<PAGE>

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


                      SECURITIES AND EXCHANGE COMMISSION

                            Washington, D.C. 20549

                              __________________


                                   FORM 10-Q



[X]  Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
     Act of 1934
      For the quarterly period ended June 30, 2000

[ ]  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 0-29788

                    SCOTTISH ANNUITY & LIFE HOLDINGS, LTD.

            (Exact Name of Registrant as Specified in Its Charter)



   Cayman Islands                                       Not Applicable
   (State or Other Jurisdiction of                      (I.R.S. Employer
   Incorporation or Organization)                       Identification No.)

   P.O. Box 10657 APO
   Grand Pavilion Commercial Centre
   802 West Bay Road
   George Town, Grand Cayman
   Cayman Islands, British West Indies                  Not Applicable
   (Address of Principal Executive Offices)             (Zip Code)


Registrant's telephone number, including area code: (345) 949-2800

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
                                                ---          ---

As of August 10, 2000, Registrant had 15,751,740 Ordinary Shares outstanding.


================================================================================
<PAGE>

                               Table of Contents


PART I    FINANCIAL INFORMATION

ITEM 1.   FINANCIAL STATEMENTS

          Condensed Consolidated Balance Sheets - June 30, 2000
          (Unaudited) and December 31, 1999 (note 1)                      2

          Condensed Consolidated Statements of Income - Three and
          Six Months Ended June 30, 2000 (Unaudited) and the Three
          and Six Months Ended June 30, 1999 (Unaudited)                  3

          Condensed Consolidated Statements of Comprehensive Income
          (Loss) - Three and Six Months Ended June 30, 2000
          (Unaudited) and the Three and Six Months Ended June 30,
          1999 (Unaudited)                                                4

          Condensed Consolidated Statements of Shareholders' Equity
          - Six Months Ended June 30, 2000 (Unaudited) and the Six
          Months Ended June 30, 1999 (Unaudited)                          5

          Condensed Consolidated Statements of Cash Flows - Six
          Months Ended June 30, 2000 (Unaudited) and the Six
          Months Ended June 30, 1999 (Unaudited)                          6

          Notes to the Condensed Consolidated Financial Statements
          (Unaudited)                                                     7

ITEM 2.   MANAGEMENT'S DISCUSSION AND ANAYLSIS OF FINANCIAL CONDITION
          AND RESULTS OF OPERATIONS                                      13

ITEM 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK     19

PART II   OTHER INFORMATION

          ITEM 1 through ITEM 4                                          20

          ITEM 5 and ITEM 6                                              21

          SIGNATURES                                                     22
<PAGE>

                                    PART I
                             FINANCIAL INFORMATION
                         Item 1.  Financial Statements
                    Scottish Annuity & Life Holdings, Ltd.
                     Condensed Consolidated Balance Sheets
                       (Stated in United States Dollars)


<TABLE>
<CAPTION>
                                                                        June 30, 2000      December 31, 1999
                                                                         (unaudited)            (note 1)
                                                                        ------------------------------------
<S>                                                                     <C>                <C>
ASSETS
Fixed maturity investments                                              $  515,385,268        $  546,806,744
Cash and cash equivalents                                                   85,977,876            29,000,653
Receivables:
    Reinsurance                                                             61,399,402               298,295
    Risk fees                                                                  659,235               861,552
    Due from investment brokers                                                106,337               109,891
    Accrued interest                                                         5,406,103             5,554,355
    Policy loans                                                               487,484               536,420
Deferred acquisition costs                                                  16,267,320             1,919,528
Present value of inforce business                                           10,801,659            10,619,599
Other assets                                                                   744,678               740,116
Other intangible assets                                                      7,876,057               200,000
Deferred tax benefit                                                         2,588,077             2,218,077
Current income tax receivable                                                  100,934               196,905
Net fixed assets and leasehold improvements                                  1,981,733             1,026,820
Segregated assets                                                          284,043,173           256,545,532
                                                                        ------------------------------------
          Total assets                                                  $  993,825,336        $  856,634,487
                                                                        ====================================
LIABILITIES
Reserves for future policy benefits                                     $  474,462,796        $  365,478,762
Accounts payable and accrued expenses                                        8,573,317             4,347,648
Due to related party                                                         5,288,302            11,601,464
Segregated liabilities                                                     284,043,173           256,545,532
                                                                        ------------------------------------
          Total liabilities                                                772,367,588           637,973,406
                                                                        ------------------------------------

                                                                        ------------------------------------
MINORITY INTEREST                                                       $    2,752,916                   -
                                                                        ------------------------------------

SHAREHOLDERS' EQUITY
Share capital, par value $0.01 per share:
    Issued and fully paid: 15,803,340 ordinary shares as of
          June 30, 2000 and 16,046,740 as of December 31, 1999                 158,033               160,467
    Additional paid in capital                                             225,529,303           227,534,287
Accumulated other comprehensive loss -
    Unrealized depreciation on investments                                 (16,447,571)          (15,684,732)
Retained earnings                                                            9,465,067             6,651,059
                                                                        ------------------------------------
          Total shareholders' equity                                       218,704,832           218,661,081
                                                                        ------------------------------------
          Total liabilities and shareholders' equity                    $  993,825,336        $  856,634,487
                                                                        ====================================
</TABLE>

