20,
2000 and of all of its insurance subsidiaries effective October 2, 2000. He has
served as Treasurer of Americo and the insurance subsidiaries since November
1995. He served as the Chief Financial Officer of Americo until February 14,
2001, having been elected to that position in July 1994. From July 1994 to
September 20, 2000, he served as Senior Vice President of Americo and from July
1994 to October 2, 2000 he served as Senior Vice President of the insurance
subsidiaries.

     Mark K. Fallon became Senior Vice President and Chief Financial Officer
effective February 14, 2001. He continues to serve as Senior Vice President and
Assistant Secretary - Investments of Americo and all of the insurance
subsidiaries. Previously, he served as Vice President of Americo and all of the
insurance subsidiaries since 1993.



<PAGE>


ITEM 11.  EXECUTIVE COMPENSATION

     The following table sets forth all compensation paid to (i) the Chief
Executive Officer of the Company and (ii) the other four most highly compensated
Executive Officers of the Company for the three years ended December 31, 2001.
 <TABLE>
                                          Summary Compensation Table

                      Name and
                Principal Occupation                                  Annual Compensation           All Other
                --------------------                     Year        Salary          Bonus      Compensation (1)
                                                         ----        ------          -----      ---------------
<S>                                                      <C>       <C>             <C>            <C>
Gary L. Muller                                           2001      $  462,000      $  250,000     $    5,561
President, Chief Executive Officer and                   2000         462,000         275,000          6,610
  Director                                               1999         462,000         350,000          4,990

Michael A. Merriman                                      2001         363,000               -          5,561
Chairman of the Board                                    2000         363,000               -          6,680
                                                         1999         363,000               -          4,990

Gary E. Jenkins (2)                                      2001         300,000         200,000         56,222
Executive Vice President                                 2000         200,000         150,000          6,451
                                                         1999         200,000         175,000          4,992

James L. Anderson                                        2001         250,000         125,000          6,215
Senior Vice President                                    2000         250,000         125,000          6,268
                                                         1999         250,000         125,000          5,148

Mark K. Fallon (3)                                       2001         225,000         125,000          6,221
Senior Vice President of Investments and                 2000               -               -              -
  Chief Financial Officer                                1999               -               -              -
</TABLE>



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

(1)  Includes amounts contributed by the Company for the benefit of the person
     identified under the Company's Saving Plan (as hereinafter defined) and
     Supplemental Accidental Death and Dismemberment coverage.

(2)  Amount includes $50,000 of compensation for a retroactive salary adjustment
     back to 2000.

(3)  Mark Fallon received compensation from Financial Holding Corporation in
     2000 and 1999.


     Supplemental Accidental Death and Dismemberment coverage in the amount of
$500,000 is provided for all senior officers of Americo and its subsidiaries
that hold the following named positions: Vice President, Senior Vice President,
Executive Vice President, President, Chief Executive Officer and Chairman of the
Board. Currently, this policy covers approximately 30 employees of Americo and
its subsidiaries.

     Executive officers hold no outstanding options to purchase the Company's
stock.




<PAGE>


ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The Company has 10,000 shares of Common Stock and 1,350,000 shares of
Series A Preferred Stock outstanding at March 26, 2002 all of which were
beneficially owned by FHC, whose principal executive offices are located at 300
West 11th Street, Kansas City, Missouri 64105 and whose phone number is (816)
391-2000. The Company's common stock is the only capital stock with voting
powers.

     The following table sets forth certain information with respect to
beneficial ownership by Directors and Executive Officers of Americo, named in
Item 11 "Summary Compensation Table" above, of FHC's Common Stock.
<TABLE>


                                                                              Amount and Nature
                                                                               of Beneficial        Actual Percent
    Title of Class                  Names of Beneficial Owners                   Ownership             of Class
    --------------                  --------------------------              -------------------    ---------------


<S>                                                                              <C>     <C>           <C>
Common Stock            Michael A. Merriman                                      112,000 (1)           30.6%
                        Gary L. Muller                                            43,500 (2)           11.9%
                        Timothy S. Sotos                                          49,800 (3)           13.6%
                        All directors and executive officers as a group          205,300               56.1%
</TABLE>

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

(1)    Includes (i) 40,000 shares held in irrevocable trust of Elaine A.
       Merriman for the benefit of Michael A. Merriman and Marybeth Merriman
       Sotos (the wife of Timothy S. Sotos), of which trust Michael A. Merriman
       is the sole Trustee with sole voting and investment power and (ii) 9,000
       shares held as Custodian for Jack D. Merriman, II, over which shares
       Michael A. Merriman has sole voting and investment power.

(2)    FHC has an option to acquire 17,301 of these shares at a per share price
       of $188.

(3)    Includes (i) 40,500 shares owned by Marybeth Merriman Sotos and (ii)
       9,300 shares held as Custodian for Maryelaine Sotos, Timothy J. Sotos and
       James P. Sotos, over which shares Timothy S. Sotos has sole voting and
       investment power.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Agreements with FHC

     Americo or one of its subsidiaries has the following agreements with FHC or
its affiliates, none of which may be deemed the result of arm's length
negotiations between independent parties.

     Advisory Agreement. The Company appointed FHC to act as investment advisor
on a non-exclusive basis to the Company and its wholly-owned insurance
subsidiaries pursuant to an advisory agreement between the Company and FHC
("Advisory Agreement"). Under the Advisory Agreement, as amended in 1999, FHC
supervises and directs the composition of the investment portfolios of the
Company and its insurance subsidiaries in accordance with their respective
objectives and policies. For its services under the Advisory Agreement, FHC is
paid in advance a quarterly fee based on the aggregate statutory book value of
the investable assets of the Company and its subsidiaries as of the end of the
prior fiscal quarter. Under this formula, the fee paid for the year ended
December 31, 2001 was $3.9 million. FHC also is entitled to receive
reimbursement for certain commissions, brokerage and other expenses incurred by
it in the performance of its duties. The Company recovers amounts paid to FHC
under the Advisory Agreement from the insurance subsidiaries, subject to
regulatory limitations. The Advisory Agreement provides that FHC shall not be
liable for any losses except for those resulting from willful misfeasance, bad
faith or gross negligence, or from reckless disregard by FHC of its duties.



<PAGE>


     Data Processing Agreement. Pursuant to a data processing services agreement
("Data Processing Agreement") between FHC and the Company, as amended in 1999,
FHC provides the Company and its insurance subsidiaries with record-keeping
services for certain life insurance and annuity products. FHC is party to an
agreement with CSC, a third-party vendor, which provides these services. The
Company pays FHC an amount equal to (i) the amount FHC pays to CSC plus (ii)
amortization of FHC's development costs. The aggregate fee paid for the year
ended December 31, 2001 under the Data Processing Agreement was $8.6 million.
FHC also is entitled to reimbursement for its reasonable out-of-pocket expenses
incurred in performing the Data Processing Agreement. The Company is also a
party to a separate data processing services agreement with its wholly-owned
insurance subsidiaries wherein the subsidiaries agree to use the services FHC
provides and to pay for them pursuant to a separate data processing services
agreement (the "Subsidiary Data Processing Agreement"). Under the Data
Processing Agreement, Americo agrees to indemnify FHC against liabilities
arising out of, among other matters, actions taken by FHC under the agreement in
good faith and with due diligence. Americo's subsidiaries have similar
indemnification agreements with Americo under the Subsidiary Data Processing
Agreement.

     Reimbursement of Expense Agreement. The Company and its subsidiaries have
entered into a cost sharing agreement with FHC respecting air transportation
expenses arising from the use of an airplane owned by a subsidiary of FHC. Under
this agreement, each party pays the cost of any air transportation expenses
which can be identified as incurred for its sole benefit, and expenses which
cannot be so identified are allocated based on utilization. Americo and its
subsidiaries incurred approximately $0.3 million of expense under this agreement
for the year ended December 31, 2001.

     FHC Lease. The Company's subsidiary, United Fidelity, owns a building in
Kansas City which is leased to and occupied by FHC. Under the terms of the
lease, FHC pays $8,500 per month in rent and has an option to purchase the
building for $1.2 million, an amount equal to its statutory book value and which
approximates its current fair market value. The exercise price of the option is
revised annually to the greater of fair market value or statutory carrying
value. Management believes that the rentals under the lease are comparable to
market rental values for comparable space and footage in the local market.

Other Transactions

     FHC and certain of its non-life insurance subsidiaries, including the
Company, are parties to a tax sharing agreement under which (i) tax savings and
tax detriments inure to the party contributing the expense or other item that
reduces or increases, as the case may be, the consolidated group's taxes from
what they would have been had each member filed separately, and (ii) losses
arising from filing the consolidated return are equitably divided among the
parties in the same manner that they benefited from savings caused by filing a
consolidated return.

     The Company leases office space (and related parking facilities) in
buildings owned by Broadway Square Partners, LLP, a limited liability
partnership in which one of the partners is SCOL, Inc. ("SCOL"), a Missouri
corporation, owned by members of the Merriman family. The aggregate amount paid
(including rentals and expense reimbursement) under the lease to Broadway Square
Partners in 2001 was approximately $1.4 million. The terms of the lease are as
favorable to the Company as those offered to other unaffiliated tenants of the
building.

     Subsidiaries of the Company paid an aggregate of approximately $0.3 million
in 2001 to Clinical Reference Laboratory, Inc., a Kansas corporation
("Clinical"), which is controlled by the Merriman family and of which Timothy S.
Sotos is Chairman of the Board. The amounts paid were for medical testing
services performed for the Company's life insurance subsidiaries. The rates paid
were competitive with those charged by Clinical to similarly situated
unaffiliated insurance companies for similar services.

     On December 31, 2001, the Company issued 1,350,000 shares of cumulative
Series A Preferred Stock with a stated value of $135.0 million to FHC in
exchange for an equal number of shares of FHC cumulative preferred stock. This
transaction is more fully described in Item 7 "Management's Discussion and
Analysis of Financial Condition and Results of Operations" included elsewhere
herein.



<PAGE>


                                     PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

     (a) Financial Statements and Financial Statement Schedules:

     Reference is made to the indexes set forth on pages F-1 and S-1 of this
report.

     Financial statements of the Company's 50% owned subsidiaries have been
omitted because the Company's proportionate share of the income from continuing
operations before income taxes of such subsidiaries is less than 20% of
consolidated income from continuing operations before income taxes, and the
Company's investment in and advances to such subsidiaries is less than 20% of
consolidated total assets of the Company.

     (b)      Exhibits:

2.1(a)(1)         Stock Purchase Agreement dated January 21, 1997 between Great
                  Southern Life Insurance Company and Farmers Group,  Inc.
                  (incorporated  by reference from Exhibit  2.3(a) to
                  Registrant's Form 10-K (File No. 33-64820) for the year ended
                  December 31, 1996).

2.1(a)(2)         Amendment No. 1 dated April 15, 1997 to Stock Purchase
                  Agreement by and between Farmers Group, Inc. and Great
                  Southern Life Insurance  Company  (incorporated by reference
                  from Exhibit 2.1(b) to Registrant's Form 10-Q (File No.
                  33-64820) for the quarter ended March 31, 1997).

2.1(b)            Automatic Coinsurance Reinsurance Agreement entered into
                  between The Ohio State Life Insurance Company and Employers
                  Reassurance Corporation (incorporated by reference from
                  Exhibit 2.3(b) to Registrant's Form 10-K (File No. 33-64820)
                  for the year ended December 31, 1996).

2.1(c)            Automatic Coinsurance Reinsurance Agreement entered into
                  between  Investors  Guaranty  Life Insurance Company and
                  Employers Reassurance Corporation (incorporated by reference
                  from Exhibit 2.3(c) to Registrant's Form 10-K (File No.
                  33-64820) for the year ended December 31, 1996).

2.1(d)            Modified Coinsurance Retrocession Agreement (Ohio State Life
                  Business) entered into between Great Southern Life Insurance
                  Company and Employers Reassurance Corporation (incorporated by
                  reference from Exhibit 2.3(d) to Registrant's  Form 10-K
                  (File No. 33-64820) for the year ended December 31, 1996).

2.1(e)            Modified Coinsurance Retrocession Agreement (Investors
                  Guaranty Life Business) to be entered into between Great
                  Southern Life Insurance Company and Employers Reassurance
                  Corporation (incorporated by reference from Exhibit 2.3(e) to
                  Registrant's Form 10-K (File No. 33-64820) for the year ended
                  December 31, 1996).

2.1(f)            Escrow  Agreement (Ohio State  Life/Investors  Guaranty Life
                  Business)  entered into between Great Southern Life Insurance
                  Company and Employers Reassurance Corporation (incorporated by
                  reference from Exhibit 2.3(f) to Registrant's  Form 10-K
                  (File No. 33-64820) for the year ended December 31, 1996).

2.1(g)            Investment Management Agreement (Ohio State Life Business)
                  entered into between  Americo Life, Inc. and Employers
                  Reassurance Corporation (incorporated by reference from
                  Exhibit  2.3(g) to Registrant's Form 10-K (File No. 33-64820)
                  for the year ended December 31, 1996).

2.1(h)            Investment Management Agreement (Investors Guaranty Life
                  Business) entered into between Americo Life, Inc. and
                  Employers Reassurance Corporation (incorporated by reference
                  from Exhibit 2.3(h) to Registrant's Form 10-K (File No.
                  33-64820) for the year ended December 31, 1996).


<PAGE>



2.2               Stock Purchase Agreement dated February 27, 1998 between Great
                  Southern Life Insurance  Company and John Hancock  Mutual Life
                  Insurance Company related to the sale of Investors Guaranty
                  Life Insurance Company (incorporated by reference from Exhibit
                  2.4 to Registrant's Form 10-Q (File No. 33-64820) for the
                  quarter ended March 31, 1998).

2.3               Purchase Agreement dated October 1, 1998 between the
                  Registrant, Robert L. Myer, Great Southern Group,  Inc.,
                  Marketing  Services  Group,  Inc., NAP Partners,  Inc.,  and
                  Pension  Consultants & Administrators,  Inc. (incorporated by
                  reference from Exhibit 25 to Registrant's  Form 10-Q (File
                  No.  33-64820) for the quarter ended September 30, 1998).

3.1*              Restated Articles of Incorporation, as amended December 28,
                  2001, of the Registrant.

3.2               Bylaws, as amended, of the Registrant  (incorporated by
                  reference from Exhibit 3.2 to Registrant's Form S-4 (File No.
                  33-64820) filed June 22, 1993).

3.3*              Certificate of Designations of Series A Preferred Stock of
                  Americo Life, Inc. dated December 21, 2001.

4.1(a)            Conformed  copy of Indenture,  dated as of May 25, 1993,
                  between  Registrant and Commerce Bank of Kansas City, N.A.,
                  as trustee  (incorporated  by reference from Exhibit 4.1 to
                  Registrant's Form S-4 (File No.33-64820) filed June 22, 1993).

4.1(b)            Form of 9 1/4% Senior Subordinated Note Due 2005 (included in
                  the Indenture filed as Exhibit 4.1(a) hereto) (incorporated
                  by reference from Exhibit 4.2 to  Registrant's Form S-4 (File
                  No. 33-64820) filed June 22, 1993).

4.3(a)            Form of Registrant's  $5,000,000 5 1/2% Senior Subordinated
                  Set-off Note due 2015.  (Incorporated by reference from
                  Exhibit 4.1 (c) to Registrant's  Form 8-K report (File No.
                  33-64820) dated as of July 10, 1995).

4.3(b)            Form of Registrant's $6,000,000 6 1/2% Senior Subordinated
                  Note (No. VNO-1-R) due 2010. (Two identical notes (No. VNO-1-R
                  and No.  VNO-2-R)  were issued in 1998 as  replacements  for
                  notes originally  issued on July 10, 1995.  Pursuant to
                  instruction  2 to Item 601 of  Regulation  S-K, only VNO-1-R
                  is filed).

4.4*              Amended and Restated Surplus Debenture No. 004, dated December
                  1, 2001, as amended,  in the amount of $57,760,000  made by
                  United  Fidelity Life Insurance Company (successor by merger
                  to FHC Life Insurance Company) to the Registrant.

4.5               Amended and Restated Surplus Debenture No. 005, dated December
                  1, 1999, in the amount of $18,000,000 made by United Fidelity
                  Life Insurance Company (successor by merger to FHC Life
                  Insurance Company) to the Registrant (incorporated by
                  reference from Exhibit 4.5 to Registrant's Form 10-K report
                  (File No. 33-64820) for the year ended December 31, 1999).

4.6               Amended and Restated Surplus Debenture No. 006, dated December
                  1, 1995, as amended, in the amount of $16,125,753  made by
                  United  Fidelity Life  Insurance  Company to Registrant
                  (incorporated  by reference from Exhibit  4.6 to Registrant's
                  Form 10-K (File No. 33-64820) for the year ended December 31,
                  1995).

