Exhibit 99
                          Risk Management
                          ---------------

Disclosure - General Comment
----------------------------

     When used or incorporated by reference in disclosure documents, the words
"anticipate", "estimate", "expect", "project", "target", "goal" and similar 
expressions are intended to identify forward-looking statements within the 
meaning of Section 27A of the Securities Act of 1933.  These forward-looking 
statements are subject to certain uncertainties, risks and assumptions.  
Should one or more of these risks or uncertainties materialize, or should 
underlying assumptions prove to be inaccurate, the actual results may vary 
materially from those anticipated, estimated, expected or projected.  
Additionally, these forward-looking statements are relevant only as of the 
date of the document.  The Company's management expressly disclaims any 
obligation to publicly release updates or revisions to any forward-looking 
statement contained herein to reflect changes in the Company's expectations 
with regard to any change in events, conditions or circumstances on which any 
such statement is based.

Market Risk
-----------

     Generally, market risk represents the risk of loss that may occur due to 
potential changes in a financial instrument's valuation or cash flow due to 
changes in interest rates, currency exchange rates, and in equity and 
commodity prices.  Market risk is inherent to both derivative and 
non-derivative financial instruments.

General Risk Management Procedures
----------------------------------

     The Company's Investment Committee has oversight responsibilities for all 
operational and other matters that affect the Company's day-to-day investment 
activities.  The Investment Committee monitors the market risk faced by the 
Company's various entities and portfolios.  The asset and liability management 
strategy are formulated and monitored by the Investment Committee.  The 
Committee meets monthly to review, among other things, statements detailing 
the Company's market risks and trends, portfolio holdings at book and market 
value, equity exposure and surplus positions, and interest rate scenario 
stress tests.  The stress testing provides insights into the sensitivity of 
the assets to interest rate changes.  The committee is comprised of the Chief 
Executive Officer, Chief Investment Officer, Chief Financial Officer and other 
senior executives.  The Company also conducts extensive cash flow testing on 
an annual basis for the Farmers Life book of business.  This review examines 
the adequacy of reserves under various interest rate environments.  The 
Company examines the asset and liability matching throughout the year using 
quarterly scenario tests and monthly asset duration reports.  This committee 
also reviews investment policies and procedures and makes recommendations to 
the Board of Directors of the Company based upon the results of their review.

     In addition, Farmers Life's Interest Committee has responsibility for 
managing spreads between rates credited on interest-sensitive products and 
portfolio earnings rates.  The Interest Committee is comprised of the 
following Farmers Life personnel: President, Actuary, Treasurer, VP-Insurance 
Operations, VP-Staff Operations, AVP-Information Systems, AVP-Annuities and 
Life Marketing Director.

     The Company has contracted with the Scudder Kemper Investments, Inc. 
("SKI") for the purpose of providing investment advice, trade execution and 
other investment related services.  

     SKI utilizes a number of market risk management tools including, but not 
limited to, fixed income securities interest rate sensitivity analysis, 
following established limits on trading activity and asset allocation, marking 
all equity positions to market on a daily basis, marking all fixed income 
positions to market at least monthly and analyzing investment profit and loss 
statements and investment holding asset class mix reports.  Additionally, SKI 
reports positions, profits and losses, credit quality evaluation results and 
trading strategies, including the period's acquisitions and dispositions to 
the Investment Committee on a monthly basis.  The Company believes that these 
procedures, which focus on meaningful communication between SKI and the 
Company's senior management, are one of the most important elements of the 
risk management process.

     Although the Company has a number of procedures to reduce the level of 
exposure to interest rate risk and equity price risk, the Company continues 
to remain vulnerable to both of these market risks.  There can be no assurance 
that the Company will not experience changes in stockholders' equity, net 
income and net interest income during periods of increasing or decreasing 
interest rates and/or equity prices.

     At this time, the Company's management is reviewing the viability of 
adding an equity investment portfolio within Farmers Life.  The Company's 
management is also considering entrance into underwriting variable annuity 
products.  Both of these activities could add significant equity price risk 
to existing operations in the future. 

     The Company's management does not anticipate any significant changes in 
the way it currently manages market risks. 

