<PAGE>
 
                                   FORM 10-Q


                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549

       (Mark One)
       [X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
                        SECURITIES EXCHANGE ACT OF 1934

       For the quarterly period ended March 31, 1999

                                      OR

       [_]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
                        SECURITIES EXCHANGE ACT OF 1934
                                        
       For the transition period from            to
 
       Commission file number:   33-85988

                          C.M. LIFE INSURANCE COMPANY
                          ---------------------------
            (Exact name of registrant as specified in its charter)

               Connecticut                                06-1041383
               -----------                                ----------
          (State or other jurisdiction of              (I.R.S. Employer
          incorporation or organization)               Identification No.)

                140 Garden Street, Hartford, Connecticut 06154
                ----------------------------------------------
                   (Address of principal executive offices)
                                  (Zip Code)

                                (860) 987-6500
                                --------------
             (Registrant's telephone number, including area code)

                                     None
                                     ----
                    (Former name, former address and former
                  fiscal year, if changed since last report)

     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

Yes   X     No  ____
    -----         

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

     Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.

Yes ___   No  ___

                     APPLICABLE ONLY TO CORPORATE ISSUERS

Registrant has 12,500 shares of common stock outstanding on March 31, 1999, all
of which are owned by Massachusetts Mutual Life Insurance Company.

THE REGISTRANT MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTION H(1) OF
FORM 10-Q AND IS THEREFORE FILING THIS FORM WITH THE REDUCED DISCLOSURE FORMAT.
<PAGE>
 
                          C.M. LIFE INSURANCE COMPANY
                                        
                                     INDEX

<TABLE>
<CAPTION>
Part I    Financial Information
          ---------------------
<S>                                                                         <C> 
          Item 1:  Financial Statements

                    Statutory Statements of Financial Position -                                                       
                      March 31, 1999 and December 31, 1998                               3  

                    Statutory Statements of Income-                                                                    
                      Three Months Ended March 31, 1999 and 1998                         4  

                    Statutory Statements of  Shareholder's Equity                                                      
                      Three Months Ended March 31, 1999 and 1998                         5  

                    Statutory Statements of Cash Flows-                     
                      Three Months Ended March 31, 1999 and 1998                         6  

                    Condensed Notes to Statutory Financial Statements                    7     
     
          Item 2:   Management's Discussion and Analysis of Financial
                      Condition and Results of Operations                                9
 
          Item 3:   Quantitative and Qualitative Disclosure About
                      Market Risk                                                       12

Part II   Other Information
          
          Item 1:   Legal proceedings                                                 None

          Item 2:   Changes in securities                                   Not Applicable

          Item 3:   Defaults upon senior securities                         Not Applicable

          Item 4:   Submission of matters to a vote of security holders     Not Applicable

          Item 5:   Other information                                                 None

          Item 6:   Exhibits and reports on Form 8-K                                    13

 Signatures                                                                             13
</TABLE> 
 
                                      2 
<PAGE>
 
                                    PART I
                                    ITEM 1
                                        
                          C.M. LIFE INSURANCE COMPANY
                  STATUTORY STATEMENTS OF FINANCIAL POSITION

<TABLE>
<CAPTION>
                                                                March 31,                December 31,            
                                                                   1999                     1998                 
                                                                   ----                     ----                 
                                                                (Unaudited)                                      
                                                                                                                 
                                                               ($ In Millions Expect for  Par Value)             
<S>                                                            <C>                       <C>                     
Assets:                                                                                                          
Bonds                                                             $  674.7                $  683.0               
Mortgage loans                                                       132.9                   126.3               
Other investments                                                     79.2                    76.3               
Policy loans                                                         146.6                   150.4               
Cash and short-term investments                                      123.9                   105.7               
                                                                  --------                --------               
                  Total invested assets                            1,157.3                 1,141.7               
                                                                                                                 