4.7               Amended and Restated Surplus Debenture No. 007 dated January
                  1, 1999 in the amount of $38,000,000 made by United  Fidelity
                  Life Insurance Company payable to the Registrant (incorporated
                  by reference from Exhibit 4.7 to Registrant's Form 10-Q report
                  (File No.  33-64820) for the quarter ended June 30, 1999).

<PAGE>
4.8               In accordance with Item  601(b)(4)(iii)(A) of Regulation S-K,
                  certain instruments  respecting long term debt of the
                  Registrant and its  subsidiaries  have been omitted but will
                  be furnished to the Commission upon request.

10.1              Senior Officer Accidental Death and Dismemberment  Policy
                  (incorporated by reference from Exhibit 10.1 to Registrant's
                  Form S-4 (File No. 33-64820) filed June 22, 1993).

10.2(a)           Tax Sharing Agreement dated as of December 1, 1994, among the
                  Registrant, Financial Holding Corporation, Cidat Aviation
                  Incorporated, Assured Leasing Corporation, Landmark Mortgage
                  Company, First Consulting & Administration, Inc., Hanover
                  Financial Corporation, United Fidelity Life Insurance Company,
                  PFS Holding Company, Premium Finance Specialists, Inc.,
                  Premium Financing Specialists of California and PFS Financing
                  Corporation (incorporated by reference from Exhibit 10.2 to
                  Registrant's Form 10-K (File No. 33-64820) for the year ended
                  December 31, 1994).

10.2(b)           Amendment, effective as of January 1, 1996,  to Tax Sharing
                  Agreement,  adding the Victory Life Insurance Company as a
                  party  (incorporated by reference from Exhibit 10.2(b) to
                  Registrant's Form 10-K (File No. 33-64820) for the year ended
                  December 31, 1997).

10.2(c)           Amendment, effective as of December 31, 1999, to Tax Sharing
                  Agreement, adding Americo Retirement Services, Inc., CAPCO
                  Holdings, L.C., GSSW LM, Inc., GSSW WR, Inc., and GSSW WWA,
                  Inc. as parties.

10.2(d)           Amendment, effective January 1, 1998, to Tax Sharing
                  Agreement, adding The Ohio State Life Insurance Company as a
                  party.

10.3(a)           Reimbursement of Expense Agreement dated January 1, 1993,
                  among the Registrant, Financial Holding Corporation, United
                  Fidelity Life Insurance Company, The College Life Insurance
                  Company of America, Loyalty Life Insurance Company, National
                  Farmers Union Life Insurance Company, Great Southern Life
                  Insurance Company, PFS Holding Company and Premium Financing
                  Specialists, Inc. (incorporated by reference from Exhibit 10.5
                  to Registrant's Form S-4 (File No. 33-64820) filed June 22,
                  1993).

10.3(b)           Amendment dated August 29, 1997, to Reimbursement of Expense
                  Agreement removing  Loyalty Life Insurance Company as a party
                  (incorporated by reference from Exhibit 10.3(b) to
                  Registrant's Form 10-K (File No. 33-64820) for the year ended
                  December 31, 1997).

10.3(c)           Amendment dated October 1, 1997, to Reimbursement of Expense
                  Agreement adding Americo  Services, Inc. and The Ohio State
                  Life Insurance Company as parties and removing Argus Health
                  Systems,  Inc. as a party (incorporated by reference from
                  Exhibit 10.3(c) to Registrant's Form 10-K (File No. 33-64820)
                  for the year ended December 31, 1997).

10.4(a)           Cost Sharing Agreement dated as of January 1, 1993, among the
                  Registrant, United Fidelity Life Insurance Company, The
                  College Life Insurance Company of America, Premium Financing
                  Specialists, Inc., PFS Holding Company, Financial Assurance
                  Marketing Corporation, Great Southern Life Insurance Company,
                  Loyalty Life Insurance Company and National Farmers Union Life
                  Insurance Company (incorporated by reference from Exhibit 10.8
                  to Registrant's Form S-4 (File No. 33-64820) filed June 22,
                  1993).

10.4(b)           Amendment dated August 29, 1997, to Cost Sharing Agreement,
                  removing  Loyalty Life  Insurance Company as a party
                  (incorporated by reference from Exhibit 10.4(b) to
                  Registrant's  Form 10-K (File No. 33-64820)for the year ended
                  December 31, 1997).

10.4(c)           Amendment dated October 1, 1997, to Cost Sharing Agreement
                  adding Americo  Services,  Inc. and The Ohio State Life
                  Insurance Company as parties and removing PFS Holding Company
                  and  Premium Financing Specialists, Inc. as parties
                  (incorporated by reference from Exhibit 10.4(c) to
                  Registrant's Form 10-K (File No. 33-64820) for the year ended
                  December 31, 1997).
<PAGE>
10.5              Data  Processing  Services  Agreement  dated as of January 1,
                  1993,  between  the  Registrant  and Financial  Holding
                  Corporation (incorporated by reference from Exhibit 10.9 to
                  Registrant's Form S-4 (File No.33-64820) filed June 22, 1993).

10.5(a)           Amendment,  effective  January 1, 1999, to the Data
                  Processing  Agreement  dated January 1, 1993, between the
                  Registrant and Financial Holding  Corporation  (incorporated
                  by reference from Exhibit 10.5(a) to Registrant's Form 10-Q
                  (File No. 33-64820) for the quarter ended September 30, 1999).

10.6(a)           Subsidiary Data Processing Services Agreement dated as of
                  January 1, 1993, among the Registrant, FHC Life Insurance
                  Company, United Fidelity Life Insurance Company, Great
                  Southern Life Insurance Company, The College Life Insurance
                  Company of America, Loyalty Life Insurance Company and
                  National Farmers Union Life Insurance Company (incorporated by
                  reference from Exhibit 10.10 to Registrant's Form S-4 (File
                  No. 33-64820) filed June 22, 1993).

10.6(b)           Amendment dated August 29, 1997, to Subsidiary Data
                  Processing  Services  Agreement  removing Loyalty Life as a
                  party (incorporated by reference from Exhibit 10.6(b) to
                  Registrant's Form 10-K (File No. 33-64820) for the year ended
                  December 31, 1997).

10.6(c)           Amendment dated October 1, 1997, to Subsidiary Data Processing
                  Services  Agreement adding Americo Services,  Inc. and The
                  Ohio State Life Insurance  Company as parties  (incorporated
                  by reference from Exhibit  10.6(c) to  Registrant's  Form 10-K
                  (File No.  33-64820) for the year ended December 31, 1997).

10.7(a)           Advisory  Agreement  dated as of January 1, 1993, between the
                  Registrant  and Financial  Holding Corporation  (incorporated
                  by reference  from Exhibit  10.11 to  Registrant's  Form S-4
                  (File No. 33-64820) filed June 22, 1993).

10.7(b)           First Amendment to Advisory Agreement dated September 17, 1993
                  by and between the Registrant and Financial  Holding
                  Corporation  (incorporated  by reference from Exhibit  10.8(b)
                  to Registrant's Form 10-Q (File No. 33-64820) for the quarter
                  ended March 31, 1994).

10.7(c)           Third Amendment, effective January 1, 1999, to the Advisory
                  Agreement dated September 17, 1993 by and between the
                  Registrant  and Financial  Holding  Corporation (incorporated
                  by reference from Exhibit 10.7(c) to Registrant's Form 10-Q
                  (File No. 33-64820) for the quarter ended September 30, 1999).

10.8              Office  Building Lease dated as of January 1, 1993,  between
                  Financial Holding Corporation and United  Fidelity Life
                  Insurance Company (incorporated by reference from Exhibit
                  10.12 to Registrant's Form S-4 (File No. 33-64820) filed June
                  22, 1993).

10.9              Lease  Agreement  dated February 24, 1988,  between  Broadway
                  Square Partners and United Fidelity Life Insurance  Company
                  (incorporated  by reference from Exhibit 10.13 to Registrant's
                  Form S-4 (File No. 33-64820) filed June 22, 1993).

10.9(a)           First Amendment to Lease Agreement dated October 10, 1998,
                  between Broadway Square Partners and United Fidelity Life
                  Insurance Company (incorporated by reference from Exhibit
                  10.9(a) to Registrant's Form 10-K (File No. 33-64820) for the
                  year ended December 31, 1998).

10.10             Lease dated November 1, 1990, between United Fidelity Life
                  Insurance Company and First Consulting & Administration, Inc.,
                  a subsidiary of Financial Holding Corporation (included as
                  Exhibit A to Exhibit 10.11) (incorporated by reference from
                  Exhibit 10.14 to Registrant's Form S-4 (File No. 33-64820)
                  filed June 22, 1993).

10.11             Assignment of Lease dated as of April 1, 1993 between United
                  Fidelity Life Insurance  Company and Finance Holding
                  Corporation  respecting the First Consulting & Administration
                  Lease described in Exhibit 10.10  (incorporated  by reference
                  from Exhibit 10.15 to  Registrant's  Form S-4 (File No.
                  33-64820) filed June 22, 1993).
<PAGE>
10.12             Office Lease Agreement dated February 19, 1997,  between
                  Metropolitan  Life Insurance Company and Great Southern Life
                  Insurance (incorporated by reference from Exhibit 10.12 to
                  Registrant's  Form 10-K (File No. 33-64820) for the year ended
                  December 31, 1997).

10.13             Stock Transfer Restriction and Option Agreement dated June 30,
                  1989 among DST Systems, Inc., Argus Health  Systems, Inc. and
                  Financial Holding Corporation (incorporated by reference from
                  Exhibit 10.22 to Registrant's Form S-4 (File No. 33-64820)
                  filed June 22, 1993).

10.14             Supplemental Tax Sharing Agreements dated December 31, 1993
                  among Financial Holding Corporation, the Registrant and United
                  Fidelity Life Insurance Company (incorporated by reference
                  from Exhibit 10.20 to Registrant's Form 10-Q (File No.
                  33-64820) for the quarter ended March 31, 1994).

10.15(a)(1)       Master Agreement dated as of July 31, 1995, among The Ohio
                  Life Insurance Company, The Ohio Casualty Insurance Company,
                  the Registrant and Great Southern Life Insurance Company
                  (incorporated by reference from Exhibit 10.21 to Registrant's
                  Form 10-Q (File No. 33-64820) for the quarter ended June 30,
                  1995).

10.15(a)(2)       First Amendment to Master Agreement between The Ohio Life
                  Insurance Company, The Ohio Casualty Insurance Company and
                  Great Southern Life Insurance Company dated as of October 2,
                  1995 (incorporated by reference from Exhibit 10.21(b) to
                  Registrant's Form 10-Q (File No. 33-64820) for the quarter
                  ended September 30, 1995).

10.15(a)(3)       Second Amendment to Master Agreement between The Ohio Life
                  Insurance Company, The Ohio Casualty Insurance Company and
                  Great Southern Life Insurance Company dated as of November 17,
                  1997 (incorporated by reference from Exhibit 10.20(a)(3) to
                  Registrant's Form 10-K (File No. 33-64820) for the year ended
                  December 31, 1997).

10.15(b)          Assignment and Assumption Agreement between The Ohio Life
                  Insurance Company and Great Southern Life Insurance Company
                  dated as of October 2, 1995 (incorporated by reference from
                  Exhibit 10.21(c) to Registrant's Form 10-Q (File No. 33-64820)
                  for the quarter ended September 30, 1995).

10.15(c)          Custodian Agreement between State Street Bank and Trust
                  Company of Boston, Massachusetts, Employers Reassurance
                  Corporation of Overland Park, Kansas and Great Southern Life
                  Insurance Company dated as of January 14, 2000 (incorporated
                  by reference from Exhibit 10.15(c) to Registrant's Form 10-K
                  (File No. 33-64820) for the year ended December 31, 1999).

10.15(e)          Investment  Management Agreement between the Registrant and
                  Employers  Reassurance  Corporation of Overland  Park,  Kansas
                  dated as of October  2, 1995 (incorporated by  reference from
                  Exhibit 10.21(g) to Registrant's Form 10-Q (File No. 33-64820)
                  for the quarter ended September 30, 1995).

10.15(f)          Assumption  Reinsurance  Agreement between The Ohio Life
                  Insurance Company and Great Southern Life Insurance Company
                  dated as of October 2, 1995  (incorporated by reference from
                  Exhibit 10.21(i) to Registrant's Form 10-Q (File No. 33-64820)
                  for the quarter ended September 30, 1995).

10.15(g)(1)       Reinsurance Agreement between Employers Reassurance
                  Corporation of Overland Park, Kansas and The Ohio Life
                  Insurance Company, effective January 1, 1995 (transfer date
                  October 2, 1995) and amendments thereto (incorporated by
                  reference from Exhibit 10.21(k) to Registrant's Form 10-Q
                  (File No. 33-64820) for the quarter ended September 30, 1995).

10.15(g)(2)       Amendment No. 4 to the Reinsurance  Agreement  between
                  Employers Reassurance Corporation of Overland Park, Kansas and
                  The Ohio Life Insurance Company  effective  April 1, 1996
                  (incorporated  by reference from Exhibit  10.20(g)(2)  to
                  Registrant's  Form 10-K (File No.  33-64820) for the year
                  ended December 31, 1997).


<PAGE>


10.15(h)          Retrocession  Agreement  between Great Southern Life Insurance
                  Company and Employers Reassurance Corporation of Overland
                  Park, Kansas, effective January 1, 1995 and amendments thereto
                  (incorporated by reference from Exhibit  10.21(l) to
                  Registrant's  Form 10-Q (File No. 33-64820) for the quarter
                  ended September 30, 1995).

10.15(i)(1)       Services Agreement between the Registrant, The Ohio Life
                  Insurance Company and The Ohio Casualty Insurance Company
                  dated as of October 2, 1995 (incorporated by reference from
                  Exhibit 10.21(m) to Registrant's Form 10-Q (File No. 33-64820)
                  for the quarter ended September 30, 1995).

10.15(i)(2)       First Amendment to Services Agreement between the Registrant,
                  The Ohio Life Insurance Company and The Ohio Casualty
                  Insurance Company dated as of March 27, 1997 (incorporated by
                  reference from Exhibit 10.20(i)(2) to Registrant's Form 10-K
                  (File No. 33-64820) for the year ended December 31, 1997).

10.15(i)(3)       Amendment to Services Agreement between the Registrant, The
                  Ohio Life Insurance Company and The Ohio Casualty Insurance
                  Company dated as of November 17, 1997 (incorporated by
                  reference from Exhibit 10.20(i)(3) to Registrant's Form 10-K
                  (File No. 33-64820) for the year ended December 31, 1997).

10.16(a)          Master  Agreement  dated February 26, 1996 among Fremont Life
                  Insurance  Company,  Fremont General Corp.,  the Registrant
                  and Great Southern Life Insurance  Company  (incorporated by
                  reference from Exhibit 10 to Registrant's Form 10-Q (File No.
                  33-64820) for the quarter ended March 31, 1996).

10.16(b)          First Amendment to Master Agreement dated as of July 1, 1996,
                  among Fremont Life Insurance Company, Fremont General Corp.,
                  Registrant and Great Southern Life Insurance Company
                  (incorporated by reference from Exhibit 10.1(b) to
                  Registrant's Form 10-Q (File No. 33-64820) for the quarter
                  ended June 30, 1996).

10.16(c)          Letter  Agreement dated as of July 1, 1996,  among Fremont
                  General Corp.,  Fremont Life Insurance Company,  Registrant
                  and Great Southern Life Insurance Company (incorporated  by
                  reference from Exhibit  10.1(c) to  Registrant's  Form 10-Q
                  (File No.  33-64820)  for the quarter  ended June 30, 1996).

10.16(d)          Services  Agreement  dated as of July 1, 1996,  between
                  Registrant and Fremont Life  Insurance Company (incorporated
                  by reference  from  Exhibit  10.1(d) to  Registrant's  Form
                  10-Q (File No. 33-64820) for the quarter ended June 30, 1996).

10.16(e)          Assumption Reinsurance and Coinsurance Agreement (Universal
                  Life) dated as of July 1, 1996, between Fremont Life Insurance
                  Company and Great Southern Life Insurance Company
                  (incorporated by reference from Exhibit 10.1(e) to
                  Registrant's  Form 10-Q (File No.  33-64820)  for the quarter
                  ended June 30, 1996).

10.16(f)          Assumption Reinsurance and Coinsurance Agreement (Annuities)
                  dated as of July 1, 1996, between Fremont Life Insurance
                  Company and Great Southern Life Insurance Company
                  (incorporated by reference from Exhibit 10.1(f) to
                  Registrant's Form 10-Q (File No. 33-64820) for the quarter
                  ended June 30, 1996).