Primary Market Risk Exposures
-----------------------------

     The Company's exposure to market risk is primarily attributable to the 
interest rate risk and equity price risk inherent in the Company's investment 
related activities and in the Company's annuity product underwriting 
activities.  To a lesser extent, the Company has exposure to interest rate risk
as a result of its issuance of Cumulative Quarterly Income Preferred 
Securities ("QUIPS").

     A description of the Company's primary market risk exposures as of 
December 31, 1998 and a brief narrative explaining how each exposure is 
currently being managed follows:

Interest Rate Risk
------------------

     The Company has significant exposure to interest rate risk primarily as 
a result of maintaining an investment portfolio which includes interest rate 
sensitive financial instruments and as a consequence of underwriting interest 
rate sensitive annuity products.  Therefore, the Company exposes itself to 
interest rate risk, arising from changes in the level or volatility of 
interest rates, mortgage prepayment speeds or the shape and slope of the yield 
curve.  Additionally, the fair value of the Company's QUIPS has exposure to 
interest rate risk.  

     In general, the fair values of fixed-rate financial instruments have an 
inverse correlation to changes in interest rates.  Therefore, an increase in 
interest rates could result in an unfavorable or untimely decrease in the 
market value of the Company's fixed income investments.  Furthermore, the 
Company has classified all of its marketable fixed income investments as 
available-for-sale as defined by SFAS No. 115, with the exception of $53.0 
million in 1998 which relate to a grantor trust and are classified as trading 
securities as defined by SFAS No. 115.  The available-for-sale fixed income 
investments are reported on the balance sheet at market value, with unrealized 
gains and losses, net of tax, excluded from earnings and reported as a 
component of stockholders' equity.  The trading investments are reported on 
the "Other assets" line of the balance sheet at market value with both 
realized and unrealized gains and losses included in earnings, net of tax, in 
the year in which they occur.  As such, an increase in interest rates could 
adversely affect the Company's stockholders' equity. 

     Generally, the change in fair value of the Company's QUIPS (see Note G), 
BAFS notes receivable (see Note T) and investments in certificates of 
contribution and the surplus note of the P&C Group (see Note F) that may arise 
due to changes in interest rates would not be reflected in the Company's 
consolidated financial statements, since these financial instruments are not 
classified as marketable securities pursuant to SFAS No. 115. 

Exposure Management
-------------------

     The principal objective of the Company's interest rate risk management 
activities are to evaluate the interest rate risk included in certain balance 
sheet accounts, determine the level of risk appropriate given the Company's 
business objectives, operating environment, capital and liquidity requirements 
and performance objectives and to manage this risk consistent with approved 
guidelines.

     Farmers Life employs various methodologies to manage its exposure to 
interest rate risks.  Its asset/liability matching process focuses primarily 
on the management of interest rate risk.  The duration of insurance liabilities
is compared to the duration of assets backing the insurance product lines, 
measured in terms of cash flows.  The goal is to prudently balance 
profitability and risk for each insurance product class and for Farmers Life 
as a whole.

     Farmers Life also considers the timing of cash flows arising from market 
risk sensitive instruments and insurance portfolios under varying interest 
rate scenarios (cash flow testing) to verify its ability to meet future 
obligations.  Although these activities seek to reduce interest rate 
exposures, a change in levels of interest rates remains an uncertainty that 
could have an impact on the fair values or earnings of the Company.  

Quantitative Disclosure of Interest Rate Risk
---------------------------------------------

     The table below represents a summary of the par values of the Company's 
financial instruments at their expected maturity dates, the weighted average 
coupons by those maturity dates and the estimated fair value of those 
instruments for the period ended December 31, 1998.  The expected maturity 
categories take into consideration par amortization (for mortgage backed 
securities), call features and sinking fund features. 

     The estimated market value of available-for-sale securities is based on 
bid quotations from security dealers or on bid prices published in news quote 
services.  The fair value of BAFS notes receivable, QUIPS, certificates of 
contribution of the P&C Group, the surplus note of the P&C Group, mortgage 
loans, policy loans and future policy benefits, were analytically determined 
utilizing discounted cash analysis.  December 31, 1998 market interest rates 
were used as discounting rates in the estimation of fair value. 

