UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549  FORM 10-Q  (Mark one)þQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934  FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2007  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: 333-20277  PHL VARIABLE INSURANCE COMPANY (Exact name of registrant as specified in its charter)  Connecticut06-1045829(State or other jurisdiction of(I.R.S. Employer Identification No.)incorporation or organization)One American Row,
Hartford, Connecticut06102-5056(Address of principal executive offices)(Zip Code)(860) 403-5000(Registrants telephone number, including area code)   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. YESþ
NO ̈  Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of accelerated filer and large accelerated filer in Rule 12b-2 of the Exchange Act. (Check one): Large accelerated filer ̈
Accelerated filer ̈
Non-accelerated filerþ  Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES ̈
NOþ  PHL Variable Insurance Company is a wholly-owned indirect subsidiary of The Phoenix Companies, Inc., and there is no market for the registrants common stock. As of March 31, 2007, there were 500 shares of the registrants common stock outstanding.  The registrant meets the conditions set forth in General Instruction H(1)(a) and (b) of Form 10-Q and is therefore filing this Form with the reduced disclosure format permitted by that General Instruction.       1    TABLE OF CONTENTS  Item
No.
DescriptionPagePART I


FINANCIAL INFORMATION1
Financial Statements:Unaudited Interim Condensed Balance Sheet as of
    March 31, 2007 and December 31, 20063Unaudited Interim Condensed Statement of Income and
    Comprehensive Income and Changes in Stockholders Equity
for the
    three months ended March 31, 2007 and 20064Unaudited Interim Condensed Statement of Cash Flows
    for the three months ended March 31, 2007 and 20065Notes
to Unaudited Interim Condensed Financial Statements
  for the three months ended March 31, 2007 and 200662
Managements Discussion and Analysis of Financial Condition and
  Results of Operations153
Quantitative and Qualitative Disclosures About Market Risk204
Controls and Procedures20PART II


OTHER
INFORMATION1
Legal
Proceedings211A
Risk
Factors212
Unregistered Sales of Equity Securities and Use of Proceeds213
Defaults Upon Senior Securities214
Submission of Matters to a Vote of Security Holders215
Other
Information216
Exhibits22Signature23  2    PART I. FINANCIAL INFORMATION  ITEM 1. FINANCIAL STATEMENTS  PHL VARIABLE INSURANCE COMPANY Unaudited Interim Condensed Balance Sheet ($ in thousands, except share data) March 31, 2007 (unaudited) and December 31, 2006  Mar 31,
Dec 31,2007
2006ASSETS:Available-for-sale debt securities, at fair value
$
1,926,450

$
2,050,989Policy loans, at unpaid principal balances

17,115


15,542Other investments

1,930


1,612Total investments



1,945,495


2,068,143Cash and cash equivalents

75,137

47,127Accrued
investment income
19,446

19,882Receivables
48,426

54,534Deferred policy acquisition costs
735,599

703,794Receivable from related parties
1,023

300Other
assets
3,081

2,356Separate account assets
3,057,422

2,953,063Total assets$
5,885,629
$
5,849,199LIABILITIES:Policyholder deposit funds$1,387,447
$1,491,367Policy
liabilities and accruals
741,723

706,198Deferred income taxes
106,820

96,654Payable
to related parties
9,677

25,081Other
liabilities
27,506

26,576Separate account liabilities
3,057,422

2,953,063Total liabilities
5,330,595

5,298,939CONTINGENT LIABILITIES (Note 7)STOCKHOLDERS EQUITY:Common
stock, $5,000 par value: 1,000 shares authorized; 500 shares issued
2,500

2,500Additional paid-in capital
503,234

503,234Retained earnings
51,053

47,215Accumulated other comprehensive loss
(1,753)

(2,689)Total stockholders equity
555,034

550,260Total liabilities and stockholders equity$
5,885,629
$
5,849,199  The accompanying notes
are an integral part of these financial statements.    3    PHL VARIABLE INSURANCE COMPANY Unaudited Interim Condensed Statement of Income and Comprehensive Income and Changes in Stockholders Equity ($ in thousands, except share data) Three Months Ended March 31, 2007 and 2006  2007
2006REVENUES:Premiums$3,179
$2,475Insurance and investment product fees
54,301

41,995Investment income, net of expenses
27,894

35,060Net
realized investment losses
(170)

(4,083)Total revenues
85,204

75,447BENEFITS AND EXPENSES:Policy benefits
35,676

43,848Policy acquisition cost amortization
25,263

13,057Other operating expenses
17,086

19,512Total benefits and expenses
78,025

76,417Income (loss) before income taxes
7,179

(970)Applicable income tax (expense) benefit
(2,340)