See notes to the condensed consolidated financial statements

                                      -2-
<PAGE>

                    Scottish Annuity & Life Holdings, Ltd.
                  Condensed Consolidated Statements of Income
                       (Stated in United States Dollars)
                                   Unaudited


<TABLE>
<CAPTION>
                                                            Three Months     Three Months      Six Months       Six Months
                                                             ended June       ended June       ended June       ended June
                                                              30, 2000         30, 1999         30, 2000         30, 1999
                                                           ----------------------------------------------------------------
<S>                                                        <C>              <C>              <C>              <C>
REVENUES
Net premiums & reinsurance fees                            $   3,586,930    $         -      $   3,619,303    $         -
Investment income, net                                        11,331,710        4,124,756       21,096,848        7,446,008
Realized losses on securities, net                               (16,968)        (518,911)        (144,625)      (1,482,824)
Insurance administration and variable fees                       539,483          250,496          989,055          476,280
                                                           ----------------------------------------------------------------
     Total revenues                                           15,441,155        3,856,341       25,560,581        6,439,464

BENEFITS & EXPENSES
Claims and other policy benefits                               7,355,873          319,666       12,631,476          319,666
Acquisition costs and other
  insurance expenses                                           3,106,770          733,537        4,220,947        1,222,001
Operating expenses                                             3,027,808          612,330        4,667,176        1,089,863
                                                           ----------------------------------------------------------------
     Total benefits & expenses                                13,490,451        1,665,533       21,519,599        2,631,530
                                                           ----------------------------------------------------------------
     Net income before provision for federal income taxes  $   1,950,704    $   2,190,808    $   4,040,982    $   3,807,934
                                                           ----------------------------------------------------------------
PROVISION FOR FEDERAL INCOME TAXES
Current                                                                -              -                  -              -
Deferred                                                        (429,627)             -           (370,000)             -
                                                           ----------------------------------------------------------------
                                                                (429,627)             -           (370,000)             -
                                                           ----------------------------------------------------------------
     Net income                                            $   2,380,331    $   2,190,808    $   4,410,982    $   3,807,934
                                                           ================================================================

  Earnings per share, basic and diluted                    $        0.15    $        0.12    $        0.28    $        0.21
                                                           ================================================================
  Dividends declared per share                             $        0.05    $        0.05    $        0.10    $        0.05
                                                           ================================================================
</TABLE>

See notes to the condensed consolidated financial statements

                                      -3-
<PAGE>

                    Scottish Annuity & Life Holdings, Ltd.
       Condensed Consolidated Statements of Comprehensive Income (Loss)
                       (Stated in United States Dollars)
                                   Unaudited


<TABLE>
<CAPTION>
                                                            Three Months     Three Months      Six Months       Six Months
                                                             ended June       ended June       ended June       ended June
                                                             30, 2000          30, 1999         30, 2000         30, 1999
                                                           ----------------------------------------------------------------
<S>                                                        <C>              <C>              <C>              <C>
Net income                                                 $   2,380,331    $   2,190,808    $   4,410,982    $   3,807,934
Other comprehensive income (loss), net of taxes
     Unrealized depreciation on investments:
        Unrealized holding depreciation arising
          during the period                                     (605,234)      (5,822,824)        (907,464)      (9,509,978)
        Add: reclassification adjustment for
          losses included in net income                           16,968          518,911          144,625        1,482,824
                                                           ----------------------------------------------------------------
     Unrealized depreciation on investments                     (588,266)      (5,303,913)        (762,839)      (8,027,154)
                                                           ----------------------------------------------------------------
Comprehensive income (loss)                                $   1,792,065    $  (3,113,105)   $   3,648,143    $  (4,219,220)
                                                           ================================================================
</TABLE>

See notes to the condensed consolidated financial statements

                                      -4-
<PAGE>

                    Scottish Annuity & Life Holdings, Ltd.
           Condensed Consolidated Statements of Shareholders' Equity
                       (Stated in United States Dollars)
                                   Unaudited

<TABLE>
<CAPTION>
                                                             Six Months       Six Months
                                                             ended June       ended June
                                                              30, 2000         30, 1999
                                                           ------------------------------
<S>                                                        <C>              <C>
SHARE CAPITAL:
    Beginning of period                                    $     160,467    $     185,684
    Repurchase of shares                                          (2,434)             -
    Sales to direct investors                                        -                 80
                                                           ------------------------------
                                                                 158,033          185,764
                                                           ------------------------------
ADDITIONAL PAID-IN CAPITAL:
    Beginning of period                                      227,534,287      252,291,320
    Repurchase of shares                                      (2,016,872)             -
    Sales to direct investors                                        -             87,920
    Issuance of equity options                                    11,888           75,488
                                                           ------------------------------
                                                             225,529,303      252,454,728
                                                           ------------------------------
ACCUMULATED OTHER COMPREHENSIVE LOSS:
    Beginning of period                                      (15,684,732)        (853,146)
    Unrealized depreciation on investments                      (762,839)      (8,027,153)
                                                           ------------------------------
                                                             (16,447,571)      (8,880,299)
                                                           ------------------------------
RETAINED EARNINGS:
    Beginning of period                                        6,651,059          436,321
    Net income                                                 4,410,982        3,807,934
    Dividends paid                                            (1,596,974)        (928,822)
                                                           ------------------------------
                                                               9,465,067        3,315,433
                                                           ------------------------------
TOTAL SHAREHOLDERS' EQUITY                                 $ 218,704,832    $ 247,075,626
                                                           ==============================