Investment and insurance amounts receivable                           39.0                    36.0               
Transfers due from separate account                                   38.9                    34.3               
                                                                  --------                --------               
                                                                   1,235.2                 1,212.0               
Separate account assets                                            1,297.0                 1,318.9               
                                                                  --------                --------               
               Total assets                                       $2,532.2                $2,530.9               
                                                                  ========                ========               
                                                                                                                 
Liabilities:                                                                                                     
                                                                                                                 
Policyholders' reserves and funds                                 $1,010.8                $  996.3               
Policyholders' claims and other benefits                               8.7                     3.8               
Payable to parent                                                     18.3                    28.8               
Federal income taxes                                                   4.6                      -
Asset valuation and other investment reserves                         24.7                    23.9               
Other liabilities                                                     21.7                    18.2               
                                                                  --------                --------               
                                                                   1,088.8                 1,071.0               
Separate account liabilities                                       1,297.0                 1,318.9               
                                                                  --------                --------               
               Total liabilities                                   2,385.8                 2,389.9               
                                                                  --------                --------               
Shareholder's equity:                                                                                            
                                                                                                                 
Common stock, $200 par value                                                                                     
               50,000 shares authorized                                                                          
               12,500 shares issued and outstanding                    2.5                     2.5               
Paid-in and contributed surplus                                       68.8                    68.8               
Surplus                                                               75.1                    69.7               
                                                                  --------                --------               
               Total shareholder's equity                            146.4                   141.0               
                                                                  --------                --------               
               Total liabilities and shareholder's equity         $2,532.2                $2,530.9               
                                                                  ========                ========               
</TABLE> 
 
            See condensed notes to statutory financial statements.

                                       3
<PAGE>
 
                                    PART I
                              ITEM 1 (CONTINUED)
                                        
                          C.M. LIFE INSURANCE COMPANY
                        STATUTORY STATEMENTS OF INCOME
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                                               Three Months Ended March 31,
                                                                               ----------------------------
                                                                               1999                   1998
                                                                               ----                   ----
                                                                                       (In Millions)
<S>                                                                           <C>                    <C>
Revenue:
Premium income                                                                $ 99.5                 $ 85.9
Net investment income                                                           19.7                   18.5
Fees and other income                                                            1.8                    0.6
                                                                              ------                 ------
                                                                               121.0                  105.0
                                                                              ------                 ------
Benefits and expenses:
Policyholders'  benefits and payments                                           70.7                   33.0
Addition to policyholders' reserves and funds                                    7.6                   34.1
Operating expenses                                                              16.2                   13.4
Commissions                                                                     13.0                   10.3
State taxes, licenses and fees                                                   1.4                    2.3
                                                                              ------                 ------
                                                                               108.9                   93.1
                                                                              ------                 ------
Net gain from operations before federal income taxes                            12.1                   11.9
Federal income taxes                                                             6.5                    5.5
                                                                              ------                 ------
Net gain from operations                                                         5.6                    6.4
 
Net realized capital gain                                                          -                      -
                                                                              ------                 ------
 
Net income                                                                    $  5.6                 $  6.4
                                                                              ======                 ======
</TABLE> 
 
            See condensed notes to statutory financial statements.

                                       4
<PAGE>
 
                                    PART I
                              ITEM 1 (CONTINUED)
                                        
                          C.M. LIFE INSURANCE COMPANY
                 STATUTORY STATEMENTS OF SHAREHOLDER'S EQUITY
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                                  Three Months Ended March 31,            
                                                                  ---------------------------             
                                                                     1999           1998                  
                                                                     ----           ----                     
                                                                        (In Millions)                     
<S>                                                               <C>              <C>                    
Shareholder's equity, beginning of year                             $141.0         $113.2                    
Increases (decreases) due to:                                                                                
Net income                                                             5.6            6.4                    
Change in asset valuation and other investment reserves               (0.8)          (2.3)                   
Changes in non-admitted assets and other                               1.0            0.9                    
Change in unrealized capital gain (loss)                              (0.4)           3.7                    
                                                                    ------         ------                    
                                                                       5.4            8.7                    
                                                                    ------         ------                    
Shareholder's equity, end of period                                 $146.4         $121.9                    
                                                                    ======         ======                    
</TABLE> 
 
            See condensed notes to statutory financial statements.