     Generally, the assets included in the table below have fixed stated 
interest rates.  The QUIPS also have fixed stated rates; whereas, the future 
policy benefits-deferred annuities generally include variable rate contract 
terms.

                               Financial Instruments - With Interest Rate Risk
                                         As of December 31, 1998
                                          (Amounts in thousands)

<TABLE>
<CAPTION>
                                                     Expected Maturity Date
                                                                                     There      Total
                                12/31/99  12/31/00  12/31/01  12/31/02  12/31/03     After    Par Value   Fair Value
                                --------  --------  --------  --------  --------  ----------  ----------  ----------
<S>                             <C>       <C>       <C>       <C>       <C>       <C>         <C>         <C>
Noninsurance
----------------
Assets -
 Debt Securities Available-
  For-Sale:
   U.S. Treasury Securities &
    Other Obligations of U.S.
    Government                  $      -  $      -  $    235  $      -  $      -  $        -  $      235  $      252
     Weighted Avg Coupon           7.88%     7.88%     9.64%     0.00%     0.00%       0.00%
   Obligations of States &
    Political Subs              $ 48,756  $ 58,533  $155,627  $111,691  $108,481  $   27,020  $  510,108  $  538,989
     Weighted Avg Coupon           6.03%     6.12%     6.73%     6.52%     7.47%       5.64%
   Corporate Securities         $  5,000  $ 15,000  $ 17,035  $  6,222  $      -  $        -  $   43,257  $   44,359
     Weighted Avg Interest Rate    6.73%     6.50%     5.80%     6.57%     0.00%       0.00%
   Mortgaged-Backed Securities  $ 17,510  $ 25,268  $ 10,662  $    291  $      -  $        -  $   53,731  $   53,839
     Weighted Avg Coupon           5.48%     6.33%     8.83%     6.60%     0.00%       0.00%
   Other debt Securities        $      -  $  6,043  $  3,000  $  9,300  $  5,000  $        -  $   23,343  $   24,636
     Weighted Avg Coupon           6.85%     6.74%     6.84%     6.28%     9.18%       0.00%

   Mortgage Loans               $     49  $     54  $     59  $     34  $      -  $        -  $      196  $      214
     Weighted Avg Interest Rate     9.5%      9.5%      9.5%      9.5%      0.0%        0.0%

   Notes Receivable - Affiliate $      -  $200,000  $207,000  $200,000  $200,000  $  250,000  $1,057,000  $1,087,259
     Weighted Avg Interest Rate    5.62%     5.44%     5.48%     5.67%     5.71%       5.78%

   Certificates of Contribution
    of the P&C Group            $      -  $      -  $      -  $      -  $      -  $   34,380  $   34,380  $   34,380
     Weighted Avg Interest Rate    7.97%     7.97%     7.97%     7.97%     7.97%       7.97%

Liabilities -
   QUIPS                        $      -  $      -  $      -  $      -  $      -  $  500,000  $  500,000  $  513,608
     Weighted Avg Interest Rate    8.41%     8.41%     8.41%     8.41%     8.41%       8.41%


Insurance Subsidiaries
----------------------
Assets - 
 Debt Securities Available-
  For-Sale:
   U.S. Treasury Securities &
    Other Obligations of U.S.
    Government                  $  2,104  $  2,220  $  6,344  $ 43,979  $ 63,649  $  272,543  $  390,839  $  504,407
     Weighted Avg Interest Rate    8.76%     8.76%     8.81%     9.21%     9.66%      10.31%
   Obligations of States &
    Political Subs              $  8,319  $ 31,942  $ 14,899  $ 41,174  $ 70,459  $  435,949  $  602,742  $  651,574
     Weighted Avg Interest Rate    5.19%     5.22%     4.98%     4.98%     4.86%       4.50%
   Debt Securities Issued By
    Foreign Governments         $      -  $  6,000  $  8,500  $ 21,000  $  5,540  $  122,250  $  163,290  $   81,379
     Weighted Avg Interest Rate    7.96%     7.72%     7.88%     8.06%     7.54%       7.15%
   Corporate Securities         $ 64,061  $ 71,099  $132,536  $118,474  $177,545  $  428,093  $  991,808  $1,053,099
     Weighted Avg Interest Rate    7.58%     7.60%     7.78%     7.67%     7.91%       7.54%
   Mortgage-Backed Securities   $ 79,087  $136,014  $180,768  $166,583  $204,230  $1,190,021  $1,956,703  $1,978,945
     Weighted Avg Interest Rate    6.41%     6.45%     6.31%     6.27%     6.17%       5.93%
   Other Debt Securities        $  5,411  $  7,063  $  9,009  $  5,000  $ 18,850  $   38,611  $   83,944  $   86,662
     Weighted Avg Interest Rate    6.58%     6.88%     7.07%     6.75%     7.91%       7.25%