</TABLE>

See notes to the condensed consolidated financial statements

                                      -5-
<PAGE>

                    Scottish Annuity & Life Holdings, Ltd.
                Condensed Consolidated Statements of Cash Flows
                       (Stated in United States Dollars)
                                   Unaudited

<TABLE>
<CAPTION>
                                                              Six Months         Six Months
                                                              ended June         ended June
                                                               30, 2000           30, 1999
                                                           ----------------------------------
<S>                                                        <C>                <C>
OPERATING ACTIVITIES
Net income                                                 $   4,410,982       $   3,807,934
Adjustments to reconcile net income to net cash
  provided by (used in) operating activities:
    Net realized losses on securities                            144,625           1,482,825
    Non cash salaries and professional fees                       11,888             163,488
    Depreciation                                                 162,239              27,633
    Amortization of deferred acquisition costs                 1,476,198              24,014
    Amortization of PVIF                                          33,600                 -
    Net change in policy benefit reserves                     11,067,616                 -
    Changes in assets and liabilities:
       Reinsurance receivables                               (61,101,107)       (102,663,907)
       Risk fees                                                 202,317                 -
       Policy loans                                               48,936                 -
       Other receivables                                         174,390           2,321,932
       Deferred acquisition costs                            (15,823,990)         (1,798,656)
       Present value of inforce business                        (215,660)                -
       Other assets                                               (4,562)            104,296
       Deferred tax benefit                                     (370,000)                -
       Current income tax receivable                              95,971                 -
       Accounts payable and accrued expenses                   4,223,169          (1,166,520)
       Due to related party                                   (6,563,162)           (326,900)
                                                           ---------------------------------
Net cash provided by (used in) operating activities          (62,026,550)        (98,023,861)
                                                           ---------------------------------
INVESTING ACTIVITIES
Purchase of securities                                       (82,010,108)       (470,629,087)
Proceeds on sales of securities                              112,753,337         399,993,389
Acquisition of majority interest in subsidiary
  net of cash acquired                                           256,531                 -
Purchase of intangible assets                                 (5,178,973)                -
Purchase of fixed assets & leasehold improvements             (1,117,152)           (579,964)
                                                           ---------------------------------
Net cash provided by (used in) investing activities           24,703,635         (71,215,662)
                                                           ---------------------------------
FINANCING ACTIVITIES
Deposits to insurance accounts                               114,563,046         104,027,579
Withdrawals from insurance accounts                          (16,646,628)                -
Net cost of repurchase of company stock                       (2,019,306)                -
Dividends paid                                                (1,596,974)           (928,822)
                                                           ---------------------------------
Net cash provided by financing activities                     94,300,138         103,098,757
                                                           ---------------------------------
NET CHANGE IN CASH AND CASH EQUIVALENTS                       56,977,223         (66,140,766)
Cash and cash equivalents, beginning of period                29,000,653          69,610,299
                                                           ---------------------------------
CASH AND CASH EQUIVALENTS, END OF PERIOD                   $  85,977,876       $   3,469,533
                                                           =================================
</TABLE>

See notes to the condensed consolidated financial statements

                                      -6-
<PAGE>

                    Scottish Annuity & Life Holdings, Ltd.
     Notes to the Condensed Consolidated Financial Statements (Unaudited)
                                 June 30, 2000


1.   Basis of presentation

Accounting Principles - The accompanying unaudited condensed consolidated
financial statements have been prepared in accordance with generally accepted
accounting principles ("GAAP") for and with the instructions to Form 10-Q and
Article 10 of Regulation S-X.  Accordingly, they do not include all of the
information and footnotes required by GAAP for complete financial statements.
In the opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been included.  The
results for the period are not necessarily indicative of the results to be
expected for the entire year.

The comparative consolidated balance sheet as of December 31, 1999 has been
derived from the audited consolidated financial statements for the period ended
December 31, 1999.

For further information, refer to the consolidated financial statements and
footnotes included in our annual report on Form 10-K for the period ended
December 31, 1999.

We have reclassified some figures from our 1999 financial statements to conform
with our 2000 presentation.  These reclassifications had no effect on net income
or shareholders'equity as previously reported.


2.   Minority Interest


During the quarter, we acquired a majority holding in Scottish Crown Group
(Bermuda) Ltd. No amount of the resulting minority interest is held in preferred
shares and therefore, we have no dividend requirement in relation to this
minority interest.