                                       5
<PAGE>
 
                                    PART I
                              ITEM 1 (CONTINUED)
                                        
                          C.M. LIFE INSURANCE COMPANY
                      STATUTORY STATEMENTS OF CASH FLOWS
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                                 Three Months Ended March 31,
                                                               --------------------------------
                                                                 1999                    1998
                                                                 ----                    ----
                                                                         (In Millions)
<S>                                                            <C>                      <C> 
Operating activities:                                           
                                                                
Net income                                                       $  5.6                 $   6.4
Additions to policyholders' reserves and funds                                          
    net of transfers to separate accounts                          19.4                     3.5
Other changes                                                      (5.1)                   (3.9)
                                                                -------                 -------
          Net cash provided by operating activities                19.9                     6.0
                                                                -------                 -------
                                                                                        
Investing activities:                                                                   
                                                                                        
Loans and purchases of investments                                (81.8)                 (224.7)
Sales and maturities of investments and                                                 
   receipts from repayments of loans                               80.1                   182.7 
                                                                -------                 ------- 
                                                                
          Net cash used in investing activities                    (1.7)                  (42.0)
                                                                -------                 -------
                                                                                        
Increase (decrease) in cash and short-term investments             18.2                   (36.0)
                                                                                        
Cash and short-term investments, beginning of year                105.7                    88.4
                                                                -------                 -------
                                                                                        
Cash and short-term investments, end of period                  $ 123.9                 $  52.4
                                                                =======                 =======
</TABLE> 
 

             See condensed notes to statutory financial statements.

                                       6
<PAGE>
 
                                    PART I
                              ITEM 1 (CONTINUED)
                                        
                          C.M. LIFE INSURANCE COMPANY
               CONDENSED NOTES TO STATUTORY FINANCIAL STATEMENTS
                                MARCH 31, 1999
                                  (UNAUDITED)
                                        

C.M. Life Insurance Company ("C.M. Life" or "The Company"), 140 Garden Street,
Hartford, Connecticut, 06154, is a stock life insurance company. The Company
primarily sells flexible premium universal life insurance and variable annuity
products, and is licensed in Puerto Rico, the District of Columbia and 49
states, excluding the State of New York. C.M. Life is a wholly owned stock life
insurance subsidiary of Massachusetts Mutual Life Insurance Company
("MassMutual").


1.  SUMMARY OF ACCOUNTING PRACTICES
-----------------------------------

The accompanying statutory financial statements have been prepared in conformity
with the statutory accounting practices of the National Association of Insurance
Commissioners ("NAIC") and the accounting practices prescribed or permitted by
the Department of Insurance of the State of Connecticut and are different in
some respects from financial statements prepared in accordance with generally
accepted accounting principles ("GAAP").  The more significant differences are
as follows:  (a) acquisition costs, such as commissions and other costs directly
related to acquiring new business, are charged to current operations as
incurred, whereas GAAP would require these expenses to be capitalized and
recognized over the life of the policies; (b) policy reserves are based upon
statutory mortality and interest requirements without consideration of
withdrawals, whereas GAAP reserves would be based upon reasonably conservative
estimates of mortality, interest and withdrawals; (c) bonds are generally
carried at amortized cost whereas GAAP generally requires they be reported at
fair value; (d) deferred income taxes are not provided for book-tax timing
differences as would be required by GAAP; and (e) payments received for
universal life products and variable annuities are reported as premium revenue,
whereas under GAAP, these payments would be recorded as deposits to
policyholders' account balances.