   Surplus Note of the P&C
    Group                       $      -  $      -  $119,000  $      -  $      -  $        -  $  119,000  $  119,000
     Weighted Avg Interest Rate    6.10%     6.10%     6.10%     0.00%     0.00%       0.00%
   Mortgage Loans               $ 10,378  $  5,162  $  8,584  $ 19,385  $  4,915  $   11,781  $   60,205  $   67,615
     Weighted Avg Interest Rate    9.88%     9.87%     9.90%     9.87%     9.85%       9.89%
   Policy Loans                 $ 10,143  $  9,388  $  8,801  $  8,260  $  7,804  $  140,815  $  185,211  $  192,620
     Weighted Avg Interest Rate    8.00%     8.00%     8.00%     8.00%     8.00%       8.00%

Liabilities -
   Future Policy Benefits -
    Deferred Annuities          $ 90,191  $ 92,783  $ 91,692  $ 88,855  $ 85,316  $  991,910  $1,440,747  $1,382,208
     Weighted Avg Interest Rate    5.54%     5.54%     5.54%     5.54%     5.54%       5.54%

</TABLE>

Equity Price Risk
-----------------

     As a consequence of maintaining an investment portfolio composed of 
equity securities and maintaining purchased S&P 500 call options that hedge 
certain liabilities created as a result of underwriting equity-linked annuity 
products, the Company is exposed to equity price risk.  Equity price risk 
arises as a result of changes in the level and volatility of equity prices 
which in turn affect the value of equity securities and/or instruments that 
derive their value from a particular equity security, basket of equity 
securities or an equity securities index. 

     The Company has classified all of its marketable equity investments as 
available-for-sale as defined by SFAS No. 115, with the exception of $53.0 
million in 1998 which relate to a grantor trust and are classified as trading 
securities as defined by SFAS No. 115.  The available-for-sale equity 
investments are reported on the balance sheet at market value, with unrealized 
gains and losses, net of tax, excluded from earnings and reported as a 
component of stockholders' equity.  The trading investments are reported on 
the "Other assets" line of the balance sheet at market value with both realized
and unrealized gains and losses included in earnings, net of tax, in the year 
in which they occur.  As such, an increase in interest rates could adversely 
affect the Company's stockholders' equity. 

     The Company's equity price risk relative to its underwriting of equity-
linked annuity products exists as a result of the potential liability that may 
exist at the end of these product's contract terms.  At the end of a seven 
year term, these annuity products credit interest to the annuity participant 
at a rate based on a specified portion of the change in the value of the 
S&P 500, subject to a guaranteed annual minimum return.  As such, an increase 
in the S&P 500 could increase the liability due at the maturity of these 
annuity products and adversely affect the Company's stockholders' equity. 

Exposure Management
-------------------

     On a monthly basis, the Investment Committee evaluates the level of 
equity price risk that it believes the Company should carry giving 
consideration to, among other things, the ratio of investments in equity 
securities as a percentage of stockholders' equity.   Management utilizes a 
number of equity price risk management tools including, but not limited to, 
reviewing equity investment trading activity, marking all equity positions to 
market daily, analyzing investment profit and loss statements and reviewing 
the industry sector allocation and capitalization mix of the Company's 
investments in marketable equity securities. 

     As indicated above, the Company is exposed to equity price risk 
(primarily the S&P 500) as a consequence of underwriting equity-linked annuity 
products through Farmers Life.  However, the Company addresses this risk 
through a controlled program of risk management that includes the use of 
derivative financial instruments.  The Company purchases S&P 500 call options 
to reduce the exposure to rising equity prices that results from underwriting 
the equity linked annuity product.  Call options are contracts that grant the 
purchaser the right to buy the underlying index on a certain date for a 
specified price.  The Interest Committee of Farmers Life monitors option 
market pricing and manages the participation rate on the equity-linked annuity 
products to minimize the associated equity price risk.  See Note K of the 
Company's consolidated financial statements.