10.16(g)          Assignment and Assumption Agreement dated as of July 1, 1996,
                  between Fremont Life Insurance Company and Great Southern Life
                  Insurance Company (incorporated by reference from Exhibit
                  10.1(g) to Registrant's Form 10-Q (File No. 33-64820) for the
                  quarter ended June 30, 1996).


<PAGE>


10.16(h)          Automatic  Coinsurance Universal Life Reinsurance Agreement
                  dated as of December 31, 1995, between Fremont Life Insurance
                  Company and Employers  Reassurance  Corporation (incorporated
                  by reference from Exhibit 10.1(h) to Registrant's  Form 10-Q
                  (File No. 33-64820) for the quarter ended June 30, 1996).

10.16(i)          Amendment No. 1 to the Automatic  Coinsurance  Universal Life
                  Reinsurance Agreement dated as of December 31, 1995, between
                  Employers Reassurance Corporation and Fremont Life Insurance
                  Company (incorporated by reference from Exhibit 10.1(i) to
                  Registrant's  Form 10-Q (File No. 33-64820) for the quarter
                  ended June 30, 1996).

10.16(j)          Automatic Coinsurance  Annuity  Reinsurance  Agreement  dated
                  as of  January  1,  1996,  between Employers  Reassurance
                  Corporation and Fremont Life Insurance Company  (incorporated
                  by reference from Exhibit 10.1(j) to Registrant's  Form 10-Q
                  (File No. 33-64820) for the quarter ended June 30,
                  1996).

10.16(k)          Amendment No. 1 to the Automatic  Coinsurance Annuity
                  Reinsurance Agreement dated as of January 1, 1996, between
                  Employers  Reassurance Corporation and Fremont Life Insurance
                  Company (incorporated by reference from Exhibit  10.1(k) to
                  Registrant's  Form 10-Q (File No.  33-64820) for the quarter
                  ended June 30, 1996).

10.16(l)          Custodian Agreement dated as of January 14, 2000, among State
                  Street Bank and Trust Company, Employers Reassurance
                  Corporation and Great Southern Life Insurance Company
                  (incorporated by reference from Exhibit 10.16(l) to
                  Registrant's Form 10-K (File No. 33-64820) for the year ended
                  December 31, 1999).

10.16(m)          Modified  Coinsurance  Annuity  Retrocession  Agreement dated
                  as of  January  1,  1996,  between Employers  Reassurance
                  Corporation  and Great Southern Life Insurance  Company
                  (incorporated  by reference  from Exhibit  10.1(m) to
                  Registrant's  Form 10-Q (File No.  33-64820)  for the quarter
                  ended June 30, 1996).

10.16(n)          Modified Coinsurance  Universal Life and Annuity  Retrocession
                  Agreement dated as of December 31, 1995,  between  Employers
                  Reassurance  Corporation  and Great  Southern  Life  Insurance
                  Company (incorporated by reference from Exhibit 10.1(n) to
                  Registrant's  Form 10-Q (File No. 33-64820) for the quarter
                  ended June 30, 1996).

10.16(o)          Amendment No. 1 to the  Investment  Management  Agreement
                  dated as of December 31, 1995,  between Registrant and
                  Employers Reassurance  Corporation (incorporated by reference
                  from Exhibit 10.1(o) to Registrant's Form 10-Q (File No.
                  33-64820) for the quarter ended June 30, 1996).

10.17*            Stipulation of Settlement in re Great Southern Life Insurance
                  Company Sales Practices Litigation

10.18*            Settlement Agreement between The College Life Insurance
                  Company of America and plaintiffs in re Notzon, et al v. The
                  College Life Insurance Company of America, et al.

10.19*            Irrevocable Grantor Trust Agreement dated as of December 31,
                  2001, between Commerce Bank, N.A.,
                  as Trustee, and Americo Retirement Services, Inc., as Grantor

21*               Subsidiaries of the Registrant

*  Filed herewith.
-------------------------

(c)      Reports on Form 8-K.

         There were no reports on Form 8-K filed for the three months ended
         December 31, 2001.


<PAGE>




                                   SIGNATURES

     Pursuant to the requirements of Section 13 or 15 (d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of Kansas
City and the State of Missouri, on the 27th day of March, 2002.


                      AMERICO LIFE, INC.


                      By:                     /s/ Gary L. Muller
                         ------------------------------------------------------

                      Name: Gary L. Muller
                      Title:  President and Chief Executive Officer


     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed by the following persons on behalf of the registrant and
in the capacities and on the dates indicated:

                                Title                          Date


   /s/ Michael A. Merriman      Chairman of the Board of       March 27, 2002
----------------------------    Directors
   Michael A. Merriman


  /s/ Gary L. Muller            President, Chief Executive     March 27, 2002
----------------------------    Officer and Director
   Gary L. Muller


  /s/ Mark K. Fallon            Senior Vice President and      March 27, 2002
----------------------------    Chief Financial Officer
   Mark K. Fallon               (Principal Financial Officer and
                                Principal Accounting Officer)







<PAGE>




                       AMERICO LIFE, INC. AND SUBSIDIARIES

                          INDEX TO FINANCIAL STATEMENTS
<TABLE>

                                                                                                               Page
Audited Financial Statements for the Three Years Ended December 31, 2001:


<S>                                                                                                              <C>
  Report of Independent Accountants                                                                            F-2

  Consolidated Balance Sheet at December 31, 2001 and 2000                                                     F-3

  Consolidated Statement of Income for the Years Ended December 31, 2001, 2000 and 1999                        F-4

  Consolidated Statement of Stockholder's Equity for the Years Ended December 31, 2001, 2000 and 1999          F-5

  Consolidated Statement of Cash Flows for the Years Ended December 31, 2001, 2000 and 1999                    F-6

  Notes to Consolidated Financial Statements                                                                   F-8
</TABLE>




<PAGE>



                        Report of Independent Accountants


To the Board of Directors and
Stockholder of Americo Life, Inc.

     In our opinion, the accompanying consolidated balance sheets and the
related consolidated statements of income, of stockholder's equity and of cash
flows present fairly, in all materials respects, the financial position of
Americo Life, Inc. and its subsidiaries at December 31, 2001, and 2000, and the
results of their operations and their cash flows for each of the three years in
the period ended December 31, 2001, in conformity with accounting principles
generally accepted in the United States of America. These financial statements
are the responsibility of the Company's management; our responsibility is to
express an opinion on these financial statements based on our audits. We
conducted our audits of these statements in accordance with auditing standards
generally accepted in the United States of America which require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for the opinion.




PRICEWATERHOUSECOOPERS LLP
Kansas City, Missouri
March 25, 2002


<PAGE>



                       Americo Life, Inc. and Subsidiaries
                           Consolidated Balance Sheet
                             (Dollars in thousands)
                           December 31, 2001 and 2000
<TABLE>

                                                                                            2001              2000
                                                                                            ----              ----
                                       Assets

<S>     <C>                                                                          <C>               <C>
Investments:
   Fixed Maturities:
     Held to maturity, at amortized cost (market: $712,314 and $737,496)               $     694,889    $     742,618
     Available for sale, at market (amortized cost: $1,308,773 and $1,050,421)             1,321,040        1,032,937
     Trading, at market (amortized cost: $57,747 and $0)                                      57,760                -
   Equity securities, at market (cost: $48,598 and $57,920)                                   74,531          104,771
   Investment in equity subsidiaries                                                           7,518           14,259
   Mortgage loans on real estate, net                                                        269,910          268,902
   Investment real estate, net                                                                28,196           30,398
   Policy loans                                                                              189,683          194,651
   Other invested assets                                                                      41,602           32,345
                                                                                       -------------    -------------

     Total investments                                                                     2,685,129        2,420,881

Cash and cash equivalents                                                                     59,714          110,260
Accrued investment income                                                                     34,050           31,730
Amounts receivable from reinsurers                                                         1,125,586        1,139,673
Other receivables                                                                             55,353          101,148
Deferred policy acquisition costs                                                            242,170          228,679
Cost of business acquired                                                                    149,679          166,458
Amounts due from affiliates                                                                    7,980                -
Other assets                                                                                  19,375           42,325
                                                                                       -------------    -------------
     Total assets                                                                      $   4,379,036    $   4,241,154
                                                                                       =============    =============

                        Liabilities and Stockholder's Equity
Policyholder account balances                                                          $   2,729,865    $   2,623,747
Reserves for future policy benefits                                                          811,355          819,943
Unearned policy revenues                                                                      50,907           54,599
Policy and contract claims                                                                    38,068           32,612
Other policyholder funds                                                                     151,946          113,496
Notes payable                                                                                101,547          102,297
Amounts payable to reinsurers                                                                 39,489           39,056
Deferred income taxes                                                                         65,825           56,897
Due to broker                                                                                 70,588           66,899
Amounts due to affiliates                                                                          -            2,744
Other liabilities                                                                             67,138           74,202
                                                                                       -------------    -------------

     Total liabilities                                                                     4,126,728        3,986,492

Stockholder's equity:
   Common stock ($1 par value, 30,000 shares authorized, 10,000 shares
    issued and outstanding)                                                                       10               10
   Preferred stock, net of investment in parent company preferred stock (Note 8)                   -                -
   Additional paid-in capital                                                                  3,745            3,745
   Accumulated other comprehensive income                                                     30,757           35,635
   Retained earnings                                                                         217,796          215,272
                                                                                       -------------    -------------

     Total stockholder's equity                                                              252,308          254,662
                                                                                       -------------    -------------

Commitments and contingencies

     Total liabilities and stockholder's equity                                        $   4,379,036    $   4,241,154
                                                                                       =============    =============
</TABLE>

           See accompanying notes to consolidated financial statements
<PAGE>
                       Americo Life, Inc. and Subsidiaries

                        Consolidated Statement of Income
                (Dollars in thousands, except per share amounts)
              For the Years Ended December 31, 2001, 2000 and 1999
<TABLE>


                                                                       2001              2000             1999
                                                                       ----              ----             ----

<S>                                                              <C>              <C>               <C>
Income
   Premiums and policy revenues                                   $    206,883     $    220,691      $    224,896
   Net investment income                                               211,081          225,517           227,622
   Net realized investment gains (losses)                               (1,095)          (6,573)            4,174
   Other income                                                          7,149           10,792             6,147
                                                                  ------------     ------------      ------------
     Total income                                                      424,018          450,427           462,839
                                                                  ------------     ------------      ------------

Benefits and expenses
   Policyholder benefits:
     Death benefits                                                    116,475          105,940           123,644
     Interest credited on universal life and annuity products          112,013          114,709           108,088
     Other policyholder benefits                                        29,665           56,970            52,675
     Change in reserves for future policy benefits                        (716)         (16,424)          (23,065)
   Commissions                                                           8,715            4,348             8,928
   Amortization expense                                                 42,909           67,998            73,643
   Interest expense                                                      9,612           10,057            11,704
   Other operating expenses                                             78,481           84,389            91,004
   Restructuring expenses                                                9,914                -                 -
                                                                  ------------     ------------      ------------
     Total benefits and expenses                                       407,068          427,987           446,621
                                                                  ------------     ------------      ------------

   Income before provision for income taxes and
      cumulative effect of a change in accounting principle             16,950           22,440            16,218

Provision for income taxes                                               5,657            7,568             4,744
                                                                  ------------     ------------      ------------

   Income before cumulative effect of a change in
       accounting principle                                             11,293           14,872            11,474

Cumulative effect of a change in accounting
    principle, net of income tax                                           832                -                 -
                                                                  ------------     ------------      ------------

     Net income                                                   $     12,125     $     14,872      $     11,474
                                                                  ============     ============      ============

Net income per common share:
   Income before cumulative effect of a change in
        accounting principle                                      $   1,129.29     $   1,487.20      $   1,147.40
   Cumulative effect of a change in accounting
        principle                                                        83.22                -                 -
                                                                  ------------     ------------      ------------
     Net income                                                   $   1,212.51      $  1,487.20       $  1,147.40
                                                                  ============      ===========       ===========
</TABLE>
               See accompanying notes to consolidated financial statements


<PAGE>


                       Americo Life, Inc. and Subsidiaries

                 Consolidated Statement of Stockholder's Equity
                             (Dollars in thousands)
              For the Years Ended December 31, 2001, 2000 and 1999
<TABLE>

                                                     2001                     2000                     1999
                                                     ----                     ----                     ----

<S>                                        <C>                      <C>                      <C>
Common stock
   Balance at beginning and end of year     $      10                $      10                $      10
                                            ---------                ---------                ---------

Preferred stock
    Balance at beginning of year                    -                        -                        -
    Issuance of shares                        135,000                        -                        -
                                            ---------                ---------                 --------
   Balance at end of year                     135,000                        -                        -
                                            ---------                ---------                ---------

Investment in parent company preferred
   stock
    Balance at beginning of year                    -                        -                        -
    Purchase of parent company preferred
     stock                                  ( 135,000)                       -                        -
                                            ----------               ---------                ---------
   Balance at end of year                    (135,000)                       -                        -
                                            ----------               ---------                ---------

Additional paid-in capital
   Balance at beginning and end of year         3,745                    3,745                    3,745
                                            ---------                ---------                ---------

Accumulated other comprehensive income
   Balance at beginning of year                35,635                   19,159                   60,499
   Change during year                          (4,878)    $  (4,878)    16,476   $  16,476      (41,340)  $ (41,340)
                                            ----------               ---------                ---------
   Balance at end of year                      30,757                   35,635                   19,159
                                            ---------                ---------                ---------

Retained earnings
   Balance at beginning of year               215,272                  202,400                  192,926
   Net income                                  12,125        12,125     14,872      14,872       11,474      11,474
                                                          ---------              ---------                ---------
   Comprehensive income (loss)                            $   7,247              $  31,348                $ (29,866)
                                                          =========              =========                =========
   Dividends                                   (9,601)                  (2,000)                  (2,000)
                                            ---------                ---------                ---------
   Balance at end of year                     217,796                  215,272                  202,400
                                            ---------                ---------                ---------

     Total stockholder's equity             $ 252,308                $ 254,662                $ 225,314
                                            =========                =========                =========
</TABLE>

          See accompanying notes to consolidated financial statements


<PAGE>


                       Americo Life, Inc. and Subsidiaries

                      Consolidated Statement of Cash Flows
                             (Dollars in thousands)
              For the Years Ended December 31, 2001, 2000 and 1999
<TABLE>

                                                                                2001          2000          1999
                                                                                ----          ----          ----
<S>                                                                        <C>           <C>           <C>
Cash flows from operating activities
Net income                                                                  $    12,125   $    14,872   $    11,474
                                                                            -----------   -----------   -----------
Adjustments to reconcile net income to net cash provided (used) by
  operating activities:
   Depreciation and amortization                                                 53,923        73,338        79,033
   Deferred policy acquisition costs                                            (63,432)      (74,481)      (63,511)
   Undistributed earnings of equity subsidiaries                                    882          (568)       (2,728)
   Distributed earnings of equity subsidiaries                                        -             -           240
   Amortization of unrealized investment gains                                   (4,122)       (6,768)       (2,826)
   Provision for deferred income taxes                                           11,107         7,494        (1,002)
   (Increase) decrease in assets:
     Accrued investment income                                                   (2,320)           33            99
     Amounts receivable from reinsurers                                          14,723       130,553        60,215
     Other receivables                                                            5,272         2,487         1,057
     Other assets, net of amortization                                           (2,905)        4,773       (17,615)
   Increase (decrease) in liabilities:
     Reserves for future policy benefits and unearned policy revenues            (1,325)        7,350       (12,124)
     Policyholder account balances                                              (56,152)      (89,471)      (90,370)
     Policy and contract claims                                                   5,457        (5,209)       (7,646)
     Other policyholder funds                                                    38,450        (6,169)       13,424
     Amounts payable to reinsurers                                                  433        (9,693)       20,550
     Federal income taxes payable                                                   (72)          125             -
     Affiliate balances                                                         (10,724)       10,455       (10,795)
     Other liabilities                                                           (1,964)        6,547         6,388
   Change in trading securities                                                 (57,760)        1,879             -
   Net realized (gains) losses on investments                                     1,095         6,573        (4,174)
   Amortization on bonds and mortgage loans                                       1,396         3,214         1,351
   Other changes                                                                 (1,098)       (2,824)       (1,347)
                                                                            ------------  -----------   -----------
   Total adjustments                                                            (69,136)       59,638       (31,781)
                                                                            ------------  -----------   -----------
       Net cash provided (used) by operating activities                         (57,011)       74,510       (20,307)
                                                                            ------------  -----------   -----------



                                                                                                         (Continued)
</TABLE>
           See accompanying notes to consolidated financial statements
<PAGE>