                                      -7-
<PAGE>

                    Scottish Annuity & Life Holdings, Ltd.
     Notes to the Condensed Consolidated Financial Statements (Unaudited)
                           June 30, 2000 (continued)


3.   Earnings per ordinary share

Basic earnings per share ("EPS") excludes the dilutive effect of options and
warrants.  Diluted EPS includes the dilutive effect of these securities using
the treasury stock method.  The weighted-average number of shares is calculated
by weighting how long the shares have been outstanding over the accounting
period.

The dilutive impact of our warrants and options is not material and therefore,
has no effect on EPS.

<TABLE>
<CAPTION>

                                                            Three Months     Three Months      Six Months       Six Months
                                                               Ended            Ended            Ended            Ended
                                                           June 30, 2000    June 30, 1999    June 30, 2000    June 30, 1999
                                                           ----------------------------------------------------------------
<S>                                                        <C>              <C>              <C>              <C>
Numerator:

Net income                                                 $   2,380,331    $   2,190,808    $   4,410,982    $   3,807,934

Denominator:

     Denominator for basic earnings per share -
       Weighted average number of shares                      15,986,037       18,576,440       16,016,388       18,574,981

     Effect of dilutive securities-
       Stock options                                              16,741              -             12,761              -

Denominator for dilutive earnings per share                   16,002,778       18,576,440       16,029,149       18,574,981

Basic earnings per ordinary share                          $        0.15    $        0.12    $        0.28    $        0.21

Diluted earnings per share                                 $        0.15    $        0.12    $        0.28    $        0.21

Actual shares outstanding                                     15,803,340       18,576,440       15,803,340       18,576,440

</TABLE>

                                      -8-
<PAGE>

                    Scottish Annuity & Life Holdings, Ltd.
     Notes to the Condensed Consolidated Financial Statements (Unaudited)
                           June 30, 2000 (continued)


4.   Segment Reporting

Income from insurance operations is split into three lines of business:
traditional reinsurance, non-traditional reinsurance (previously called
reinsurance) and variable products.

The segment reporting for the lines of business is as follows:

<TABLE>
<CAPTION>
                                                            Three Months     Three Months      Six Months       Six Months
                                                           ended June 30,   ended June 30,   ended June 30,   ended June 30,
                                                               2000             1999             2000             1999
                                                           ----------------------------------------------------------------
   REVENUES FROM EXTERNAL CUSTOMERS
<S>                                                        <C>              <C>              <C>              <C>
Variable products                                          $     539,483    $     250,495    $     989,055    $     476,280
Traditional reinsurance                                        1,490,642              -          1,490,642              -
Non-traditional reinsurance                                   11,380,399          612,372       18,623,945          934,872
Other                                                          2,030,631        2,993,474        4,456,939        5,028,312
                                                           ----------------------------------------------------------------
Total                                                      $  15,441,155    $   3,856,341    $  25,560,581    $   6,439,464
                                                           ================================================================
   NET INCOME BY SEGMENT

Variable products                                          $     427,582    $     199,115    $     779,898    $     353,778
Traditional reinsurance                                          484,621              -            139,957              -
Non-traditional reinsurance                                    2,465,305         (389,451)       3,599,770         (250,066)
Other                                                           (997,177)       2,381,144         (108,643)       3,704,222
                                                           ----------------------------------------------------------------
Total                                                      $   2,380,331    $   2,190,808    $   4,410,982    $   3,807,934
                                                           ================================================================

   ASSETS BY SEGMENT                                          June 30,       December 31,
                                                                2000            1999
                                                           ------------------------------
Variable products                                          $ 295,568,525    $ 268,174,719
Traditional reinsurance                                        5,616,327              -
Non-traditional reinsurance                                  510,289,650      407,057,362
Other                                                        182,350,834      181,402,406
                                                           ------------------------------
Total                                                      $ 993,825,336    $ 856,634,487
                                                           ==============================
</TABLE>

                                      -9-
<PAGE>

                    Scottish Annuity & Life Holdings, Ltd.
     Notes to the Condensed Consolidated Financial Statements (Unaudited)
                           June 30, 2000 (continued)


5.   Stock Option Plans

The Company has two stock option plans (the "1998 Plan" and the "1999 Plan")
which allow us to grant non-statutory options, subject to certain restrictions,
to certain eligible employees, non-employee Directors, advisors and consultants.
The minimum exercise price of the options will be equal to the fair market
value, as defined in the plans, of our ordinary shares at the date of grant. The
term of the options shall not be more than ten years from the date of grant.
Unless otherwise provided in the option agreement, the options shall become
exercisable in three equal annual installments, commencing on the first
anniversary of the grant date.