In March 1998, the NAIC adopted the Codification of Statutory Accounting
Principles ("Codification").  Codification provides a comprehensive guide of
statutory accounting principles for use by insurers in all states and is
expected to become effective no later than January 1, 2001.  The effect of
adopting Codification shall be reported as an adjustment to surplus on the
effective date.  The Company is currently reviewing the impact of codification;
however, since the State of Connecticut Insurance Department has not approved
Codification, the ultimate impact cannot be determined at this time.

The preparation of financial statements requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities, as
well as disclosures of contingent assets and liabilities, at the date of the
financial statements.  Management must also make estimates and assumptions that
affect the amounts of revenues and expenses during the reporting period.  Future
events, including changes in the levels of mortality, morbidity, interest rates
and asset valuations, could cause actual results to differ from the estimates
used in these financial statements.

In the Company's opinion these financial statements contain all adjustments,
consisting of only normal recurring adjustments, necessary to present fairly its
statutory financial position in accordance with statutory accounting principles,
as of March 31, 1999 and December 31, 1998, and the results of its operations,
changes in shareholder's equity, and its cash flows for the three month periods
ended March 31, 1999 and 1998.

The accompanying unaudited interim financial statements have been prepared in
accordance with the instructions to Form 10-Q and the rules and regulations of
the Securities and Exchange Commission.  Certain prior period amounts have been
restated to conform to current presentation.  These financial statements have
been prepared under the presumption that users of the interim financial
information have either read or have access to C.M. Life's audited statutory
financial statements for the year ended December 31, 1998.  Accordingly,
footnote disclosures, which would substantially duplicate the 

                                       7
<PAGE>
 
disclosures contained in C.M. Life's December 31, 1998, audited statutory
financial statements, have been omitted from these interim financial statements.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with statutory accounting principles have been
condensed or omitted pursuant to instructions, rules and regulations. These
unaudited interim financial statements should be read in conjunction with the
audited statutory financial statements and notes thereto, included in C.M.
Life's Annual Report on Form 10-K, for the year ended December 31, 1998.


2.  RELATED PARTY TRANSACTIONS
------------------------------

MassMutual and the Company have an agreement whereby MassMutual, for a fee,
furnishes the Company, as required, operating facilities, human resources,
computer software development and managerial services.  Also, investment and
administrative services are provided to the Company pursuant to a management
services agreement with MassMutual.  Fees incurred under the terms of these
agreements were $16.9 million and $13.3 million for the three month periods
ending March 31, 1999 and 1998 respectively.

The Company cedes a portion of its life insurance business to MassMutual and
other insurers in the normal course of business.  The Company has a modified
coinsurance quota-share reinsurance agreement with MassMutual whereby the
Company cedes 75% of the premiums on certain universal life policies.  In
return, MassMutual pays the Company a stipulated expense allowance, death and
surrender benefits, and a modified coinsurance adjustment based upon experience.
The Company retains the assets and related reserves for the payment of future
benefits on ceded policies. In addition to the coinsurance agreement, the
Company also has a stop-loss agreement with MassMutual under which the Company
cedes claims that, in aggregate, exceed 18% of the covered volume for any year,
with maximum coverage of $25.0 million above the aggregate limit.  The Company
paid approximately $0.3 million in premiums to MassMutual under the agreement in
each of the three month periods ending March 31, 1999 and 1998.


3.  SEGMENT INFORMATION
-----------------------

C.M. Life's operations consist of one business segment, which principally sells
universal life insurance, variable life insurance and annuity products.  C.M.
Life is not dependent upon any single customer and no single customer accounted
for more than 10% of revenues for the three month periods ended March 31, 1999
and 1998.

                                       8
<PAGE>
 
                                    PART I
                                    ITEM 2
                     MANAGEMENT'S DISCUSSION AND ANALYSIS
               OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                                        
Management's Discussion and Analysis of Financial Condition and Results of
Operations should be read in conjunction with the statutory financial statements
(Unaudited) and condensed notes to statutory financial statements included
elsewhere in the Form 10-Q and the audited statutory financial statements and
notes thereto, included in C.M. Life's Annual Report on Form 10-K, for the year
ended December 31, 1998.