                       Americo Life, Inc. and Subsidiaries

                Consolidated Statement of Cash Flows (Continued)
                             (Dollars in thousands)
              For the Years Ended December 31, 2001, 2000 and 1999
<TABLE>

                                                                                 2001           2000          1999
                                                                                 ----           ----          ----
<S>                                                                        <C>             <C>           <C>
Cash flows from investing activities
   Purchases of fixed maturity investments                                   $(1,129,312)   $  (532,177)  $  (425,122)
   Purchases of equity securities                                                (53,598)      (146,223)     (106,290)
   Purchases of other investments                                                (14,679)       (11,607)      (13,766)
   Mortgage loans originated                                                     (37,644)       (58,086)      (58,299)
   Maturities or redemptions of fixed maturity investments                       257,048         53,166        10,319
   Sales of fixed maturity available for sale investments                        667,924        455,265       346,488
   Sales of fixed maturity held to maturity investments                            4,750         58,574             -
   Sales of equity securities                                                     61,368        130,339       125,627
   Sales of other investments                                                      3,925          1,684             -
   Payment for subsidiaries acquired                                                (182)             -             -
   Transfer of cash on disposition of block of insurance business                      -       (100,000)            -
   Repayments from mortgage loans                                                 19,777         17,066        20,892
   Change in due to broker                                                        42,504        (60,358)        1,608
   Change in policy loans                                                          4,967          2,884           193
                                                                            ------------    -----------   -----------
     Net cash used by investing activities                                      (173,152)      (189,473)      (98,350)
                                                                            -------------   -----------   -----------

Cash flows from financing activities
   Repayments of notes payable                                                    (1,053)        (9,155)      (21,318)
   Receipts credited to policyholder account balances                            407,526        439,199       454,864
   Return of policyholder account balances                                      (224,856)      (325,609)     (258,320)
   Dividends paid                                                                 (2,000)        (2,000)       (2,000)
                                                                            -------------   ------------  ------------
     Net cash provided by financing activities                                   179,617        102,435       173,226
                                                                            ------------    -----------   -----------
Net increase (decrease) in cash and cash equivalents                             (50,546)       (12,528)       54,569
Cash and cash equivalents at beginning of year                                   110,260        122,788        68,219
                                                                            ------------    -----------   -----------
Cash and cash equivalents at end of year                                    $     59,714    $   110,260   $   122,788
                                                                            ============    ===========   ===========

Supplemental disclosures of cash flow information:
Cash paid during year for:
Interest                                                                    $      9,301    $    10,197   $    11,647
Income taxes                                                                       6,899          1,142         3,515

Supplemental schedule of non-cash investing and financing activities:
 Dividend of equity subsidiary to parent                                    $      7,601              -             -
</TABLE>


         See accompanying notes to consolidated financial statements

<PAGE>




                       Americo Life, Inc. and Subsidiaries

                   Notes to Consolidated Financial Statements
                (Dollars in thousands, except per share amounts)


1.       Organization and Summary of Significant Accounting Policies

     Americo Life, Inc. ("the Company") is a holding company for the following
stock life insurance companies, all of which are 100% owned: Americo Financial
Life and Annuity Insurance Company (formerly The College Life Insurance Company
of America) ("Americo Financial"), United Fidelity Life Insurance Company
("United Fidelity"), Great Southern Life Insurance Company ("Great Southern"),
National Farmers Union Life Insurance Company ("National Farmers"), Financial
Assurance Life Insurance Company ("Financial Assurance") and The Ohio State Life
Insurance Company ("Ohio State"), collectively referred to as the Insurance
Companies. Americo Financial owns 100% of Americo Financial Services Inc. and
Pension Consultants and Administrators, Inc., which are agency and third-party
administration operations. The Company is a wholly-owned subsidiary of Financial
Holding Corporation ("FHC").

     All of the Insurance Companies are domiciled in Texas. One or more of the
Insurance Companies is licensed in the District of Columbia and all states
except New York. The above companies comprise an Insurance Company Holding Group
as defined by the laws of the State of Texas and are bound by certain
regulations thereof in the conduct of their business.

Principles of consolidation and basis of presentation

     The consolidated financial statements include the accounts of the Company
and its direct and indirect wholly-owned subsidiaries. The Insurance Companies
maintain their accounts in conformity with accounting practices prescribed or
permitted by state insurance regulatory authorities. In the accompanying
financial statements, such accounts have been adjusted to conform with generally
accepted accounting principles ("GAAP"). All significant intercompany accounts
and transactions have been eliminated in consolidation.

     The preparation of financial statements requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.

Investments

     Fixed maturity investments classified as held to maturity are debt
securities for which the Company has the positive intent and ability to hold to
maturity and are stated at amortized cost with premiums amortized to call dates
and discounts amortized to maturity dates. Fixed maturity investments classified
as trading are stated at market value and the resulting unrealized gains and
losses are recorded in earnings. Marketable equity securities and fixed
maturities available for sale are reported at market value and the resulting
unrealized gains or losses, net of applicable income taxes, are credited or
charged to stockholder's equity. If a decline in the market value of an
individual investment is considered to be other than temporary, the loss is
recorded as a realized investment loss. Gains or losses on sales of securities
are computed using the specific identification method.



<PAGE>


         When the Company recognizes changes in conditions that cause a fixed
maturity investment to be transferred to a different category (e.g. held to
maturity or available for sale), the security is transferred at market value. If
the security is transferred from available for sale to held to maturity, the
related unrealized gain or loss is amortized to investment income over the
remaining life of the security. If the security is transferred from held to
maturity to available for sale, the unrealized gain or loss is included in
stockholder's equity.

     For mortgage-backed securities, the Company anticipates prepayments
utilizing published data when applying the interest method. Periodic adjustments
to securities' carrying values as a result of changes in actual and anticipated
prepayments are credited or charged to net investment income.

     Equity securities, consisting of marketable common and nonredeemable
preferred stocks, are carried at market value. The Company's 50% or less owned
subsidiaries are accounted for using the equity method, under which the
Company's proportionate share of earnings is recorded as a component of net
investment income.

     Mortgage loans on real estate are stated at aggregate unpaid principal
balances, net of unamortized purchase premiums or discounts and less allowances
for estimated losses. Unamortized purchase premiums or discounts are amortized
using the effective yield method over the life of the related loan.

     Policy loans are stated at aggregate unpaid principal balances.

     Investment real estate is stated at cost, less allowances for depreciation
and, as appropriate, provisions for possible losses.

Derivatives

     The Company adopted  Statement of Financial  Accounting  Standards ("SFAS")
No. 133, "Accounting for Derivative  Instruments and Hedging  Activities",  as
amended by SFAS No. 138,  "Accounting for Certain Derivative  Instruments and
Certain Hedging Activities - an Amendment of FASB  Statement No. 133", on
January 1, 2001. In accordance  with the  transition provisions of SFAS No. 133,
the Company recorded a net-of-tax  cumulative-effect-type  gain of $832 in
earnings to record all of its  derivatives  on the balance sheet at fair value.

         The Company's equity-indexed annuity ("EIA") products credit interest
to the policyholder's account balance based on a percentage (the "participation
rate") of the change in external indices over a two year period (the "index
period"). At the end of each index period, a new index period begins using the
then-current account balance and external index value. The Company has the
discretion to change the participation rate at the beginning of each index
period, subject to contractually guaranteed minimums. SFAS No. 133 requires that
each premium deposit be bifurcated between the embedded derivative component and
the host contract component. The embedded derivative component of the Company's
EIA products includes the options issued to the policyholder for the current
index period and for forward-starting periods. The Company records the changes
in the values of the embedded derivatives in current earnings as a component of
policyholder benefits. The host contract accretes interest to a maturity value
over a projected term. The interest accretion of the host contract is included
in interest credited on policyholder funds on the consolidated statement of
income.

     The Company manages its exposure to changes in the fair value of EIA
embedded derivatives by purchasing exchange-traded and over-the-counter indexed
call options and futures contracts on the same external index. Neither these
assets nor the related EIA embedded derivatives are eligible for hedge
accounting treatment under SFAS No. 133. The Company recognizes the change in
fair values of these assets as a component of net investment income.

Cash equivalents

     The Company considers all highly liquid financial instruments with an
original maturity of three months or less to be cash equivalents.



<PAGE>


Deferred policy acquisition costs and cost of business acquired

     The costs of new business produced, principally commissions, certain policy
issue and underwriting expenses and certain variable agency expenses, are
deferred. The cost of business acquired represents the amount of purchase price
assigned to the value of the policies at acquisition. The cost of business
acquired asset is no greater than the actuarially determined present value of
future profits of the policies purchased. For traditional life products, these
costs are amortized in proportion to premium revenues over the premium-paying
period of related policies using assumptions consistent with those used in
computing benefit reserves. For universal life, interest-sensitive and
investment products, these costs are amortized in relation to the present value,
using the current and projected credited interest rate, of expected gross
profits of the policies over the anticipated coverage period.

     Retrospective adjustment of these amounts are made annually upon the
revision of estimates of current or future gross profits on universal life-type
and annuity products to be realized from a group of policies. Recoverability of
deferred policy acquisition costs and the cost of business acquired is evaluated
annually by comparing the current estimate of future profits to the unamortized
asset balances. The revision of estimates of future gross profits
increased/(decreased) income related to deferred policy acquisition costs before
provision for income taxes by $(2,998), $13,677 and $985 for the years ended
December 31, 2001, 2000 and 1999, respectively. The revision of estimates of
future gross profits increased (decreased) income related to the cost of
business acquired before provision for income taxes by $21,410, $(12,653) and
$(457) for the years ended December 31, 2001, 2000 and 1999, respectively. The
revisions made in 2001 to estimated gross profits primarily consisted of changes
in estimated policy revenues and benefits paid to policyholder account balances.
Certain of these revisions resulted from the anticipated impact of settling
litigation in which the Company is the defendant.

     Anticipated investment returns, including realized gains and losses, from
the investment of policyholder balances are considered in determining the
amortization of deferred policy acquisition costs, the cost of business acquired
and unearned policy revenues. When fixed maturities are stated at market value
an adjustment is made to the deferred policy acquisition costs, the cost of
business acquired and unearned policy revenues equal to the change in
amortization that would have been recorded if those fixed maturities had been
sold at their fair value and the proceeds reinvested at current yields. This
adjustment is recorded net of income taxes directly to the accumulated other
comprehensive income component of stockholder's equity.

Universal life-type and annuity products

     Policyholder account balances of universal life-type, interest-sensitive
and annuity products represent accumulated contract values, without reduction
for potential surrender charges and deferred front-end contract charges that are
amortized over the term of the policies. Revenue for universal life-type and
other interest-sensitive products is principally comprised of insurance and
policy administration fees and surrender charges, as well as amortization of
deferred front-end contract charges. Benefits and claims are charged to expense
in the period incurred, net of related accumulated contract values released.
Interest on accumulated contract values is credited to contracts as earned.
Crediting rates for universal life-type and annuity products ranged from 3% to
6.05% at December 31, 2001. The Company also issues universal life-type and
annuity products for which interest credited is based upon a participation rate,
load and change in value of a stated equity-based index.

Traditional life insurance products

     Traditional life insurance products include whole life insurance and term
life insurance. Reserves for future policy benefits are estimated using a net
level premium method based upon historical experience of investment yields,
mortality and withdrawals, including provisions for possible adverse deviation.
Investment yield assumptions are based on historical rates ranging from 6.5% to
9.0%. Mortality assumptions are based on the 1975-1980 Select and Ultimate Basic
Table with certain modifications including underwriting classifications and year
of issue. Withdrawal assumptions for all products are estimated based on the
Insurance Companies' experience. Additions to these reserves are required when
their balances, in addition to future net cash flows including investment
income, are insufficient to cover future benefits and expenses. Premiums for
these products are recognized as revenue when due. Traditional life insurance
benefits and claims are charged to expense in the period incurred.
<PAGE>
Reinsurance

     Premiums and expenses include amounts related to reinsurance assumed and
are stated net of amounts ceded. Reinsurance receivables and prepaid reinsurance
premiums are reported as assets and are recognized in a manner consistent with
the liabilities related to the underlying reinsured contracts.

Participating policies

     Participating life insurance policies represent approximately 1.3%, 1.4%
and 1.2% of the ordinary life insurance in force at December 31, 2001, 2000 and
1999, respectively. Premium income related to participating life insurance
policies represents 4.3%, 4.0% and 3.8% of premiums and policy revenues for the
years 2001, 2000 and 1999, respectively. The dividends paid and accrued are
calculated in accordance with the terms of the individual policy provisions and
the dividend schedule as reviewed and approved annually by the Board of
Directors.

Property and equipment

     Company-occupied property, data processing equipment and furniture and
office equipment, included in other assets, are stated at cost, less accumulated
depreciation, of $6,426 and $10,307 at December 31, 2001 and 2000, respectively.
Depreciation is computed on a straight-line basis for financial reporting
purposes using estimated useful lives of three to 30 years. Depreciation expense
was $4,430, $5,339 and $5,358 for the years ended December 31, 2001, 2000 and
1999, respectively.

Restructuring Expenses

     During 2001, the Company made certain changes to its administrative and
sales operations involved in the sale of insurance products to the tax-qualified
market. Included in these changes was the Company's decision to relocate
operations located in Austin to existing operations located elsewhere.
Additionally, the Company decided to cease operations of an entity that
previously provided administration for retirement and cafeteria plans to school
districts and other clients. Among the factors leading to these decisions was
the settlement of litigation in which the Company had been a defendant. The
relocation of the remaining Austin operations will be completed in May 2002. In
connection with these business decisions, the Company recorded a restructuring
loss of $9,914 consisting of several components. The Company determined that a
portion of the goodwill related to these entities had become impaired. Based
upon the Company's best estimate of the future results of operations of these
entities, the goodwill asset was reduced by $4,696. The restructuring loss
includes $1,457 representing the unamortized cost of software developed for use
by these entities and exit costs of $889 for expected severance payments and for
lease payments on the Austin office space beyond the date of the relocation. The
remaining portion of the loss consists of the operating expenses of the third
party administrator.

Income taxes

     The provision for income taxes includes deferred taxes arising from
temporary differences between the tax and financial reporting basis of assets
and liabilities. This liability method of accounting for income taxes also
requires the Company to reflect the effect of a tax rate change on accumulated
deferred income taxes in income for the period in which the change is enacted.

Net income per common share

     Net income per common share is calculated by dividing the appropriate
income item by the average number of shares of common stock outstanding during
the period. There were no common share equivalents outstanding during 2001, 2000
or 1999.

Reclassifications

     Previously reported amounts for prior years have in some instances been
reclassified to conform to the current year presentation.
<PAGE>
New Pronouncements

     In July 2001, the Financial  Accounting  Standards  Board ("FASB")  issued
SFAS No. 141 "Business  Combinations"  and SFAS No. 142 "Goodwill and Other
Intangible  Assets." SFAS No. 141 supersedes  previously  issued guidance on
accounting for business  combinations. SFAS No. 141 eliminates the  pooling-of-
interests  method of accounting for business combinations initiated after July
1, 2001 and also changes the criteria used to recognize intangible assets apart
from goodwill.

     SFAS No. 142  supersedes the current  accounting  guidance for goodwill and
intangible assets.  Under SFAS No. 142,  goodwill and indefinite-lived
intangible assets will no longer be amortized  but will be reviewed for
impairment.  Intangible assets with finite lives will  continue to be amortized
over their  useful  lives.  The  amortization  provisions  of SFAS No. 142 apply
to goodwill and intangible  assets  acquired  after June 30, 2001.  For all
other  goodwill and  intangible  assets,  the  amortization  provisions are
effective  upon  adoption of SFAS No. 142. The  impairment  provisions of SFAS
No. 142 are  effective  upon adoption of the  statement. Adoption of SFAS No.
142 is required as of the  beginning  of fiscal years beginning  after December
15, 2001.  The Company does not expect that adoption of SFAS No. 142 will have
a significant effect on its consolidated financial position or results of
operations.

     The FASB has also recently issued SFAS No. 143 "Accounting for Asset
Retirement Obligations" and SFAS No. 144 "Accounting for Impairment or Disposal
of Long-Lived Assets." SFAS No. 143 requires that obligations associated with
the retirement of a tangible long-lived asset be recorded as a liability when
those obligations are incurred. The liability is initially measured at fair
value and the cost is capitalized by increasing the carrying amount of the
related long-lived asset. SFAS No. 143 will be effective for financial
statements for fiscal years beginning after June 15, 2002. The Company does not
own long-lived assets of the type that will generally create retirement
obligations. Therefore, adoption of SFAS No. 143 will not affect the Company's
consolidated financial statements.