228Net income (loss)$4,839
$(742)COMPREHENSIVE INCOME:Net income (loss)$4,839
$(742)Net
unrealized investment gains (losses)
935
(4,399)Other comprehensive income (loss)
935

(4,399)Comprehensive income (loss)$5,774
$(5,141)RETAINED EARNINGS:Net
income (loss)$4,839
$(742)Adjustment for initial application of FIN 48 (Note 2)
(1,000)

OTHER COMPREHENSIVE INCOME:Other comprehensive income (loss)
935

(4,399)Change in stockholders equity
4,774

(5,141)Stockholders equity, beginning of period
550,260

542,263Stockholders equity, end of period$555,034
$537,122  The accompanying notes are an integral
part of these financial statements.   4    PHL VARIABLE INSURANCE COMPANY Unaudited Interim Condensed Statement of Cash Flows ($ in thousands) Three Months Ended March 31, 2007 and 2006  2007
2006OPERATING ACTIVITIES:Net
income (loss)$4,839
$(742)Net
realized investment losses
170

4,083Investment income (loss)
594

(1,615)Deferred income taxes
9,662

5,781Increase in receivables
(166)

(3,213)Increase in deferred policy acquisition costs
(36,155)

(70,607)Increase in policy liabilities and accruals
35,991

94,399Other assets and other liabilities net change
(21,551)

(21,875)Cash from (for) operating activities
(6,616)

6,211INVESTING ACTIVITIES:Investment purchases
(238,779)

(308,024)Investment sales, repayments and maturities
376,547

607,581Cash from investing activities
137,768

299,557FINANCING ACTIVITIES:Policyholder deposit fund deposits
65,580

50,317Policyholder deposit fund withdrawals
(168,722)

(241,248)Cash for financing activities
(103,142)