FORWARD-LOOKING INFORMATION
---------------------------
The Private Securities Litigation Reform Act of 1995 ("the ACT") provides a
"Safe harbor" for forward-looking statements which are identified as such and
are accompanied by the identification of important factors which could cause a
material difference from the forward-looking statements. Certain information
contained in this discussion is or may be considered as forward-looking.
Forward-looking statements are those not based on historical information, but
rather, relate to future operations, strategies, financial results or other
developments, and contain terms such as "may," "expects," "should," "believes,"
"anticipates," "intends," "estimates," "projects," "goals," "objectives" or
similar expressions.  Forward-looking statements are based upon estimates and
assumptions.  These statements may change due to business uncertainties,
economic uncertainties, competitive uncertainties; and other factors, many of
which are beyond the Company's control.  Additionally, Company business
decisions are also subject to change.  The Company does not publicly update or
revise any forward-looking statements, as a result of new information, future
developments or otherwise.


RESULTS OF OPERATIONS
---------------------

For the Three Months Ended March 31, 1999
-----------------------------------------
Compared to the Three Months Ended March 31, 1998
-------------------------------------------------

For the three months ended March 31, 1999, C.M. Life had net income of $5.6
million, as compared with  net income of $6.4 million for the three months ended
March 31, 1998.  The decrease of $0.8 million, or 13%, was primarily
attributable to increases in benefits and expenses and federal income taxes
partially offset by increased premium income.

Premium income, net of reinsurance ceded, increased $13.6 million, or 16%, to
$99.5 million in 1999 from $85.9 million in 1998.  The 16% growth in premiums,
net of reinsurance, is attributable to increased sales of universal and other
life insurance products of 25% and a 10% increase in sales of variable annuity
products over the same period of the prior year.  C.M. Life's business mix is
changing, such that universal and other life insurance product premiums are
increasing at a faster rate than annuity products.  Universal and other life
insurance products comprised 41% of total premium income during the first
quarter of 1999 compared to 38% in 1998, while annuity products were 59% in 1999
compared to 62% in 1998.

The following table sets forth premium and other information for C.M. Life's
products:

<TABLE>
<CAPTION>
                                                                Three Months Ended March 31
                                                               ------------------------------
                                                                 1999                 1998
                                                                 ----                 ----
                                                                        (In Millions)
<S>                                                            <C>                    <C> 
Premium income:                                                
    Universal and other life insurance:                        
      Gross premiums                                             $ 56.3               $ 46.1
      Ceded premiums                                              (15.8)               (13.8)
                                                                 ------               ------
      Net premiums                                                 40.5                 32.3
    Annuities                                                      59.0                 53.6
                                                                 ------               ------
Total premium income                                             $ 99.5               $ 85.9
                                                                 ======               ======
</TABLE> 
 

                                       9
<PAGE>
 
PART I - ITEM 2:  MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)

Net investment income increased $1.2 million, or 6%, to $19.7 million in 1999
from $18.5 million in 1998. This increase reflects growth in invested assets of
8%, partially offset by a 10 basis point decrease in portfolio yields.
Fluctuations in market conditions will impact future investment results.

The components of net investment income are set forth below:

<TABLE>
<CAPTION>
                                           Three Months Ended March 31,
                                           ----------------------------
                                             1999                1998
                                             ----                ----         
                                                   (In Millions)
<S>                                        <C>                   <C> 
Gross investment income:               
     Bonds and preferred stock               $ 13.2              $ 11.8
     Common stock                               0.7                 1.1
     Mortgage loans                             2.4                 2.2
     Policy loans                               2.5                 2.8
     Cash and short-term investments            1.5                 1.2
                                             ------              ------
Total gross investment income                  20.3                19.1
Less:  Investment expenses                     (0.6)               (0.6)
                                             ------              ------
Net investment income                        $ 19.7              $ 18.5
                                             ======              ======
</TABLE>

The annualized yield on total investments before indirect expenses was 7.2% and
7.3% for the periods ended March 31, 1999 and 1998, respectively. After
expenses, net annualized yields were 7.0% and 7.1%, for the periods ended March
31, 1999 and 1998, respectively. The annualized yield on each investment
category, before federal income taxes, is calculated as: (a) two times gross
investment income divided by (b) the sum of assets at the beginning of the year
and assets at the end of the period, less gross investment income, (c)
multiplied by four.