     SFAS No. 144 provides guidance on the accounting for the impairment or
disposal of long-lived assets. SFAS No. 144 supersedes SFAS No. 121 "Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed
Of" and amends Accounting Principles Board Opinion No. 30 (APB No. 30)
"Reporting Results of Operations - Reporting the Effects of Disposal of a
Segment of a Business." SFAS No. 144 requires that long-lived assets that are to
be disposed of by sale be measured at the lower of book value or fair value less
cost to sell. Additionally, entities are no longer required to include under
"discontinued operations" operating losses that have not yet occurred. SFAS No.
144 is effective for financial statements issued for fiscal years beginning
after December 15, 2001 and, generally, its provisions are to be applied
prospectively. The Company does not expect that adoption of SFAS No. 144 will
have a significant effect on its consolidated financial position or results of
operations.

     The American Institute of Certified Public Accountants (AICPA) recently
issued Statement of Position No. 01-06 (SOP 01-06) "Accounting by Certain
Entities (Including Entities with Trade Receivables) That Lend to or Finance the
Activities of Others." The guidance in SOP 01-06 relating to financing and
lending activities is explicitly applicable to insurance companies. SOP 01-06
reconciles and conforms the accounting and financial reporting guidance
presently contained in other accounting guidance. SOP 01-06 is effective for
financial statements issued for fiscal years beginning after December 15, 2001.
The Company's accounting practices for its lending activities are already
consistent with the guidance contained in SOP 01-06. Therefore, adoption of SOP
01-06 will not have a significant effect on the Company's financial statements.

2.       Fair values of financial instruments

     The following estimated fair value disclosures are limited to the
reasonable estimates of the fair value of only the Company's financial
instruments. The Company does not anticipate that any significant assets will be
disposed of or that any significant liabilities would be settled at these
estimated fair values.

     Investment securities: The estimated fair values of fixed maturity
securities are based on quoted market prices where available. For fixed maturity
securities not actively traded, fair values are estimated using values obtained
from independent pricing services. In the case of private placements, fair
values are determined using market values of comparable securities. The
estimated fair values of equity securities are based on quoted market prices.
<PAGE>

     Mortgage loans: The fair values of mortgage loans are estimated using
discounted cash flow analyses and interest rates being offered for similar loans
to borrowers with similar credit ratings.

     Policy loans: Policy loans are generally issued with coupon rates below
market rates and are considered early payment of the life benefit. As such, the
carrying amount of these financial instruments is a reasonable estimate of their
fair value.

     Derivative instruments: The estimated fair values of derivative instruments
are based on quoted market prices where available.

     Other invested assets: The fair value of the note receivable from PFS
Holding Company ("PFSH"), a wholly-owned subsidiary of FHC, is estimated by
discounting future cash flows at current market rates.

     Cash and cash equivalents: The carrying value of these instruments
approximates fair value.

     Annuities:  The fair values of the Company's annuities are estimated using
the current cash  surrender  value for the Company's annuity contracts.

     Notes payable: The fair value of the Company's senior subordinated notes
equals the quoted market price at the reporting date. The fair value of the
Company's other notes payable was calculated using a discounted interest rate
that reflects prevailing market rates.

     The estimated fair values of the Company's financial instruments at
December 31 are as follows:
<TABLE>

                                                                2001                                2000
                                                    ------------------------------     -------------------------------

                                                      Carrying          Fair              Carrying         Fair
                                                       Amount          Value               Amount          Value
<S>                                                  <C>            <C>                 <C>             <C>
Financial assets:
   Fixed maturities held to maturity                  $   694,889    $   712,314         $   742,618     $   737,496
   Fixed maturities available for sale                  1,321,040      1,321,040           1,032,937       1,032,937
   Fixed maturities trading                                57,760         57,760                   -               -
   Equity securities                                       74,531         74,531             104,771         104,771
   Mortgage loans                                         269,910        268,409             268,902         269,979
   Policy loans                                           189,683        189,683             194,651         194,651
   Derivative instruments                                  10,947         10,947               2,214           2,214
   Other invested assets                                   20,000         20,325              10,000          10,052
   Cash and cash equivalents                               59,714         59,714             110,262         110,262
Financial liabilities:
   Annuities                                            1,220,044      1,095,879           1,147,750       1,037,566
   Notes payable                                          101,547         98,802             102,297          99,552
</TABLE>


3.   Change in Subsidiaries

     In October 1998, the Company entered into a series of transactions with the
individual owning the 50% of College Insurance Group, Inc. ("CIG") not owned by
the Company. The purpose of the transactions was to consolidate all of the
activities in the asset accumulation markets conducted by CIG and other entities
owned 100% by the individual with those of the Company. Specifically, the
Company acquired the other 50% of CIG for $6,236 and acquired the stock or
assets of various marketing entities wholly-owned by the individual for $9,518
plus contingent consideration of up to an additional $5,000 plus interest based
on achieving certain sales production levels. Contingent consideration of $1,000
plus interest was paid during both 2001 and 2000. In addition, the Company
recaptured all of the insurance liabilities that were previously ceded to an
entity owned by the individual. The Company paid $2,580 and $2,624 in 2000 and
1999, respectively, to recapture these liabilities.


<PAGE>


4.   Investments

Fixed Maturities

     The amortized cost of investments in fixed maturities, the cost of equity
securities and the estimated market values of such investments by category of
securities, are as follows:
<TABLE>

                                                                               December 31, 2001
                                                       ------------------------------------------------------------------

                                                                           Gross              Gross         Estimated
                                                         Amortized       Unrealized         Unrealized        Market
                                                            Cost           Gains              Losses          Value
<S>                                                    <C>             <C>                <C>             <C>
Held to maturity:
   U.S. Treasury and government securities              $      2,297    $        119       $         (3)   $      2,413
   Public utility securities                                  14,590             841                  -          15,431
   Corporate securities                                      476,606          15,463             (4,875)        487,194
   Asset-backed securities                                    12,590             359                  -          12,949
   Mortgage-backed pass-through securities                    25,503             793                (17)         26,279
   Collateralized mortgage obligations                       163,303           5,099               (354)        168,048
                                                       -------------   -------------      --------------  -------------
                                                             694,889          22,674             (5,249)        712,314
                                                       -------------   -------------      --------------  -------------
Available for sale:
   U.S. Treasury and government securities                    18,785             944                  -          19,729
   Public utility securities                                   6,927               -               (386)          6,541
   Corporate securities                                      886,862          23,306            (16,159)        894,009
   Asset-backed securities                                   167,528           2,912             (4,051)        166,389
   Mortgage-backed pass-through securities                   117,150           5,390                (20)        122,520
   Collateralized mortgage obligations                       111,521           1,882             (1,551)        111,852
                                                       -------------   -------------      --------------  -------------
                                                           1,308,773          34,434            (22,167)      1,321,040
                                                       -------------   -------------      --------------  -------------
Trading:
   Corporate securities                                       57,747             588               (575)         57,760
                                                       -------------   -------------      --------------  -------------
                                                              57,747             588               (575)         57,760
                                                       -------------   -------------      --------------  -------------
     Subtotal, all fixed maturities                        2,061,409          57,696            (27,991)      2,091,114
                                                       -------------   -------------      --------------  -------------
Equity securities                                             48,598          29,727             (3,794)         74,531
                                                       -------------   -------------      --------------  -------------
     Total fixed maturities and equity securities       $  2,110,007    $     87,423       $    (31,785)   $  2,165,645
                                                       =============   =============      ==============  =============
</TABLE>
<TABLE>

                                                                               December 31, 2000
                                                       ------------------------------------------------------------------

                                                                           Gross              Gross         Estimated
                                                         Amortized       Unrealized         Unrealized        Market
                                                            Cost           Gains              Losses          Value
<S>                                                    <C>             <C>                <C>             <C>
Held to maturity:
   U.S. Treasury and government securities              $      2,333    $        104       $          -    $      2,437
   Public utility securities                                  16,616             212               (217)         16,611
   Corporate securities                                      505,393           8,392            (13,969)        499,816
   Asset-backed securities                                    15,388             261                  -          15,649
   Mortgage-backed pass-through securities                    28,648             614               (168)         29,094
   Collateralized mortgage obligations                       174,240           1,511             (1,862)        173,889
                                                        ------------    ------------       ------------    ------------
                                                             742,618          11,094            (16,216)        737,496
                                                        ------------    ------------       ------------    ------------
Available for sale:
   U.S. Treasury and government securities                    23,808             838                  -          24,646
   Public utility securities                                   7,068               -               (451)          6,617
   Corporate securities                                      737,813           9,389            (33,745)        713,457
   Asset-backed securities                                   128,573           2,991             (1,260)        130,304
   Mortgage-backed pass-through securities                   111,503           3,896               (104)        115,295
   Collateralized mortgage obligations                        41,656           1,235               (273)         42,618
                                                        ------------    ------------       ------------    ------------
                                                           1,050,421          18,349            (35,833)      1,032,937
                                                        ------------    ------------       ------------    ------------
     Subtotal, all fixed maturities                        1,793,039          29,443            (52,049)      1,770,433
                                                        ------------    ------------       ------------    ------------
Equity securities                                             57,920          49,515             (2,664)        104,771
                                                        ------------    ------------       ------------    ------------
     Total fixed maturities and equity  securities      $  1,850,959    $     78,958       $    (54,713)   $  1,875,204
                                                        ============    ============       ============    ============
</TABLE>


     The amortized cost and estimated market value of mortgage-backed securities
by category at December 31, 2001 are as follows:
<TABLE>

                                                                Held to Maturity              Available for Sale
                                                           ---------------------------    ---------------------------

                                                                          Estimated                      Estimated
                                                            Amortized    Market Value      Amortized    Market Value
                                                               Cost                           Cost

<S>                                                         <C>           <C>              <C>           <C>
Pass-through agency securities                              $   25,503    $   26,279       $  117,150    $  122,520

Collateralized mortgage obligations:
   Sequential class                                             54,107        55,639           96,721        96,726
   Planned amortization class                                   33,708        34,613                -             -
   Very accurately defined maturity                             68,068        70,156            6,805         6,792
   Other                                                         7,420         7,640            7,995         8,334
                                                            ----------    ----------       ----------    ----------
                                                               163,303       168,048          111,521       111,852
                                                            ----------    ----------       ----------    ----------
     Total securities                                       $  188,806    $  194,327       $  228,671    $  234,372
                                                            ==========    ==========       ==========    ==========
</TABLE>


     The amortized cost and estimated market value of fixed maturities which are
held to maturity and available for sale at December 31, 2001, by contractual
maturity, are shown below. Expected maturities will differ from contractual
maturities because borrowers may have the right to call or prepay obligations
with or without penalties.
<TABLE>

                                                      Fixed Maturities                     Fixed Maturities
                                                      Held to Maturity                    Available for Sale
                                                -----------------------------        ------------------------------

                                                                 Estimated                            Estimated
                                                  Amortized       Market               Amortized        Market
                                                    Cost           Value                 Cost           Value

<S>                                             <C>            <C>                   <C>            <C>
Due in one year or less                         $    30,496    $    31,117           $    22,645    $    22,597
Due after one year through five years               167,506        172,954                73,390         74,075
Due after five years through ten years              182,162        186,391               320,487        325,166
Due after ten years                                 125,919        127,525               663,580        664,830
Mortgage-backed securities                          188,806        194,327               228,671        234,372
                                                 ----------     ----------            ----------     ----------
                                                $   694,889    $   712,314            $1,308,773    $ 1,321,040
                                                ===========    ===========            ==========    ===========
</TABLE>

     At December 31, 2001, the Company held below investment grade (S&P rating
below BBB-) corporate debt securities with an aggregate carrying value of
$83,072 and market value of $82,819. At December 31, 2000, the Company held
below investment grade corporate debt securities with an aggregate carrying
value of $62,367 and market value of $59,201. These holdings amounted to 1.9%
and 1.5% of the Company's total assets at December 31, 2001 and 2000,
respectively.

     Fixed maturities with an amortized book value of $30,523 and $32,179 were
on deposit with insurance regulatory agencies of certain states at December 31,
2001 and 2000, respectively.

     The Company owns two $10,000, senior subordinated notes ("the notes")
issued by PFSH, with interest rates of 9.25% and 9.35% which mature in September
2004 and March 2006, respectively. The notes are included in other invested
assets on the Company's consolidated balance sheet.

     At December 31, 2001, the Company owned equity securities of DST, Inc. with
an aggregate carrying value and market value of $34,646, which exceeded 10% of
the Company's total stockholder's equity.


<PAGE>



Mortgage loans on real estate

     At December 31, mortgage loans on real estate consisted of:
<TABLE>
                                                                                        2001              2000
                                                                                        ----              ----

       <S>                                                                          <C>              <C>
        Mortgage loan principal                                                      $  269,910       $  269,352
        Net unamortized purchase discount                                                     -             (150)
        Allowance for losses                                                                  -             (300)
                                                                                     ----------       ----------
           Net mortgage loans                                                        $  269,910       $  268,902
                                                                                     ==========       ==========
</TABLE>

     The Company's mortgage loans on real estate are diversified by property
type, location and loan size and are collateralized by the related properties.
At December 31, 2001, mortgage loans on real estate were concentrated in the
following property types:
<TABLE>
                                                                                                          % of
                                                                                        2001           Portfolio

       <S>                                                                          <C>                   <C>
        Property type:
           Commercial
             Multi-family apartments                                                 $   63,990            23.7
             Industrial/Warehouses                                                       75,716            28.1
             Office buildings                                                            70,086            26.0
             Retail space                                                                28,698            10.6
             Other                                                                       30,111            11.1
           Residential                                                                    1,309             0.5
                                                                                     ----------           -----
             Total                                                                   $  269,910           100.0
                                                                                     ==========           =====
</TABLE>

     At December 31, 2001, the following states had a concentration of mortgage
loans aggregating more than 10% of the Company's mortgage loans: Missouri -
$49,893 and Texas - $36,200.

Investment in equity subsidiaries

     The following table presents combined summarized financial information on a
proportionate basis of the Company's equity affiliates. Amounts presented
include the accounts of the Company's equity subsidiaries, Argus Health Systems
(Argus), Hereford LLP and a hotel joint venture. The Company dividended its 50%
interest in Argus to FHC on December 1, 2001. The dividend consisted of the
carrying value of Argus of $6,911 and unamortized goodwill of $690. The results
of operations of Argus are included in the amounts below through the date of the
dividend.
<TABLE>

                                                                             2001          2000          1999
                                                                             ----          ----          ----

       <S>                                                              <C>           <C>           <C>
        Current assets                                                   $   1,803     $   7,854     $   7,382
        Noncurrent assets                                                   23,080        21,291        17,466
        Current liabilities                                                    870         4,236         3,324
        Noncurrent liabilities                                              18,552        12,362         9,383
        Net revenues                                                        28,522        26,815        27,864
        Expenses applicable to net revenues                                 28,789        25,912        23,688
        Income from continuing operations                                     (267)          903         4,176
        Net income                                                            (115)          411         2,776
</TABLE>

     In 1999, the Company received a cash distribution from Hereford LLP of
$240.


<PAGE>


Net investment income

     Net investment income for the years ended December 31 is comprised of the
following:
<TABLE>

                                                                                2001          2000          1999
                                                                                ----          ----          ----

<S>                                                                         <C>           <C>           <C>
Fixed maturities                                                            $   148,399   $   136,618   $   126,739
Equity securities                                                                   558           844         1,328
Equity in earnings of equity subsidiaries                                          (920)          507         2,776
Mortgage loans on real estate                                                    20,702        19,434        16,883
Policy loans                                                                     10,172        11,610        12,572
Reinsurance funds held by reinsurer                                              48,699        54,732        60,342
Derivatives                                                                     (19,142)            -             -
Cash, short-term investments and other                                            8,319         7,852        12,431
                                                                            -----------   -----------   -----------
         Total investment income                                                216,787       231,597       233,071
Less investment expenses                                                         (5,706)       (6,080)       (5,449)
                                                                            -----------   -----------   -----------
         Net investment income                                              $   211,081   $   225,517   $   227,622
                                                                            ===========   ===========   ===========
</TABLE>

Realized gains and losses

     Realized gains and losses from the sales and other redemptions of
investments for the years ended December 31 are as follows:
<TABLE>

                                                                                2001          2000          1999
                                                                                ----          ----          ----
<S>                                                                        <C>           <C>           <C>
Fixed maturity securities:
   Held to maturity:
     Realized gains                                                         $         -   $       457   $         -
     Realized losses                                                               (469)       (7,909)            -
   Available for sale:
     Realized gains                                                              42,011         7,419         3,199
     Realized losses                                                            (48,402)      (11,385)         (592)
Equity securities:
   Realized gains                                                                17,548        24,404        14,391
   Realized losses                                                              (12,068)      (20,095)      (13,032)
Other investments:
   Realized gains                                                                 2,147         1,480           276
   Realized losses                                                               (1,862)         (944)          (68)
                                                                            -----------   -----------   -----------
Net realized investment gains (losses)                                      $    (1,095)  $    (6,573)  $     4,174
                                                                            ============  ============  ===========
</TABLE>

     Certain circumstances during 2001 and 2000 caused the Company to change its
intent to hold specific securities to maturity. Due to evidence of a significant
deterioration in an issuer's creditworthiness, $5,219 and $9,256 of
held-to-maturity securities were sold in 2001 and 2000, respectively. These
sales resulted in realized losses of $469 and $7,256, respectively. Also, the
2000 disposition of a block of life insurance business resulted in the sale of
held-to-maturity securities to maintain the Company's existing interest rate
risk position. Securities totaling $58,141 were sold resulting in a realized
loss of $196.