Option activity under the 1998 Plan is as follows:

<TABLE>
<CAPTION>

                                                                                                       Weighted average
                                                                                                          exercise
                                                           Options available             Number of     price of options
                                                               for grant                  options        outstanding
                                                           ------------------------------------------------------------
<S>                                                        <C>                   <C>                   <C>
Balance May 12, 1998*                                                      -                     -                    -
Authorized                                                         1,600,000                     -                    -
Granted                                                           (1,070,000)            1,070,000        $     15.0000
Exercised                                                                  -                     -                    -
Cancelled                                                                  -                     -                    -
                                                           -----------------      ----------------      ---------------
Balance December 31, 1998                                            530,000             1,070,000        $     15.0000

Authorized                                                                 -                     -                    -
Granted                                                             (545,600)              545,600        $     15.0000
Exercised                                                                  -                     -                    -
Cancelled                                                            233,333              (233,333)       $     15.0000
                                                           -----------------      ----------------      ---------------
Balance December 31, 1999                                            217,733             1,382,267        $     15.0000

Authorized                                                                 -                     -                    -
Granted                                                             (400,000)              400,000 (1)    $      7.7500
Exercised                                                                  -                     -                    -
Cancelled                                                            500,000              (500,000)(2)    $     15.0000
                                                           -----------------      ----------------      ---------------
Balance June 30, 2000                                                317,733             1,282,267        $     12.7384
                                                           =================      ================      ===============
</TABLE>

 *   Date of incorporation
(1)  400,000 options granted to Scott Willkomm upon execution of employment
     agreement.
(2)  300,000 cancelled upon the resignation of Peter Presperin and 200,000
     cancelled upon the resignation of Henryk Sulikowski.


75,000 options were granted to Larry Stern as of August 1, 2000 upon execution
of employment agreement at an exercise price of $8.75.

                                     -10-
<PAGE>

                    Scottish Annuity & Life Holdings, Ltd.
     Notes to the Condensed Consolidated Financial Statements (Unaudited)
                           June 30, 2000 (continued)


5.   Stock Option Plans (continued)

     Option activity under the 1999 Plan is as follows:

<TABLE>
<CAPTION>
                                                                                                  Weighted
                                                                                              average exercise
                                                     Options                                        price
                                                  available for           Number of              of options
                                                      grant                options               outstanding
                                                  ------------------------------------------------------------
<S>                                               <C>                    <C>                  <C>
Balance December 31, 1998                                     -                   -                          -
Authorized                                              750,000                   -                          -
Granted                                                (325,000)            325,000               $     8.0625
Exercised                                                     -                   -                          -
Cancelled                                                     -                   -                          -
                                                  -------------           ---------            ---------------
Balance December 31, 1999                               425,000             325,000               $     8.0625

Authorized                                                    -                   -                          -
Granted                                                 (62,500)             64,500   (1)         $     7.7240
Exercised                                                     -                   -                          -
Cancelled                                               120,000            (120,000)  (2)         $     8.0625
                                                  -------------           ---------            ---------------
Balance June 30, 2000                                   482,500             269,500               $     7.9835
                                                  =============           =========            ===============
</TABLE>

(1)  62,500 options granted to new employees of Scottish Re (U.S.), Inc., having
     a term of 7 years and 2,000 shares granted to new employees of Scottish
     Annuity & Life Insurance Company (Cayman) Ltd. having a term of 10 years.

(2)  120,000 options cancelled upon the resignation of Henryk Sulikowski.


                                     -11-
<PAGE>

                    Scottish Annuity & Life Holdings, Ltd.
     Notes to the Condensed Consolidated Financial Statements (Unaudited)
                           June 30, 2000 (continued)


5.   Stock Option Plans (continued)

In addition to the Company's stock option plans, 750,000 options were authorized
to be issued to new employees of Scottish Re (U.S.), Inc., our U.S. operations,
by the Board of Directors at an exercise price to be determined on the date of
the grant. The term of the  options are seven years from the date of grant. The
options are  exercisable in three equal annual installments, commencing on the
first  anniversary of the grant date. Options have  been granted to new
employees of our U.S. operations, pursuant to a resolution  of the Board of
Directors, at an exercise price equal to the fair market value  of our ordinary
shares at the date of the grant. The options that have been granted are
reflected in the chart below.

<TABLE>
<CAPTION>
                                                                                                   Exercise price
                                               Options available              Number of             of options
                                                   for grant                   options              outstanding
                                               ------------------------------------------------------------------
<S>                                            <C>                            <C>                  <C>
Balance December 31, 1998                                      -                      -                         -
Authorized                                               750,000                      -                         -
Granted                                                 (586,000)               586,000                   $8.1117
Exercised                                                      -                      -                         -
Cancelled                                                      -                      -                         -
                                                 ---------------              ---------              ------------
Balance December 31, 1999                                164,000                586,000                   $8.1117

Authorized                                                     -                      -                         -
Granted                                                 (157,000)               157,000                   $8.2325
Exercised                                                      -                      -                         -
Cancelled                                                      -                      -                         -
                                                 ---------------              ---------              ------------
Balance June 30, 2000                                      7,000                743,000                   $8.1367
                                                 ===============              =========              ============
</TABLE>


Summarizing the information above, the company has authorized a total of
3,100,000 options.  Of those authorized, 2,369,767 have been granted, leaving
730,233 available for grant.  The average exercise price of all options granted
is $10.6286.