Fees and other income increased $1.2 million, or 200%, to $1.8 million in 1999
from $0.6 million in 1998, primarily due to larger allowances for commissions
and expenses on reinsurance ceded.

Policyholders' benefits and payments increased $37.7 million, or 114%, to $70.7
million in 1999 from $33.0 million in 1998. Surrender benefits on annuity
products increased $35.8 million, the majority of which were withdrawals from
the separate accounts. It is not known if this higher level of surrenders will
continue.

Addition to policyholders' reserves and funds decreased $26.5 million, or 78%,
to $7.6 million in 1999 from $34.1 million in 1998. Addition to policyholders'
reserves and funds includes transfers to and from the separate account based
upon policyholder elections. The $26.5 million decrease is primarily due to a
$37.0 million growth in separate account withdrawals partially offset by higher
separate account deposits. Separate account withdrawals include the annuity
surrenders discussed above. In addition, general account reserves increased,
primarily due to a $6.6 million increase in the growth in annuity reserves and a
$4.3 million increase in the growth in life reserves.

Operating expenses, commissions and state taxes, licenses and fees, increased
$4.6 million, or 18%, to $30.6 million in 1999 from $26.0 million in 1998. The
increase is attributable to higher commissions associated with the volume and
mix of new business and increased management fees charged by MassMutual, which
included increases in agency allowances associated with business growth. The
growth in these expenses is consistent with the premium growth experienced by
the Company.

Federal income tax expense increased $1.0 million, or 18%, to $6.5 million in
1999 from $5.5 million in 1998. Taxable income increased to $18.7 million in
1999 from $15.6 million in 1998. The increase in taxable income is primarily
attributable to the timing of the tax deductibility of acquisition costs.

The Company had no realized capital gains (losses), after the transfer to the
Interest Maintenance Reserve ("IMR"), which captures after tax realized capital
gains and losses due to changes in interest rates for all types of fixed income
investments.

                                       10
<PAGE>
 
PART I - ITEM 2:  MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)

STATEMENT OF FINANCIAL POSITION
-------------------------------

Assets
------

Total assets at March 31, 1999, increased to $2,532.2 million, from $2,530.9
million at December 31, 1998. Invested assets in C.M. Life's general account
portfolio at March 31, 1999, increased by $15.6 million, or 1%, to $1,157.3
million from $1,141.7 million at December 31, 1998, due to in-force business
growth. The portfolio of invested assets is managed to support product
liabilities in light of yield, liquidity and diversification considerations. The
general investment account portfolio does not include C.M. Life's separate
account assets.

Bonds at March 31, 1999, were $674.7 million, representing a decrease of $8.3
million, or 1%, from $683.0 million at December 31, 1998. This decrease was the
result of a switch in investing activity to increased investment in cash and
derivative instruments as discussed below. During the quarter ending March 31,
1999, $75.0 million of bonds were purchased while maturities and sale proceeds
totaled $84.4 million.

Mortgage loans at March 31, 1999, were $132.9 million, representing an increase
of $6.6 million, or 5%, from $126.3 million at December 31, 1998, due to
increased funds available for investment as a result of C.M. Life's expanding
business. During the quarter ending March 31, 1999, $9.6 million of mortgages
were issued while repayments totaled $2.9 million.

Other investments, consisting of financial options, interest rate caps and
floors, preferred stocks, affiliated common stocks and receivable for securities
sold were $79.2 million at March 31, 1999, representing an increase of $2.9
million, or 4%, from $76.3 million at December 31, 1998. This increase is due to
a $2.9 million receivable for securities sold, as compared to zero at December
31, 1998.