<PAGE>


     Following are the components of net unrealized investment gains as of
December 31:
<TABLE>

                                                                                              2001          2000
                                                                                              ----          ----
<S>                                                                                      <C>           <C>
Investments carried at amortized cost:
   Fixed maturities available for sale                                                    $     9,966   $   (19,347)
   Fixed maturities reclassified from available for sale to held to maturity                   22,590        26,712
Investments carried at estimated fair value:
   Equity securities                                                                           25,939        46,752
Effect on other balance sheet accounts                                                        (12,391)         (509)
Deferred income taxes                                                                         (15,347)      (17,973)
                                                                                          ------------  -----------
     Net unrealized investment gains                                                      $    30,757   $    35,635
                                                                                          ===========   ===========
</TABLE>

     In November 1995, the FASB issued "A Guide to Implementation of Statement
115 on Accounting for Certain Investments in Debt and Equity Securities" ("the
Guide") which, among other things, provided entities with a one-time opportunity
to transfer some or all securities from held to maturity. In December 1995, the
Company transferred fixed maturity securities with an amortized book value of
$195,207 and a market value of $198,329 out of the held to maturity category
into the available for sale category. Additionally, the Company transferred
fixed maturity securities with an amortized book value of $169,439 and a market
value of $178,883 out of the available for sale category into the held to
maturity category. In 1993, the Company transferred securities from the
available for sale category to the held to maturity category. The net unrealized
gains of $22,590 and $26,712 at December 31, 2001 and 2000, respectively,
relating to these investments transferred to held to maturity are being
amortized into income using the effective yield method over the lives of the
related securities.

     The components of other comprehensive income are as follows:
<TABLE>

                                                                      Amounts           Income       Amounts Net of
                                                                    Before Tax          Taxes              Tax
2001

<S>                                                                 <C>              <C>               <C>
Unrealized holding losses arising during period                     $    (9,052)     $     3,168       $    (5,884)
Reclassification adjustments for losses realized
  in net income                                                           1,548             (542)            1,006
                                                                    -----------      ------------      -----------
Other comprehensive income                                          $    (7,504)     $     2,626       $    (4,878)
                                                                    ============     ===========       ============

2000

Unrealized holding gains arising during period                      $    25,555      $    (8,944)      $    16,611
Reclassification adjustments for gains realized
  in net income                                                            (207)              72              (135)
                                                                    -----------      -----------       -----------
Other comprehensive income                                          $    25,348      $    (8,872)      $    16,476
                                                                    ===========      ===========       ===========

1999

Unrealized holding losses arising during period                     $   (60,535)     $    21,188       $   (39,347)
Reclassification adjustments for gains realized
  in net income                                                          (3,066)           1,073            (1,993)
                                                                    -----------      -----------       -----------
Other comprehensive income                                          $   (63,601)     $    22,261       $   (41,340)
                                                                    ===========      ===========       ===========
</TABLE>

         The carrying value of investments that were non-income producing during
the three year period ended December 31, 2001 was not material to the Company's
consolidated financial position.
<PAGE>

5.       Deferred Policy Acquisition Costs and Cost of Business Acquired

     The balances of and changes in deferred policy acquisition costs and the
cost of business acquired as of and for the three years ended December 31, are
as follows:
<TABLE>

                                                                                2001          2000          1999
                                                                                ----          ----          ----

<S>                                                                        <C>           <C>           <C>
Deferred policy acquisition costs:
  Balance, beginning of year                                                $   228,679   $   212,860   $   131,574
  Capitalization of expenses                                                     63,407        76,032        64,813
  Disposition of insurance business                                                   -       (22,893)            -
  Interest accretion                                                             12,824        11,062         9,290
  Amortization                                                                  (46,290)      (25,241)      (44,667)
  Amounts related to fair value adjustment of fixed maturity securities         (16,450)      (23,141)       51,850
                                                                            ------------  ------------  -----------
  Balance, end of year                                                      $   242,170   $   228,679   $   212,860
                                                                            ===========   ===========   ===========


Cost of business acquired:
  Balance, beginning of year                                                $   166,458   $   219,490   $   247,125
  Additions                                                                           -             -           425
  Interest accretion                                                              8,461        10,361        12,356
  Amortization                                                                  (23,633)      (59,014)      (50,283)
  Amounts related to fair value adjustment of fixed maturity securities          (1,607)       (4,379)        9,867
                                                                            ------------  ------------  -----------
  Balance, end of year                                                      $   149,679   $   166,458   $   219,490
                                                                            ===========   ===========   ===========
</TABLE>


     The estimated amortization and interest accretion of the cost of business
acquired for the five years ending December 31, 2006 are as follows:
<TABLE>

                                                                                 Interest           Estimated
                                                           Amortization          Accretion         Net Decrease

        <S>                                                <C>                <C>                  <C>
         2002                                               $   29,800         $    7,657           $   22,143
         2003                                                   25,829              6,586               19,243
         2004                                                   20,215              5,703               14,512
         2005                                                   16,713              5,005               11,708
         2006                                                   14,352              4,427                9,925
</TABLE>


6.   Insurance Liabilities and Reinsurance

     Insurance liabilities at December 31, consist of the following:
<TABLE>

                                                                                            2001           2000
                                                                                            ----           ----
<S>                                                                                   <C>             <C>
Policyholder account balances:
   Universal life                                                                      $  1,509,821    $  1,475,997
   Annuities                                                                              1,220,044       1,147,750
                                                                                       ------------    ------------
                                                                                       $  2,729,865    $  2,623,747
                                                                                       ============    ============


Reserves for future policy benefits:
   Traditional life                                                                    $    794,064    $    804,105
   Accident and health                                                                        2,295           2,433
   Supplementary contracts                                                                   14,996          13,405
                                                                                       ------------    ------------
                                                                                       $    811,355    $    819,943
                                                                                       ============    ============
</TABLE>

     At December 31, 2001, approximately 92% of the annuity account balances of
the Insurance Companies are subject to surrender charges upon early withdrawal.
<PAGE>

     At December 31, 2001, the total liability for EIA products, included in
policyholder account balances on the consolidated balance sheet, was $354,957.
The change in fair value of the derivatives embedded in the equity-indexed
annuities was a decrease of $22,245 for the year ended December 31, 2001.

     The Insurance Companies cede and assume reinsurance with unaffiliated
companies. The maximum portion of the risk retained on the life of any
individual is $350.

     The Company is party to agreements which coinsure 100% of the Ohio State
and Investors Guaranty policies and the policies of two other blocks of business
to unaffiliated reinsurers (Reinsurers). The Company is also party to agreements
with the Reinsurers to reinsure certain risks on the same insurance policies to
Americo Financial. These agreements effectively transfer 30% of the profits of
the Ohio State and Investors Guaranty policies to the Reinsurers. The agreements
provide that the assets and insurance liabilities related to the reinsured
policies are to be retained by the Reinsurers. The assets retained by the
Reinsurers are held in an escrow account for the benefit of Americo Financial.

     These various agreements are collectively referred to as the "Reinsurance
Agreements". The Company accounts for the Reinsurance Agreements by recording
the direct and assumed insurance liabilities and amounts receivable from
Reinsurers equal to the assets held by the Reinsurers. Premiums and policy
revenues and policyholder benefits from the reinsured policies are included in
the Company's statement of income. Interest income earned on the assets held by
the Reinsurers is recorded as investment income.

     At December 31, the amounts receivable from reinsurers, the cost of
business acquired and the insurance liabilities related to the Reinsurance
Agreements included on the Company's consolidated balance sheet are as follows:
<TABLE>

                                                                                         2001              2000
                                                                                         ----              ----

<S>                                                                                  <C>              <C>
Amounts receivable from reinsurers                                                   $    878,431     $    912,166
Cost of business acquired                                                                  77,628           95,771
Insurance liabilities                                                                     936,432          991,352
</TABLE>

     The Reinsurers will receive a portion of statutory profits from the
reinsured policies until the Reinsurers have recovered the initial ceding
commission. Upon termination of the Reinsurance Agreements, Americo Financial is
required to reimburse the Reinsurers for the amount of the unrecovered ceding
commission.

    Amounts receivable from reinsurers consists of the following at December 31:
<TABLE>

                                                                                         2001              2000
                                                                                         ----              ----

<S>                                                                                 <C>              <C>
Amounts recoverable for ceded future policy benefits                                $   1,094,041    $   1,139,684
Unrecovered ceding commission                                                             (58,001)         (79,186)
Amounts recoverable on ceded policy and contract claims                                    21,477           14,709
Amounts recoverable on paid losses                                                          3,428            2,883
Other                                                                                      64,641           61,583
                                                                                    -------------    -------------
                                                                                    $   1,125,586    $   1,139,673
                                                                                    =============    =============
</TABLE>

     Amounts receivable from reinsurers includes $16,585 and $16,375 from
another unrelated insurance company at December 31, 2001 and 2000, respectively.

     Reinsurance contracts do not relieve the Company from its obligation to
policyholders. Failure of reinsurers to honor their obligations would result in
losses to the Company. The Company evaluates the financial condition of its
reinsurers and monitors concentrations of credit risk arising from activities or
economic characteristics of the reinsurers to minimize its exposure to
significant losses from reinsurer insolvencies. At December 31, 2001, no
allowance has been established as all amounts are deemed collectible.
<PAGE>


     Premiums ceded under reinsurance agreements were $60,443, $68,124 and
$49,905 for the years ended December 31, 2001, 2000 and 1999, respectively.
Reinsurance recoveries netted against other policyholder benefits totaled
$46,551, $57,307 and $55,494 for the years ended December 31, 2001, 2000 and
1999, respectively. The Insurance Companies are liable for reinsurance ceded to
other companies in the event the reinsurers are unable to pay their portion of
the policy benefits.

     Certain of the Insurance Companies have ceded blocks of insurance under
financial reinsurance treaties to provide funds for acquisitions and other
purposes. These reinsurance transactions represent financial arrangements under
generally accepted accounting principles, and accordingly, are not reflected in
the accompanying financial statements, except for the associated risk fees. For
statutory accounting purposes, these financial reinsurance transactions provide
a reserve credit which increases statutory surplus.

     In May 2000, the Company entered into an agreement to permanently reinsure
a block of payroll-deduction life insurance business to an unaffiliated company
on an indemnity coinsurance basis using an effective date of January 1, 2000.
However, the policy liabilities remain as direct liabilities to the Company in
the accompanying consolidated financial statements. As of the effective date,
liabilities associated with these policies totaled $138.5 million. Under the
reinsurance agreement, the Company transferred cash assets totaling $100.0
million and miscellaneous assets totaling $17.1 million to the unaffiliated
reinsurer. In addition, the Company removed deferred policy acquisition costs
totaling $20.3 million from its consolidated financial statements in conjunction
with this disposition. In order to fund the cash transfer, the Company sold
fixed maturity held to maturity investments with an amortized cost of $54.6
million and realized net investment losses of $0.3 million on those sales. For a
period of at least three years, the Company will continue to service these
policies for a fee paid by the reinsurer. This transaction has no significant
effect on the Company's consolidated financial position or results of
operations. Amounts receivable from this reinsurer related to this agreement
totaled $138.2 million and $134.7 million at December 31, 2001 and 2000,
respectively.

7.       Notes Payable

     Notes payable at December 31, are comprised of the following:
<TABLE>

                                                                                           2001           2000
                                                                                           ----           ----

<S>                                                                                   <C>            <C>
Senior subordinated notes bearing interest at 9.25%, due 2005                          $    91,500    $    91,500
Unsecured discounted $12,000 notes, bearing interest at an effective interest rate
  of 11.5%, payable in semi-annual equal installments due 2010                               6,766          7,216
Unsecured discounted $5,000 note, bearing interest at an effective interest rate of
  12.0%, due 2015                                                                            3,197          3,143
Other                                                                                           84            438
                                                                                       -----------    -----------
                                                                                       $   101,547    $   102,297
                                                                                       ===========    ===========
</TABLE>

     The senior subordinated notes (the Notes) of $91,500 are net of $8,500 of
Notes owned by the Company's insurance subsidiaries at December 31, 2001 and
2000. The Notes are redeemable at the option of the Company, in whole or in
part, at 100% of the principal amount on January 1, 2001 and thereafter.

     The unsecured discounted notes bear interest at 6.5% per annum payable
semi-annually and rank pari passu with the Notes. The Company recorded the notes
at their fair value at the date of issuance using effective interest rates of
11.5% and 12.0%. The unamortized discount at December 31, 2001 was $3,198. The
$5,000 note is subject to contractual set-off rights to secure certain
indemnification obligations to the Company.

     In 1995, the Company entered into a $70,000 Credit Agreement which was
provided by a syndicate of lenders with The Chase Manhattan Bank as the
administrative agent. The Credit Agreement was amended and restated in December
1996 and subsequently amended in 1997 and 1998. The Company repaid all amounts
outstanding under the Credit Agreement during 1999. The Credit Agreement
operated as a revolving credit facility until December 31, 1999, at which time
it was terminated. Amounts outstanding under the Credit Agreement accrued
interest at a variable rate or the prime rate. The Company paid 0.2% per year on
the unused portion of the Credit Agreement.
<PAGE>

     The Notes contain certain covenants including, but not limited to,
limitations on indebtedness, liens securing indebtedness, sale or issuance of
capital stock of the Company's subsidiaries, restricted payments, issuance of
other subordinated indebtedness, investments, dividends and other distributions
by the Company's subsidiaries and transactions with affiliates. The Company was
in compliance with all debt covenants at December 31, 2001.

     The aggregate principal payments due during each of the next five years are
as follows:
<TABLE>


          <S>                                                   <C>
           2002                                                 $     552
           2003                                                       496
           2004                                                       551
           2005                                                    92,118
           2006                                                       691
           Later years                                              7,139
                                                               ----------
                                                               $  101,547
                                                               ==========
</TABLE>


8.       Stockholder's Equity and Statutory Surplus

     On December 31, 2001, the Company issued 1,350,000 shares of cumulative
Series A Preferred Stock to FHC in exchange for an equal number of shares of FHC
cumulative preferred stock. The Company authorized a total of 2,000,000 shares
of Series A Preferred Stock, which ranks senior to the Company's common stock as
to dividends and liquidation rights. The Company's preferred stock and the FHC
preferred stock each have a par value of $1.00 per share and a total stated
value of $135.0 million. Cumulative annual dividends on the Company's preferred
stock of 3.38% plus the LIBOR rate are payable quarterly, either in cash or in
additional shares of preferred stock. The Company will receive a quarterly
dividend on the FHC preferred stock at a rate of 3.11% plus the LIBOR rate per
annum, either in cash or in additional shares of FHC preferred stock. The
Company is required to redeem any outstanding shares of the Series A Preferred
Stock on December 31, 2016 for $100 per share plus any unpaid dividends.  The
FHC preferred stock is discussed further in Note 10 herein.

     The Company has accounted for its investment in the FHC preferred stock as
an offset to its own preferred stock in stockholder's equity. Dividends on the
Company's preferred stock, when payable, will also be substantially offset by
the dividends payable on the FHC preferred stock

     The Insurance Companies are required by the applicable state's department
of insurance to maintain minimum levels of statutory capital and surplus. The
reported statutory capital and surplus of each company at December 31, 2001 was:
<TABLE>

                                                                                   Reported Statutory
              Company                                                              Capital and Surplus

              <S>                                                                   <C>
              United Fidelity                                                        $    100,563
              Great Southern                                                               72,871
              Americo Financial                                                           132,594
              National Farmers                                                             27,895
              Ohio State                                                                   16,747
              Financial Assurance                                                           6,420
</TABLE>

     Dividend distributions of the Insurance Companies to their respective
stockholder exceeding the greater of statutory net gain from operations during
the preceding year or 10% of capital and surplus at the end of the preceding
year are subject to the prior approval of the Texas Department of Insurance.
Dividends from the Insurance Companies may be paid only from statutory earned
surplus as determined in accordance with accounting practices prescribed or
permitted by the Texas Department of Insurance. In addition, the National
Association of Insurance Commissioners ("NAIC") has minimum risk-based capital
requirements which effectively restrict the payment of dividends by the
Insurance Companies. At December 31, 2001 the Insurance Companies had statutory
capital and surplus in excess of the levels required by the NAIC risk-based
capital guidelines.
<PAGE>
     The AICPA recently issued Statement of Position No. 01-05 ("SOP 01-05")
"Amendments to Specific AICPA Pronouncements for Changes Related to the NAIC
Codification." SOP 01-05 amends SOP 94-5 "Disclosures of Certain Matters in the
Financial Statements of Insurance Enterprises" in response to the completion of
the codification of statutory accounting principles. SOP 01-05 requires the
disclosure of prescribed or permitted statutory accounting practice and the
related effect on statutory surplus of using an accounting practice that differs
from either state prescribed statutory accounting practices or NAIC codified
statutory accounting principles. These disclosures are required beginning with
financial statements issued for fiscal years ending after December 15, 2001.