                                     -12-
<PAGE>

                    Scottish Annuity & Life Holdings, Ltd.
               Management's Discussion and Analysis of Financial
                      Condition and Results of Operations



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

General


Scottish Annuity & Life Holdings, Ltd. ("Scottish Holdings", "we", "us", "our",
or "the Company") completed its initial public offering ("IPO") on November 30,
1998. Our principal assets include the direct or indirect ownership of Scottish
Annuity & Life Insurance Company (Cayman) Ltd. ("Scottish Insurance"), Scottish
Holdings, Inc., Scottish Holdings (Barbados) Limited, Scottish Re (U.S.), Inc.
("Scottish Re") (formerly Harbourton Reassurance, Inc.), The Scottish Annuity
Company (Cayman) Ltd. ("Scottish Annuity"), and a 50.01% share of Scottish Crown
Group (Bermuda) Limited ("Scottish Crown"). Scottish Insurance was formed in
1998 as an offshore company principally to provide reinsurance of life and
annuity products and to issue customized variable life insurance products to
high net worth individuals and families. Scottish Annuity provides customized
variable annuity products to high net worth individuals and families. Scottish
Re, a Delaware insurance company, which is licensed in 15 states and admitted as
a reinsurer in an additional 13 states, provides us with a U.S. based platform
to provide reinsurance products. Scottish Crown was formed to provide customized
variable life and annuity insurance products to high net worth individuals and
families.

                                     -13-
<PAGE>

                    Scottish Annuity & Life Holdings, Ltd.
               Management's Discussion and Analysis of Financial
                Condition and Results of Operations (continued)


Overview

Three months ended June 30, 2000 compared to the three months ended June 30,
----------------------------------------------------------------------------
1999
----

Our net income for the second quarter of $2,380,331 or $0.15 per share was
driven by revenues from our investment portfolio, reinsurance operations, and
insurance administration fees. Net income, when compared to the second quarter
of the prior year, changed primarily due to the following factors: (1) Net
premiums and reinsurance fees increased from $0 to approximately $3.6 million as
a result of new reinsurance transactions, (2) Net investment income increased
from approximately $4.1 million to $11.3 million as a result of invested assets
from reinsurance growing from $0 to over $450 million, (3) Net realized losses
on securities in the second quarter of 1999 of approximately $519,000 were
primarily due to portfolio restructuring, whereas no restructuring was done in
the second quarter of 2000, (4) Insurance administration and variable life fees
increased from approximately $250,000 to $540,000 due primarily to increases in
variable account balances and the purchase of Scottish Annuity, resulting in
100% of the fee income reverting to us, (5) Claims and other policy benefits
were approximately $320,000 in the first quarter 1999 and approximately $7.4
million in the second quarter 2000 as a result of new reinsurance treaties, (6)
Acquisition costs and other insurance expenses increased from approximately
$734,000 to $3.1 million and operating expenses increased from approximately
$612,000 to $3.0 million as a result of increased reinsurance activity and the
implementation of our U.S. reinsurance operations through Scottish Re. Of these
expenses, $900,000 consisted of non-recurring employee expenses related to four
employees, including severance, recruiting and relocation expenses and (7) As a
result of losses on a tax basis in Scottish Re, the deferred tax asset increased
by approximately $430,000.


                                     -14-
<PAGE>

                    Scottish Annuity & Life Holdings, Ltd.
               Management's Discussion and Analysis of Financial
                Condition and Results of Operations (continued)


Six months ended June 30, 2000 compared to the six months ended June 30, 1999
-----------------------------------------------------------------------------

Our net income for the first six months of 2000 of $4,410,982 or $0.28 per share
was driven by revenues from our investment portfolio, reinsurance operations,
and insurance administration fees. Net income, when compared to first six months
of the prior year, changed primarily due to the following factors: (1) Net
premiums and reinsurance fees increased from $0 to approximately $3.6 million as
a result of new reinsurance transactions, (2) Net investment income increased
from approximately $7.4 to $21.1 million as a result of invested assets from
reinsurance growing from $0 to over $450 million, (3) Net realized losses on
securities in the first six months of 1999 of approximately $1.4 million were
primarily due to portfolio restructuring, whereas no restructuring was done in
the first six months of 2000, (4) Insurance administration and variable life
fees increased from approximately $475,000 to $990,000 due primarily to
increases in variable account balances and the purchase of Scottish Annuity,
resulting in 100% of the fee income reverting to us, (5) Claims and other policy
benefits were approximately $320,000 in the first six months of 1999 and
approximately $12.6 million in the first six months of 2000 as a result of new
reinsurance treaties and (6) Acquisition costs and other insurance expenses
increased from approximately $1.2 to $4.2 million and operating expenses
increased from approximately $1.1 to $4.6 million as a result of increased
reinsurance activity and the implementation of our U.S. reinsurance operations
through Scottish Re. Of these expenses, $900,000 consisted of non-recurring
employee expenses related to four employees, including severance, recruiting and
relocation expenses.