Cash and short-term investments at March 31, 1999, were $123.9 million,
representing a increase of $18.2 million, or 17%, from $105.7 million at
December 31, 1998, as a result of increased funds available for investment
provided by operating activities. The Company has increased its investment in a
combination of cash and derivatives as a result of favorable market conditions
in these investments as compared to other investment alternatives.


Liabilities
-----------

Total liabilities at March 31, 1999, decreased slightly to $2,385.8 million from
$2,389.9 million at December 31, 1998. The decrease was caused by a reduction in
separate account liabilities due to increased surrenders, as previously
discussed, partially offset by an increase in policyholders' reserves and funds.

Policyholders' reserves and funds at March 31, 1999 were $1,010.8 million,
representing an increase of $14.5 million, or 2%, from $996.3 million at
December 31, 1998. The increase, primarily attributable to growth from interest
credited and new sales, was partially offset by transfers to separate accounts
and withdrawals.


Shareholder's Equity
--------------------

Shareholder's equity was $146.4 million at March 31, 1999, an increase of $5.4
million, or 4%, from $141.0 million at December 31, 1998. This increase was
primarily composed of net income of $5.6 million.

                                       11
<PAGE>
 
PART I - ITEM 2:  MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)

LIQUIDITY AND CAPITAL RESOURCES
-------------------------------

Liquidity
---------

Net cash provided by operating activities increased $13.9 million, or 232%, to
$19.9 million in 1999 from $6.0 million in 1998. We attribute this increase
primarily to increased deposits to the general account. More specifically, this
increase in the general account cash flows is due to additional net general
account deposits, investment income, and fees from separate accounts, partially
offset by increased general expenses and commissions.

Loans and purchases of investments decreased $142.9 million, or 64%, to $81.8
million in 1999 from $224.7 million in 1998. Sales and maturities of investments
and receipts from repayments of loans decreased $102.6 million, or 56%, to $80.1
million in 1999 from $182.7 million in 1998. We attribute these decreases
primarily to lower purchases and sales of bonds due to changes in market
conditions.


Capital Resources
-----------------

C.M. Life's total adjusted capital as defined by the NAIC was $168.7 million at
March 31, 1999. C.M. Life's total adjusted capital was well in excess of all RBC
standards at March 31, 1999, and December 31, 1998.



                                    PART I
                                    ITEM 3
           QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
                                        
The Company's market risk and financial instrument holdings as of March 31,
1999, are similar to its market risk and financial instrument holdings as of
December 31, 1998, a description of which is included in C.M. Life's Annual
Report on Form 10-K for the year ended December 31, 1998.

                                       12
<PAGE>
 
                                    PART II
                                    ITEM 6

                          C.M. LIFE INSURANCE COMPANY
                       EXHIBITS AND REPORTS ON FORM 8-K
                                MARCH 31, 1999


                                        
(a)  Exhibit Index

          27.  Financial Data Schedule

(b)  Reports on Form 8-K


No reports on Form 8-K were filed by the Registrant with the Securities and
Exchange Commission during the quarter ended March 31, 1999.



                                  SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

                                   C.M. Life Insurance Company
                                             (Registrant)
 
 
Date: May 12, 1999                 By: /s/ Lawrence V. Burkett, Jr.*
     -------------                     ------------------------------
                                       Lawrence V. Burkett, Jr.
                                       Director, President and Chief Executive
                                       Officer (Principal Executive Officer)
 
Date: May 12, 1999                 By: /s/ John Miller, Jr.*
     -------------                    ----------------------
                                      John Miller, Jr.
                                      Vice President and Comptroller
                                      (Chief Accounting Officer)
 
/s/ Richard M. Howe
-------------------
*Richard M. Howe
   On May 12, 1999 as Attorney in Fact, pursuant to
   Power of Attorney.
 

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