     Texas insurance accounting regulations allow insurance companies to admit
certain furniture and equipment in excess of the levels allowed by NAIC
statutory accounting principles. As a result, the consolidated statutory surplus
of the Company's life insurance subsidiaries was $1,204 greater than under NAIC
statutory accounting principles at December 31, 2001.

     Accounting practices used to prepare statutory financial statements for
regulatory filings of stock life insurance companies differ from GAAP. The
following table summarizes capital stock and surplus and net income of the
Insurance Companies determined in accordance with accounting practices
prescribed or permitted by the state insurance departments. Included in these
amounts are amounts recorded in accordance with GAAP for non-insurance
subsidiaries.
<TABLE>
                                                                    2001             2000              1999
                                                                    ----             ----              ----
          <S>                                                   <C>               <C>              <C>
           Capital stock and surplus                             $  137,274        $  136,216       $  128,370
           Net income                                                12,361             2,288           16,573
</TABLE>

     Effective January 1, 2001, the state of Texas, in which all the Company's
insurance subsidiaries are domiciled, adopted the Codification of Statutory
Accounting Principles for life insurers. The implementation of these
standardized accounting principles, which increased the statutory surplus of the
Company's life insurance subsidiaries by approximately $11.0 million, did not
adversely impact the ability of the subsidiaries to make payments on the surplus
debentures or to pay dividends to the Company.

9.       Income Taxes

     Americo Life, Inc. will file a consolidated federal life and non-life
income tax return with FHC and FHC's eligible life and non-life subsidiaries. As
Financial Assurance is ineligible to join in the filing of the consolidated
return, it will file separately. The Company and its subsidiaries are charged or
credited an amount of federal income tax equal to the tax that would have been
due for each entity on a separate return basis in accordance with a written tax
allocation agreement. Net operating losses of members in each consolidated
return are utilized on a first-in, first-out basis.

      The provision for U.S. federal income taxes for the years ended December
31, is comprised of the following:
<TABLE>
                                                                                2001          2000          1999
                                                                                ----          ----          ----
<S>                                                                         <C>           <C>           <C>
Current tax provision                                                       $    (5,450)  $        74   $     5,746
Deferred tax provision                                                           11,107         7,494        (1,002)
                                                                            -----------   -----------   -----------
   Provision for income taxes                                               $     5,657   $     7,568   $     4,744
                                                                            ===========   ===========   ===========
</TABLE>

     The provision for income taxes differed from the amounts computed by
applying the applicable U.S. statutory federal income tax rate of 35% to pretax
income from continuing operations as a result of the following differences:
<TABLE>

                                                                                2001          2000          1999
                                                                                ----          ----          ----

<S>                                                                         <C>           <C>           <C>
Computed tax at statutory rate                                              $     5,932   $     7,854   $     5,676
Change in tax resulting from:
   Availability of dividends received deduction to offset taxable
    temporary differences                                                          (325)         (347)         (725)
   Other                                                                             50            61          (207)
                                                                            -----------   -----------   -----------
     Provision for income taxes                                             $     5,657   $     7,568   $     4,744
                                                                            ===========   ===========   ===========
</TABLE>

<PAGE>
     The Company's net deferred  federal tax liabilities  are comprised of the
tax cost or benefit  associated with the following items based on the 35% tax
rate in effect:
<TABLE>

                                                                                              2001          2000
                                                                                              ----          ----
<S>                                                                                      <C>           <C>
    Agent balances                                                                        $         -   $       131
    Cost of business acquired                                                                 153,155       144,263
    Investments                                                                                     -         1,256
    Deferred income                                                                            47,250             -
    Net unrealized investment gains                                                            16,676        19,301
                                                                                          -----------   -----------
         Total deferred tax liability                                                         217,081       164,951
                                                                                          -----------   -----------
Deferred tax asset:
    Policy reserves                                                                            64,541        63,550
    Investments                                                                                   249             -
    Agent balances                                                                              3,195             -
    Deferred policy acquisition costs                                                          28,758        26,529
    Utilization of net operating losses                                                        35,852         1,008
    Unearned policy revenues                                                                   19,296        19,522
    Other                                                                                       2,347           427
                                                                                          -----------   -----------
Deferred income tax assets before valuation allowances                                        154,238       111,036
    Less: valuation allowance                                                                  (2,982)       (2,982)
                                                                                          -----------   -----------
         Total deferred tax asset                                                             151,256       108,054
                                                                                          -----------   -----------
Net deferred tax liability                                                                $    65,825   $    56,897
                                                                                          ===========   ===========
</TABLE>

     A valuation allowance is provided related to the tax benefit of loss
carryovers and deductible differences, because it is more likely than not that
such benefits will not be realized.

     Under the provision of the pre-1984 life insurance company income tax
regulations, a portion of "gain from operations" of a life insurance company was
not subject to current taxation but was accumulated, for tax purposes, in a
special tax memorandum account designated as "Policyholders' Surplus Account"
(PSA). Federal income taxes will become payable on this account at the then
current tax rate when and to the extent the account exceeds a specific maximum,
or when and if distributions to stockholders, other than stock dividends and
other limited exceptions, are made in excess of the accumulated previously-taxed
income. At December 31, 2001, the Insurance Companies had aggregate balances in
their PSA of approximately $11,549. Federal income tax of $4,043 would be due if
the entire balance were distributed at the current income tax rate of 35%. No
provision has been recorded relating to any potential distributions from the PSA
subsequent to 2001.

     At December 31, 2001, the Insurance Companies with balances in their PSA
had aggregate balances in their Shareholder Surplus Accounts of approximately
$88,219 from which distributions could be made without incurring any federal tax
liability with respect to the PSA accounts.

     Certain subsidiaries have net operating loss carryovers totaling
approximately $102,432 which will begin to expire in 2009 if unutilized.
Utilization of $2,716 of the losses is limited to income generated on a separate
return basis.


<PAGE>



10.      Commitments and Contingencies

     The Company leases certain data processing equipment and office space, some
of which are leased from related parties under operating leases. Rental expense
was $4,540, $4,811 and $4,835 in 2001, 2000 and 1999, respectively, and is
included in other operating expenses. Approximate future minimum lease
commitments for leases whose terms are greater than one year at December 31,
2001 are as follows:
<TABLE>

                   <S>                                              <C>
                    2002                                             $    3,307
                    2003                                                  2,614
                    2004                                                  2,298
                    2005                                                  2,297
                    2006 and thereafter                                   7,637
                                                                     ----------
                                                                     $   18,153
                                                                     ==========
</TABLE>


     On December 31, 2001, Great Southern Life Insurance Company ("Great
Southern") was a defendant in the following certified class action: In re Great
Southern Life Insurance Company Sales Practices Litigation, MDL 1214, In the
United States District Court for the Northern District of Texas. The class
consists of certain present and former policyholders who purchased
interest-sensitive whole life and universal life insurance policies issued or
acquired by Great Southern between January 1, 1982 and December 31, 1999. By
orders entered on January 15, 2002, the Court approved a class-wide settlement
and dismissed with prejudice the claims of the class members. The orders
approving the settlement are now final, as no appeals were filed. Under the
terms of the settlement, Great Southern has agreed, among other things: (1) to
issue certificates to class members for premium discounts on future purchases of
certain life insurance policies and annuities from Great Southern and its
affiliates; (2) to pay class members at least 50% of Great Southern's future
earnings on the class members' policies for either 10 years or until a specified
amount, ranging between $21 million and $26 million, has been paid, whichever
takes longer; (3) to pay the plaintiffs' attorneys an initial payment $750,000,
and, thereafter, periodic payments equal to 22.38% of all amounts paid to the
class members under (2) above; and (4) to pay the administrative costs of the
settlement. Both the settlement and the Court's order approving the settlement
acknowledge that Great Southern has denied, and continues to deny, all the
allegations of misconduct.

     The Company has accounted for the terms of the settlement in the December
31, 2001 financial statements. If any contingent payments are made pursuant to
the above settlement, the Company will account for the payments as additional
policyholder benefits. Accordingly, the Company has included an estimate of such
payments in its estimate of future gross profits used to calculate the
amortization of deferred policy acquisition costs and the cost of business
acquired.

     Under the terms of the settlement, potential class members were given an
opportunity to exclude themselves from the class by sending a written exclusion
notice to the settlement administrator. Over 1,300 present and former
policyholders who sent in such exclusion notices have notified Great Southern
that they have retained an attorney to represent them. In early February 2002,
Great Southern filed actions in 12 states against substantially all of these
policyholders seeking, among other things, a declaration of nonliability.
Pursuant to Great Southern's request the Judicial Panel on Multidistrict
Litigation issued an order on March 27, 2002 conditionally transferring the
actions to the United States District Court for the Northern District of Texas
for consolidated pretrial proceedings. Great Southern is unable to estimate the
costs it might incur as a result of the exclusion notices or if the outcomes of
its declaratory judgment actions are adverse to it.


<PAGE>


     On December 31, 2001, Americo Financial, as well as certain affiliates of
the Company, were defendants in the following certified class action: Notzon, et
al. v. The College Life Insurance Company of America, et al.; No. 99-CVF-00697;
In the 111th District Court of Webb County, Texas. The class consists of certain
present and former owners of certain annuities and interest-sensitive life
insurance policies issued or acquired by Americo Financial between January 1,
1993 and October 1, 2001. By orders dated January 25, 2002, the Court approved a
class-wide settlement and dismissed with prejudice the claims of the class
members. The orders approving the settlement are now final, as no appeals were
filed. Under the terms of the settlement, Americo Financial has agreed, among
other things: (1) to provide three years of free accidental death benefit
coverage to most of the class members; (2) to allow certain class members to
transfer the cash values of their life insurance policies to a new annuity
issued by Americo Financial without incurring a surrender charge on the
transfer; (3) to modify certain of its marketing practices and policy terms; (4)
to create a claim resolution process to resolve claims of individual class
members; (5) to pay the named plaintiffs and their attorneys a cash payment of
$1,945,000; and (6) to pay the administrative costs of the settlement. In the
claim resolution process, the relief to be provided will consist of cash awards
and credits, premium vouchers, policy modifications, accidental death benefit
coverage, and interest. Additionally, Americo Financial and certain of its
codefendants have agreed to arbitrate among themselves how the costs associated
with the settlement will be allocated. Both the settlement and the order
approving the settlement acknowledge that Americo Financial and its codefendants
have denied, and continue to deny, all allegations of wrongdoing. The Company
has accounted for the anticipated costs of the settlement in the December 31,
2001 financial statements.

     On December 31, 2001, Americo Retirement Services, Inc. (ARS), a
wholly-owned subsidiary of Americo Life, Inc., established a grantor trust (the
Trust) for the purpose of paying certain amounts due under the Americo Financial
litigation settlement agreement. The Trust was funded with a contribution of the
FHC preferred stock received by Americo in exchange for Americo's own preferred
stock. In order to fund its obligations, the Trust is authorized to sell shares
of the FHC preferred stock as necessary. FHC has the right of first refusal on
any shares the Trust offers for sale. The Trust will exist until all such
obligations for which it has been made responsible have been paid or expired. At
such time, any assets remaining in the Trust will revert back to ARS. The
accounts of the Trust are included in the consolidated financial statements of
the Company.

     Great Southern and Americo, together with one of Great Southern's general
agents, Great American Life Underwriters ("GALU"), Entrepreneur Corporation,
Mercantile Life Insurance Company, American Planning Corporation and various
individuals, including certain officers of Great Southern and Americo, were
named defendants in an action that was certified as a class action on April 28,
1998 (Thibodeau et al. v. Great American Life Underwriters, et al., District
Court, Dallas County, Texas). The class members, who were life insurance agents
for GALU, allege that they were defrauded by defendants into surrendering
renewal commissions in return for the promise of stock ownership in an unrelated
company (Entrepreneur Corporation) to be made public at some point in the
future. On July 26, 2000, the Court approved a class action settlement pursuant
to which Great Southern paid $1.1 million to settle the claims asserted by the
plaintiff class. The Texas Court of Appeals affirmed the trial court's approval
of the settlement on November 9, 2001 and denied appellant's motion for
rehearing on January 15, 2002. No petition for review by the Texas Supreme Court
was filed, and the order approving the settlement is now final. Shortly before
the settlement was approved by the trial court, a co-defendant named in the
lawsuit, Norman T. Faircloth, filed a cross-claim against several of the other
defendants, including Americo, Great Southern, Great American Life Underwriters,
Inc., Entrepreneur Corp., and certain officers of Great Southern and Americo.
The cross claim asserted claims similar to those asserted by the plaintiffs in
the underlying lawsuit and sought similar relief including actual damages,
treble and punitive damages, emotional distress damages and an accounting. On
April 13, 2001, the court granted summary judgment in favor of Great Southern
and other affiliated defendants on such cross-claim.

     On July 16, 1998, Great Southern, Fremont Life Insurance Company and
Fremont General Corporation (collectively "Fremont") were named as defendants in
a purported class action lawsuit arising out of the sale of, and imposition of
surrender charges under, deferred annuity contracts (Gularte v. Fremont Life
Ins. Co., et al., Los Angeles Superior Court, Los Angeles, California). On April
2, 1999, the court entered judgment dismissing with prejudice the action against
Great Southern and all other defendants. On May 31, 2000, the California Court
of Appeals affirmed the dismissal of plaintiff's fraud and reformation claims,
but reversed the dismissal of claims alleging unconscionability, breach of
covenant of good faith and fair dealing and statutory unfair business practices.
The California Supreme Court denied defendants' petition for review, and the
case has been remanded to the trial court for further proceedings.
<PAGE>
      On August 16, 1999, a purported class action lawsuit (Pritzker v. The
College Life Insurance Company of America, and Loyalty Life Insurance Company,
U.S. District Court for the District of Massachusetts) was filed against the
Company's subsidiary, AFL, and former subsidiary, Loyalty Life Insurance
Company. Plaintiff alleges misrepresentations, breach of contract, and other
wrongful conduct in connection with the imposition of increased cost of
insurance charges under certain universal life policies assumed by defendants.
Plaintiff also alleges defendants paid less than the minimum guaranteed interest
due under such policies. Plaintiff also has sought leave to add a claim that
defendants misrepresented the amount of interest paid in excess of the
guaranteed amounts. The suit seeks actual and punitive damages, restitutionary
and injunctive relief and an accounting.


     On December 13, 2001, a purported class action lawsuit (Lukens, et al. v.
Ohio State Life Insurance Company) was filed against Ohio State in California's
Los Angeles County Superior Court. The suit alleges that, on or before June 25,
1990, Ohio State breached the terms of certain of its universal life policies by
increasing its cost of insurance rates without justification. The suit alleges
that the increased rates were improperly motivated by Ohio State's desire to
increase its revenues by, among other things, passing on to policyholders its
increased tax liabilities under 1990 federal legislation governing the tax
accounting for deferred policy acquisition costs. The suit asserts claims for
breach of contract; breach of the covenant of good faith and fair dealing; and
acts of unfair competition under California's Business and Professions Code. The
suit seeks compensatory and exemplary damages in unspecified amounts, as well as
injunctive relief and restitution.

     On March 13, 2001, a purported class action lawsuit (Ernesto Cortes v. Ohio
State Life Insurance Company, 11th Judicial Circuit Court, Dade County, Florida)
was filed against Ohio State. The suit alleges that Ohio State breached its
obligations under a term life insurance policy purchased by plaintiff by failing
to observe the guaranteed features of the policy. The suit seeks damages in an
unspecified amount, prejudgment interest and attorney's fees on behalf of
plaintiff and a purported national class of others similarly situated.

     The Company and its subsidiaries named in the above pending actions deny
any allegations of wrongdoing and intend to defend the actions vigorously.
Although plaintiffs in these actions generally are seeking indeterminate
amounts, including punitive and treble damages, such amounts could be large.
Although there can be no assurances, at the present time the Company does not
anticipate that the ultimate liability arising from such pending litigation,
after consideration of amounts provided in the consolidated financial
statements, will have a material adverse effect on the financial condition of
the Company.