Three months ended June 30, 2000 compared to the three months ended March 31,
-----------------------------------------------------------------------------
2000
----

Our net income for the second quarter of 2000 of $2,380,331 or $0.15 per share
increased from $2,030,651 or $0.13 per share in the first quarter of 2000. The
increase in income was primarily due to the following factors: (1) Net premiums
and reinsurance fees increased from approximately $32,000 to approximately $3.6
million as a result of new reinsurance transactions, (2) Net investment income
increased from approximately $9.8 to $11.3 million as a result of invested
assets from reinsurance growing from $350 to over $450 million, (3) Insurance
administration and variable life fees increased from approximately $450,000 to
$540,000 due to increases in variable account balances, (4) Claims and other
policy benefits were approximately $5.2 million in the first quarter of 2000 and
approximately $7.3 million in the second quarter of 2000 as a result of new
reinsurance treaties and (6) Acquisition costs and other insurance expenses
increased from approximately $1.1 to $3.1 million and operating expenses
increased from approximately $1.6 to $3.0 million as a result of increased
reinsurance transactions. Of the expenses in the second quarter, $900,000
consisted of non-recurring employee expenses related to four employees,
including severance, recruiting and relocation expenses.


                                     -15-
<PAGE>

                     Scottish Annuity & Life Holdings, Ltd.
               Management's Discussion and Analysis of Financial
                Condition and Results of Operations (continued)


Investments

Our investment portfolio is managed by two professional investment managers,
General Re - New England Asset Management, Inc. and Prudential Investment
Corporation. Our investment guidelines are designed to diversify the portfolio
to maximize investment income while minimizing risk.  At June 30, 2000, the
portfolio had an average quality rating of AA, an average duration of 2.42 years
and an average book yield of 6.96%. This compares with an average quality rating
of AA, an average duration of 2.98 years and an average book yield of 6.79%
respectively at December 31, 1999.  A realized loss of $144,625 and net
unrealized depreciation of $762,839 were recognized on investments during the
first six months.  A realized loss of $16,968 and net unrealized depreciation of
$588,266 were recognized on investments during the second quarter.

Insurance Operations

Our business consists of three lines of business: traditional, non-traditional
and variable products. Our results reflected revenues from these lines of
business. Since January 1, 2000, in the non-traditional line, we closed on three
reinsurance transactions, that have generated approximately $100 million of
assumed reserves and are expected to generate an additional $50 million of
assumed reserves by year end 2000. As these transactions represent the
assumption of existing reserves for past sales of the ceding company, we account
for the initial assumption on the balance sheet only. Future operations will
include the renewal premiums, benefits and underwriting expense including the
amortization of the acquisition costs related to the initial assumptions. One
treaty was effective February 15th, the others were effective April 1, 2000. In
the traditional life line in the second quarter, we collected approximately $1.5
million of premium on traditional life reinsurance. As of June 30, 2000 we
reinsure approximately $1 billion of life coverage on 25,000 lives. The average
benefit coverage per life is $40,000 and the maximum retention on any one life
is $1 million. Since the beginning of the second quarter, we have signed 5
binders for traditional life reinsurance. These binders and the closed
transactions are expected to create approximately $10 billion of life
reinsurance volume and $14 million of collected premium during 2000. However, no
assurance can be given that these expectations can be achieved. In the variable
products line, we received $9 million of deposits from variable life sales in
the quarter, and subsequently have received an additional $16 million of
deposits.

In addition, Scottish Insurance entered into a joint venture with Crown Capital
Investors, LLC, a Delaware limited liability company ("Crown") to form Scottish
Crown.  Scottish Insurance paid $5.25 million for its share of Scottish Crown.
Scottish Crown will provide customized variable life and annuity insurance
products to high net worth individuals and families. Scottish Crown owns two
Bermuda licensed insurance companies, and has a 10 year exclusive distribution
agreement with Crown World Services Ltd., a Bermuda company.


                                     -16-
<PAGE>

                    Scottish Annuity & Life Holdings, Ltd.
               Management's Discussion and Analysis of Financial
                Condition and Results of Operations (continued)


Capital Resources and Liquidity

At June 30, 2000, total capitalization was $218,947,132. We have no material
commitments for capital expenditures and do not anticipate incurring material
indebtedness other than letters of credit or lines of credit, which may be
required in the ordinary course of our reinsurance business.

During the first six months of 2000, we paid a dividend of $0.05 per share, or
$802,337 to shareholders of record as of March 6, 2000, and a dividend of $0.05
per share, or $794,637 to shareholders of record as of June 6, 2000.

Through June 30, 2000 we repurchased 243,400 shares for $2,026,204 (average
price of $8.33 per share), and through August 10, 2000 we have repurchased an
additional 51,600 shares, resulting in an aggregate repurchase to date of
295,000 shares for $2,487,462 (average price of $8.43 per share) under a program
authorized by the Board on April 6, 2000 to repurchase up to $20 million of
outstanding shares.

We expect that our cash and investments, together with cash generated from our
businesses, will provide sufficient sources of liquidity and capital to meet our
needs for the next several years.  In addition, we have access to a combined $70
million through available lines and letters of credit, of which approximately
$15.5 million is currently being utilized under a letter of credit in support of
our non-traditional reinsurance business.