Quantitative Disclosure of Equity Price Risk
--------------------------------------------

     The table below represents a sensitivity analysis of the equity price 
risk that exists within the Company's investment in equity financial 
instruments.  The equity market risk associated with the equity-linked annuity 
products is substantially offset by the related option contracts, therefore, 
these instruments taken as a whole, do not materially impact the Company's 
market risk position.  As such, the table below focuses on the equity 
instrument securities. The Noninsurance and the Insurance Subsidiaries 
equity investment portfolios have weighted average betas of .9266 and .9504, 
respectively.  The weighted average beta is calculated as the portfolio 
weighted average of the individual asset betas.  The individual asset betas 
are calculated using sixty months of historical data.  The individual asset 
betas are calculated relative to a broadly defined universe of approximately 
8,000 assets.  Then a portfolio beta is calculated for both the Company's 
portfolio and the benchmark Russell 3000 index.  The weighted average beta is 
equal to the ratio of the portfolio beta to the Russell 3000 beta. 

     In light of the Company's weighted average beta, the Company expects the 
market value of its equity investment portfolio to have a strong correlation 
to movements in the Russell 3000 index.  As indicated in the table below, if 
the Russell 3000 index were to move by a positive or negative 10%, the Company 
estimates that there would be a corresponding 9.3% change in the market value 
of Noninsurance's investment in equity securities and a 9.5% change in the 
market value of the Insurance Subsidiaries' investment in equity securities.  
The change in the market value of the Company's investments in equity 
securities would be in the same direction as the change in the Russell 3000 
index.

                        Trading Financial Instruments - With Equity Price Risk
                                     As of December 31, 1998
                                      (Amounts in thousands)
<TABLE>
<CAPTION>
                                                                         Estimated          Estimated
                                                                          Value If           Value If
                                                                        Russell 3000       Russell 3000
                                    Historical        Market Value    Index Increased    Index Decreased
                                    Cost Basis         12/31/1998          By 10%             By 10%
                                  ---------------   ---------------   ---------------   ---------------
<S>                               <C>               <C>               <C>               <C>
Noninsurance
------------
       Equity Investments         $       278,107   $       354,465   $       387,310   $       321,620

Insurance Subsidiaries
----------------------
       Equity Investments         $        99,552   $       107,365   $       117,569   $        97,161

</TABLE>

Foreign Exchange Rate Risk
--------------------------

     Foreign exchange rate risk arises from the possibility that changes in 
foreign exchange rates will impact the value or cash flows of financial 
instruments.  When a company buys or sells a financial instrument denominated 
in a currency other than US dollars, exposure exists from the net open 
currency position.  Until the position is covered by the selling or buying of 
an equivalent amount of the same currency or by entering into a financing 
arrangement denominated in the same currency, a company is exposed to a risk 
that the exchange rate may move in an unfavorable direction against the US 
dollar. 

     The Company does not have any material holdings of financial instruments 
denominated in a currency other than US dollars as of December 31, 1998.


Credit Risk 
-----------

     Credit risk arises from the potential inability of a counterparty to 
perform on an obligation in accordance with the terms of the contract.  The 
Company's primary credit risk exposure exists as a result of maintaining both 
a fixed income investment portfolio and a mortgage loan portfolio.  As a 
holder of these financial instruments, the Company is exposed to default by 
the issuer or to the possibility of market price deterioration as a 
counterparty may experience deterioration in its credit quality.  The Company 
has established policies and procedures to manage this credit risk. For 
example, the Investment Committee is responsible for monitoring the credit 
quality of securities positions held in the Company's fixed income investment 
portfolios in order to quantify and limit the risk to the Company of issuer 
default or changes in credit spreads.  The Company's management does not 
believe that there are any concentrations of credit risk to unaffiliated 
parties as of the period ended December 31, 1998.  The Company does not 
currently use derivative products to manage credit risk.