     The Company is also named as defendant in a number of other lawsuits
arising from the normal course of business, however, management does not expect
that these will result in a material loss to the Company.

11.      Employee Benefit Plans

     Great Southern is a sponsor of several contributory postretirement benefit
plans which provide life and medical insurance to participating retired
employees and agents. Great Southern's former parent assumed responsibility for
employees and agents who retired on or after August 1, 1984. Future costs of
benefits for employees and agents who retired prior to August 1, 1984, are the
responsibility of the Company. A liability for these postretirement benefits of
$1,557 and $1,180 is included in other liabilities at December 31, 2001 and
2000, respectively.

12.      Segment Information

     The Company has determined that its reportable segments are those that are
based on the Company's method of internal reporting, which disaggregates its
business by product type. The Company's reportable segments are: life insurance
operations, asset accumulation products operations and non-life insurance
operations. The life insurance segment includes traditional term, whole life
insurance, universal-life insurance and annuity products. This segment primarily
consists of insurance business acquired by the Company. The accumulation
products segment includes primarily annuity products sold to public school
teachers and administrators and to the senior market. The non-life insurance
segment includes the Company's investments in real estate and its 50% investment
in Argus prior to dividending Argus to FHC on December 1, 2001. The Company's
business is conducted primarily in the United States.



<PAGE>


     The financial results of the Company's segments are presented on a GAAP
basis. Net investment income and operating expenses are allocated to its life
insurance and accumulation products segments based on the Company's internal
projections. The Company evaluates the performance of its segments and allocates
resources to them based on income before provision for income taxes. All
intersegment revenues have been eliminated.

     The table below presents information about the reported revenues and income
before provision for income taxes. Asset information by reportable segment is
not reported, since the Company does not produce such information internally.
<TABLE>

                                                  Accumulation       Non-Life
                               Life Insurance      Products          Insurance       Reconciling      Consolidated
                                 Operations        Operations       Operations          Items            Totals

<S>                            <C>              <C>               <C>              <C>               <C>
Revenues
     2001                       $    362,363     $     62,992      $      6,397     $     (5,683)     $    426,069
     2000                            380,255           57,845             4,950            7,377           450,427
     1999                            398,423           42,568             6,019           15,829           462,839

Amortization expense
     2001                       $     27,301     $     14,099      $          -     $      1,509      $     42,909
     2000                             68,854           (1,383)                -              527            67,998
     1999                             67,364            3,179                 -            3,100            73,643

Income (loss) before provision
  for income taxes
     2001                       $     50,955     $     (1,357)     $      1,348     $    (33,996)     $     16,950
     2000                             46,853           10,610             1,929          (36,952)           22,440
     1999                             43,950              642             4,034          (32,408)           16,218
</TABLE>

     Significant reconciling items to amounts reported in the Company's
consolidated financial statements which are not allocated to specific segments
include interest expense and a portion of (i) net investment income, (ii)
operating expenses (iii) net realized investment gains (losses) and (iv) certain
non-recurring transactions such as gains from the sale of subsidiaries.

13.      Related Parties

     The Company and FHC are parties to advisory and data processing services
agreements. Under the advisory agreement, FHC supervises and directs the
composition of the investment portfolios of the Company and its subsidiaries in
accordance with their respective objectives and policies. For these services,
FHC is compensated based on the aggregate statutory book value of the
investments of the Insurance Companies. Under the data processing agreement, FHC
provides the Company and its subsidiaries with record-keeping services for
certain life insurance and annuity products. The Company pays FHC an amount
equal to (i) the amount FHC pays its data processing vendor plus (ii)
amortization of FHC's development costs. The Company and its subsidiaries are
also involved in a cost-sharing agreement with FHC respecting air transportation
expenses arising from the use of an airplane owned by FHC.

     United Fidelity leases office space from a partnership in which a related
party has a 50% interest. The Company leases to FHC a building which is occupied
by FHC. In addition, the Company utilizes a laboratory for underwriting purposes
which is partially-owned by several stockholders of FHC.

     Amounts due from (to) affiliates at December 31, 2001 and 2000 include
$1,807 and $(698), respectively, due from (to) FHC arising from intercompany tax
allocation.


<PAGE>


     The following table summarizes the related party transactions for the three
years ended December 31:
<TABLE>

                                                                                2001          2000          1999
                                                                                ----          ----          ----

<S>                                                                         <C>           <C>           <C>
Data processing agreement between the Company and FHC                       $   8,552     $   8,811     $  11,413
Advisory agreement between the Company and FHC                                  3,935         4,864         5,035
Air transportation cost sharing agreement                                         328           440           343
Rental expense                                                                  1,445         1,474         1,396
Laboratory services                                                               341           337           406
</TABLE>


<PAGE>




                       AMERICO LIFE, INC. AND SUBSIDIARIES

                     INDEX TO FINANCIAL STATEMENT SCHEDULES
<TABLE>



                                                                                                              Page
<S>                                                                                                           <C>
Report of Independent Accountants on Financial Statement Schedules                                             S-2
Schedule II       Condensed Financial Information of Registrant                                                S-3
Schedule IV       Reinsurance                                                                                  S-7
Schedule V        Valuation and Qualifying Accounts                                                            S-8
</TABLE>


         All other financial statement schedules for which provision is made in
the applicable accounting regulation of the Securities and Exchange Commission
are not required under the related instructions or are inapplicable, and
therefore have been omitted.




<PAGE>



                      Report of Independent Accountants on
                          Financial Statement Schedules

To the Board of Directors and
Stockholder of Americo Life, Inc.


     Our audits of the consolidated financial statements referred to in our
report dated March 25, 2002 appearing on page F-2 of this Form 10-K also
included an audit of the Financial Statement Schedules listed in Item 14(a) of
this Form 10-K. In our opinion, these Financial Statement Schedules present
fairly, in all material respects, the information set forth therein when read in
conjunction with the related consolidated financial statements.




PRICEWATERHOUSECOOPERS LLP
Kansas City, Missouri
March 25, 2002



<PAGE>



                                                                   Schedule II
                       Americo Life, Inc. and Subsidiaries

                  Condensed Financial Information of Registrant
                                  Balance Sheet
                             (Dollars in thousands)
                           December 31, 2001 and 2000

<TABLE>

                                                                                              2001          2000
                                                                                              ----          ----
                                         Assets
<S>                                                                                      <C>           <C>
Fixed maturity securities, available for sale, at market (cost: $1,006 and $0)            $     1,030   $         -
Equity securities, at market (cost: $9,187 and $9,082)                                         27,155        33,639
Investment in subsidiaries                                                                    221,080       221,882
Cash and cash equivalents                                                                         643            80
Surplus debentures receivable                                                                 122,222       121,668
Property and equipment, net                                                                       594           974
Other assets                                                                                    6,967        31,841
                                                                                          -----------   -----------
   Total assets                                                                           $   379,691   $   410,084
                                                                                          ===========   ===========

                          Liabilities and Stockholder's Equity
Notes payable                                                                             $   109,963   $   110,359
Accrued interest payable                                                                          839           842
Amounts due to affiliates                                                                       3,252           311
Deferred income taxes                                                                          10,012         9,259
Other liabilities                                                                               3,317        34,651
                                                                                          -----------   -----------
   Total liabilities                                                                          127,383       155,422
                                                                                          -----------   -----------

Stockholder's equity:
Common stock ($1 par value, 30,000 shares authorized, 10,000 issued and
  outstanding)                                                                                     10            10
Preferred stock, net of investment in parent company preferred stock                                -             -
Additional paid-in capital                                                                      3,745         3,745
Accumulated other comprehensive income                                                         30,757        35,635
Retained earnings                                                                             217,796       215,272
                                                                                          -----------   -----------
   Total stockholder's equity                                                                 252,308       254,662
                                                                                          -----------   -----------
   Total liabilities and stockholder's equity                                             $   379,691   $   410,084
                                                                                          ===========   ===========
</TABLE>
















                  See notes to condensed financial information
<PAGE>

                                                                  Schedule II
                       Americo Life, Inc. and Subsidiaries

                  Condensed Financial Information of Registrant
                               Statement of Income
                             (Dollars in thousands)
              For the Years Ended December 31, 2001, 2000 and 1999
<TABLE>

                                                                                2001          2000          1999
                                                                                ----          ----          ----
<S>                                                                        <C>           <C>           <C>
Income
   Management and data processing fees from subsidiaries                    $    11,916   $    12,301   $    14,840
   Interest income on surplus debentures receivable                              10,817        11,306        11,427
   Net investment income                                                            564           143           624
   Net realized investment gains (losses)                                         1,179        (1,644)         (196)
   Other income                                                                     119         1,627         1,978
                                                                            -----------   -----------   -----------
     Total income                                                                24,595        23,733        28,673
                                                                            -----------   -----------   -----------

Expenses
   Management and advisory fees to parent                                        12,487        13,675        16,448
   Interest expense                                                              10,440        10,515        11,647
   Other operating expenses                                                      (5,226)        1,423         6,563
   Amortization expense                                                             691           923         1,193
                                                                            -----------   -----------   -----------
     Total expenses                                                              18,392        26,536        35,851
                                                                            -----------   -----------   -----------
     Income (loss) before provision for income taxes and equity in income
       of subsidiaries                                                            6,203        (2,803)       (7,178)
Provision for income taxes                                                        1,847        (1,008)       (2,341)
                                                                            -----------   -----------   -----------
     Loss before equity in income of subsidiaries                                 4,356        (1,795)       (4,837)
Equity in income of subsidiaries                                                  7,769        16,667        16,311
                                                                            -----------   -----------   -----------
     Net income                                                             $    12,125   $    14,872   $    11,474
                                                                            ===========   ===========   ===========
</TABLE>
























                  See notes to condensed financial information


<PAGE>


                                                                   Schedule II
                       Americo Life, Inc. and Subsidiaries

                  Condensed Financial Information of Registrant
                             Statement of Cash Flows
                             (Dollars in thousands)
              For the Years Ended December 31, 2001, 2000 and 1999
<TABLE>

                                                                                2001          2000          1999
                                                                                ----          ----          ----

<S>                                                                        <C>           <C>           <C>
Cash flows from operating activities
  Net income                                                                $   12,125    $   14,872    $   11,474
  Adjustments to reconcile net income to net cash provided (used) by
   operating activities:
    Depreciation and amortization                                                1,258         1,561         1,866
    Undistributed equity in earnings of subsidiaries                            (7,769)      (16,667)      (16,311)
    Dividends received from subsidiaries                                             -             -        12,616
    Decrease (increase) in other assets, net of amortization                    22,086       (18,763)       (4,459)
    Increase (decrease) in other liabilities                                   (27,934)       17,878         7,387
    Provision for current income taxes                                               -             -         1,597
    Provision for deferred income taxes                                          2,272          (948)       (1,883)
    Increase (decrease) in amounts due to/from affiliates                        2,941        (4,474)        6,436
    Net realized (gains) losses on investments                                  (1,179)        1,644           196
    Other changes                                                                  300           299           338
                                                                            ----------    ----------    ----------
    Total adjustments                                                           (9,358)      (19,470)        7,783
                                                                            -----------   ----------    ----------
    Net cash provided (used) by operating activities                             4,100        (4,598)       19,257
                                                                            ----------    ----------    ----------

Cash flows from investing activities
  Purchases of equity securities                                                  (105)         (264)       (2,991)
  Sales of equity securities                                                         -         3,182         5,881
  Purchases of fixed maturity investments                                       (1,007)            -             -
  Investment in subsidiary                                                          (1)            -             -
  Principal collected on surplus debentures receivable                             950           906           866
  Change in other invested assets                                                 (488)          206        (4,007)
  Purchases of property and equipment, net                                        (186)         (266)         (254)
                                                                            -----------   ----------    ----------
    Net cash provided (used) by investing activities                              (837)        3,764          (505)
                                                                            -----------   ----------    ----------

Cash flows from financing activities
  Repayments of notes payable                                                     (700)         (655)      (21,615)
  Dividends paid                                                                (2,000)       (2,000)       (2,000)
                                                                            -----------   ----------    ----------
  Net cash used by financing activities                                         (2,700)       (2,655)      (23,615)
                                                                            -----------   ----------    ----------

Net increase (decrease) in cash and cash equivalents                               563        (3,489)       (4,863)
Cash and cash equivalents at beginning of year                                      80         3,569         8,432
                                                                            ----------    ----------    ----------
Cash and cash equivalents at end of year                                    $      643    $       80    $    3,569
                                                                            ==========    ==========    ==========

Supplemental disclosure of cash flow information
  Cash paid during year for interest                                        $   10,165    $   10,349    $   11,251

Supplemental schedule of noncash investing and financing
 activities
 Dividend of equity subsidiary to parent                                    $    7,601    $        -    $        -
</TABLE>



                  See notes to condensed financial information
<PAGE>
                                                                   Schedule II
                       Americo Life, Inc. and Subsidiaries

                  Condensed Financial Information of Registrant
                    Notes to Condensed Financial Information
                             (Dollars in thousands)
              For the Years Ended December 31, 2001, 2000 and 1999

     In 1999, the Company received dividends totaling $12,376 from United
Fidelity and cash distributions totaling $240 from Hereford LLP.

     The accompanying condensed financial information should be read in
conjunction with the Consolidated Financial Statements and the accompanying
notes thereto in this Form 10-K.



<PAGE>


                                                                   Schedule IV
                       Americo Life, Inc. and Subsidiaries

                                   Reinsurance
                             (Dollars in thousands)
              For the Years Ended December 31, 2001, 2000 and 1999
<TABLE>

                                                                                                        Percentage
                                                                       Assumed                          of Amount
          Year Ended                 Gross        Ceded to Other      From Other           Net           Assumed
         December 31,                Amount          Companies        Companies           Amount         to Net


<S>                             <C>               <C>              <C>               <C>                    <C>
2001
Insurance in force              $   41,730,003    $   13,926,057   $      396,337    $   28,200,283          1.4%
                                ==============    ==============   ==============    ==============          ====

Premiums                        $      262,427    $       60,443   $        4,899    $      206,883          2.4%
                                ==============    ==============   ==============    ==============          ====

2000
Insurance in force              $   43,537,028    $   14,512,268   $      300,465    $   29,325,225          1.0%
                                ==============    ==============   ==============    ==============          ====

Premiums                        $      281,055    $       68,124   $        7,760    $      220,691          3.5%
                                ==============    ==============   ==============    ==============          ====

1999
Insurance in force              $   43,802,144    $   11,134,535   $      602,028    $   33,269,637          1.8%
                                ==============    ==============   ==============    ==============          ====

Premiums                        $      265,134    $       49,905   $        9,667    $      224,896          4.3%
                                ==============    ==============   ==============    ==============          ====
</TABLE>






<PAGE>

                                                                    Schedule V
                       Americo Life, Inc. and Subsidiaries

                        Valuation and Qualifying Accounts
                             (Dollars in thousands)
              For the Years Ended December 31, 2001, 2000 and 1999
<TABLE>

                                                                      Additions
                                                              ---------------------------
                                                 Balance at    Charged to    Charged to                  Balance at
         Year Ended                              Beginning      Cost and       Other                       End of
         December 31,                            of Period      Expenses    Accounts (1)   Deductions      Period
         ------------                            ---------      --------     ---------     ----------      ------
<S>                                            <C>           <C>           <C>           <C>           <C>
2001
Reserve for impairment of mortgage loans
on real estate                                  $       300   $         -   $         -   $       300   $         -
Write-down for impairment of real estate                  -             -             -             -             -
Allowance for receivables from agents                 4,951         4,017         2,215                      11,183
                                                -----------   -----------   -----------   -----------   -----------
   Total                                        $     5,251   $     4,017   $     2,215   $       300   $    11,183
                                                ===========   ===========   ===========   ===========   ===========

2000
Reserve for impairment of mortgage loans
on real estate                                  $       300   $         -   $         -   $         -   $       300
Write-down for impairment of real estate                 68             -             -            68             -
Allowance for receivables from agents                 4,242           709             -             -         4,951
                                                -----------   -----------   -----------   -----------   -----------
   Total                                        $     4,610   $       709   $         -   $        68   $     5,251
                                                ===========   ===========   ===========   ===========   ===========

1999
Reserve for impairment of mortgage loans
on real estate                                  $       300   $         -   $         -   $         -   $       300
Write-down for impairment of real estate                107             -             -            39            68
Allowance for receivables from agents                 3,580           662             -             -         4,242
                                                -----------   -----------   -----------   -----------   -----------
   Total                                        $     3,987   $       662   $         -   $        39   $     4,610
                                                ===========   ===========   ===========   ===========   ===========
</TABLE>


(1)      Amounts transferred from other allowance accounts.




<