                                     -17-
<PAGE>

                    Scottish Annuity & Life Holdings, Ltd.
               Management's Discussion and Analysis of Financial
                Condition and Results of Operations (continued)


Forward Looking Statements

Some of the statements contained in this report are not historical facts and are
forward-looking within the meaning of the Private Securities Litigation Reform
Act.  Forward-looking statements involve known and unknown risks, uncertainties
and other factors, which may cause the actual results to differ materially from
the forward-looking statements.  When used, the words "may", "will", "expect",
"anticipate", "continue", "estimate", "project", "plan", "intend" and similar
expressions identify forward-looking statements.  These forward-looking
statements involve risks and uncertainties including, but not limited to, the
following: our ability to execute the business plan; changes in the general
economic conditions including the performance of the financial markets and
interest rates; changes in insurance regulations or taxes; changes in rating
agency policy; the loss of key executives; trends in the insurance and
reinsurance industries; government regulations; trends that may affect our
financial condition or results of operations; and the declaration and payment of
dividends.  Potential investors are cautioned that any forward-looking
statements are not guarantees of future performance and are subject to risks and
uncertainties. Actual results may differ materially from those included within
the forward-looking statements as a result of various factors. Factors that
could cause or contribute to such differences include, but are not limited to,
those described under the heading "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and under the heading "Risk
Factors of Investing in our Ordinary Shares" set forth in our Annual Report on
Form 10-K filed with the Securities and Exchange Commission. We assume no
obligation to update any forward-looking statement to reflect actual results or
changes in or additions to the factors affecting such forward-looking
statements.


                                     -18-
<PAGE>

                    Scottish Annuity & Life Holdings, Ltd.
               Management's Discussion and Analysis of Financial
                Condition and Results of Operations (continued)


Risk Factors of Investing in Our Ordinary Shares

Investing in our Ordinary Shares involves a high degree of risk.  Prior to
investing in the Ordinary Shares, potential investors should consider carefully
the risk factors set forth in our Annual Report on Form 10-K filed with the
Securities and Exchange Commission, in addition to the other information set
forth in this Form 10-Q.

Item 3.   Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes since December 31, 1999. Please refer to
"Item 7A: Quantitative and Qualitative Disclosures About Market Risk" in our
Annual Report on Form 10-K.


                                     -19-
<PAGE>

                                    PART II
                               OTHER INFORMATION

Item 1.   Legal Proceedings

The Company is not currently involved in any litigation or arbitration.

Item 2.   Changes in Securities and Use of Proceeds

Not applicable.

Item 3.   Default Upon Senior Securities

Not applicable.

Item 4.   Submission of Matters to a Vote of Securities Holders

The 2000 Annual Meeting of Shareholders of the Company was held on June 7, 2000.
The following items of business were presented to the shareholders of the
Company (the "Shareholders"):

                             Election of Directors

     The two directors were elected as proposed in the Proxy Statement dated May
1, 2000 under the caption titled "Proposal for Election of Directors" as
follows:


                                 Total Vote          Total Vote
                                     For            Withheld From
Name                            Each Director       Each Director
----                            -------------       -------------

Michael Austin                     11,683,497             288,700
Scott E. Willkomm                  11,685,197             287,000


                     Ratification of Independent Auditors

     The selection by the Board of Directors, upon the recommendation of the
Audit Committee, of Ernst & Young as the independent auditors for the Company
for the fiscal year ending December 31, 2000 was ratified by the Shareholders by
a vote of 11,711,442 for ratification, 257,755 against, and 3,000 abstaining.


                                     -20-
<PAGE>

Item 5.    Other Information

Not applicable.


Item 6.    Exhibits and Reports on Form 8-K

           (a)   Exhibits.

Except as otherwise indicated, the following Exhibits are filed herewith and
made a part hereof:

Exhibit
Number     Description of Document
------     -----------------------

27.1       Financial Data Schedule

           (b)   Reports on Form 8-K

                 (1)  The Company filed a Report on Form 8-K on January 18, 2000
                      to report that the Company acquired all of the issued and
                      outstanding shares of common stock of The Scottish Annuity
                      Company (Cayman) Ltd.

                 (2)  The Company filed a Report on Form 8-K/A on March 20, 2000
                      to file the financial statements of The Scottish Annuity
                      Company (Cayman) Ltd. and the Pro Forma Combined Condensed
                      Financial Statements.


                                     -21-
<PAGE>

     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.


                              SCOTTISH ANNUITY & LIFE HOLDINGS, LTD.

Date: August 10, 2000         By: /s/  Michael C. French
                                  ----------------------------------------------
                                  Michael C. French
                                  Chief Executive Officer


Date: August 10, 2000         By: /s/ Bruce J. Crozier
                                  ----------------------------------------------
                                  Bruce J. Crozier
                                  Senior Vice President-Chief Financial Officer
                                  and Secretary (Principal Financial Officer and
                                  Principal Accounting Officer)


                                     -22-
<PAGE>

EXHIBIT INDEX



EXHIBIT
SEQUENTIAL
NUMBER
PAGE NO.           DESCRIPTION OF DOCUMENT
--------           -----------------------

27.1               Financial Data Schedule


                                     -23-