(190,931)Change in cash and cash equivalents
28,010

114,837Cash and cash equivalents, beginning of period
47,127

25,818Cash and cash equivalents, end of period$75,137
$140,655  The accompanying notes are an integral
part of these financial statements.   5    PHL VARIABLE INSURANCE COMPANY Notes to Unaudited Interim Condensed Consolidated Financial Statements Three Months Ended March 31, 2007 and 2006    1. Organization and
Description of Business  PHL Variable Insurance Company is a
life insurance company offering variable and fixed annuity and non-participating
life insurance products. It is a wholly-owned subsidiary of PM Holdings, Inc. PM
Holdings is a wholly-owned subsidiary of Phoenix Life Insurance Company (Phoenix
Life), which is a wholly-owned subsidiary of The Phoenix Companies, Inc., a New
York Stock Exchange listed company.   2. Basis of
Presentation and Significant Accounting Policies  We have prepared these financial
statements in accordance with accounting principles generally accepted in the
United States of America, or GAAP, which differ materially from the accounting
practices prescribed by various insurance regulatory authorities. We have
reclassified certain amounts for 2006 to conform with 2007 presentation.  Use of estimates  In preparing these financial statements
in conformity GAAP, we are required to make estimates and assumptions that
affect the reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses during
the reporting periods. Actual results could differ from these estimates. We
employ significant estimates and assumptions in the determination of deferred
policy acquisition costs; policyholder liabilities and accruals; the valuation
of investments in debt securities; and accruals for deferred taxes and
contingent liabilities. Our significant accounting policies are presented in the
notes to our financial statements in our 2006 Annual Report on Form 10-K.  Our interim financial statements do not
include all of the disclosures required by GAAP for annual financial statements.
In our opinion, we have included all adjustments, consisting of normal recurring
adjustments, considered necessary for a fair statement of the results for the
interim periods. Financial results for the three-month period in 2007 are not
necessarily indicative of the results that may be expected for the year 2007.
These unaudited financial statements should be read in conjunction with our
financial statements in our 2006 Annual Report on Form 10-K.  Adoption of new accounting standards  The Company adopted the provisions of
the Financial Accounting Standards Board, or FASB, Interpretation No. 48, Accounting for Uncertainty in Income Taxes, or FIN 48, on
January 1, 2007. As a result of the implementation of FIN 48, we
recognized a cumulative effect adjustment of approximately $1,000 thousand
increase in reserves for uncertain tax benefits, which was accounted for as a
reduction to the January 1, 2007 balance of retained earnings. Including
the cumulative effect adjustment, we had $1,840 thousand of total gross
unrecognized tax benefits as of January 1, 2007. The entire amount of
unrecognized tax benefits would, if recognized, impact the annual effective tax
rate upon recognition. There were no material changes in unrecognized tax
benefits during the first quarter of 2007.  It is anticipated that any changes
within the next twelve months to the uncertain tax positions recorded as of
March 31, 2007 will not result in a material change to our results of
operations, financial condition or liquidity. We do not anticipate that there
will be additional payments made or refunds received within the next twelve
months with respect to the years under audit. We do not anticipate any increases
to the unrecognized tax benefits that would have a significant impact on the
financial position of the Company.  6    We recognize
interest and penalties related to amounts accrued on uncertain tax positions and
amounts paid or refunded from federal and state income tax authorities in tax
expense. The interest and penalties recorded during the three-month periods
ending March 31, 2007, 2006 and 2005 did not have a material impact on the
effective tax rate those periods. We did not have an accrual for the payment of
interest and penalties as of January 1, 2007.  In September 2006, the Securities and
Exchange Commission staff issued Staff Accounting Bulletin No. 108, Considering the Effects of Prior Year Misstatements when Quantifying
Misstatements in Current Year Financial Statements, or SAB 108. SAB 108
provides guidance for how errors should be evaluated to assess materiality from
a quantitative perspective. SAB 108 permits companies to initially apply its
provisions by either restating prior financial statements or recording the
cumulative effect of initially applying the approach as adjustments to the
carrying values of assets and liabilities as of January 1, 2006 with an
offsetting adjustment to retained earnings. We adopted SAB 108 on
December 31, 2006 with no effect to the financial statements.  In March 2006, the FASB issued SFAS
156, Accounting for Servicing of Financial Assets, an amendment of FASB
Statement No. 140, or SFAS 156. SFAS 156 provides guidance on recognition
and disclosure of servicing assets and liabilities and is effective beginning
January 1, 2007. We adopted this standard effective January 1, 2007
with no material impact on our financial position and results of operations.  Effective January 1, 2006, we
adopted SFAS 155, Accounting for Certain Hybrid Financial Instruments, or
SFAS 155. SFAS 155 resolves certain issues surrounding the accounting for
beneficial interests in securitized financial assets. Our adoption of SFAS 155
did not have a material effect on our financial statements.  Effective January 1, 2006, we
adopted FASB Staff Position Nos. SFAS 115-1 and SFAS 124-1, The Meaning of
Other-Than-Temporary Impairment and Its Application to Certain Investments,
or FSP 115-1. FSP 115-1 provides guidance as to the determination of
other-than-temporarily impaired securities and requires certain financial
disclosures with respect to unrealized losses. These accounting and disclosure
requirements largely codify our existing practices as to other-than-temporarily
impaired securities and thus, our adoption did not have a material effect on our
consolidated financial statements.  In September 2005, the Accounting
Standards Executive Committee, or AcSEC, of the AICPA issued Statement of
Position 05-1, Accounting by Insurance Enterprises for Deferred Acquisition
Costs in Connection With Modifications or Exchanges of Insurance Contracts,
or SOP 05-1. SOP 05-1 provides guidance on accounting by insurance enterprises
for deferred policy acquisition costs on internal replacements of insurance and
investment contracts other than those specifically described in Statement of
Financial Accounting Standards No. 97, or SFAS No. 97. The SOP defines an
internal replacement as a modification in product benefits, features, rights, or
coverages that occurs by the exchange of a contract for a new contract, or by
amendment, endorsement, or rider to a contract, or by the election of a feature
or coverage within a contract. This SOP is effective for internal replacements
occurring in fiscal years beginning after December 15, 2006. We adopted
this standard effective January 1, 2007 with no material effect on our financial
position and results of operations.  Accounting standards not yet adopted  In February 2007, the FASB issued SFAS
No. 159, The Fair Value Option for Financial Assets and Financial
Liabilities, orSFAS 159. SFAS 159 provides companies with
an option to report selected financial assets and liabilities at fair value.
SFAS 159 is effective for fiscal years beginning after November 15, 2007,
and early adoption is permitted provided the entity also elects to apply the
provisions of SFAS No. 157, Fair Value Measurements, at the same time. We
are currently assessing the impact of SFAS 159 on our financial position
and results of operations.  In September 2006, the FASB issued SFAS
No. 157, Fair Value Measurements, or SFAS 157.
SFAS 157 defines fair value, establishes a framework for measuring fair
value and expands disclosures about fair value measurements. SFAS 157
provides guidance on how to measure fair value when required under existing
accounting standards. The statement establishes a fair value hierarchy that
prioritizes the inputs to valuation techniques used to measure fair value into
three broad levels (Level 1, 2 and 3). Level 1 inputs are observable
inputs that reflect quoted prices for identical assets or liabilities in active
markets that we have the ability to access at the measurement date. Level 2
inputs are observable inputs, other than quoted prices included in Level 1, for
the asset or liability. Level 3 inputs are unobservable inputs reflecting our
estimates of the assumptions that  7    market
participants would use in pricing the asset or liability (including assumptions
about risk). Quantitative and qualitative disclosures will focus on the inputs
used to measure fair value for both recurring and non-recurring fair value
measurements and the effects of the measurements in the financial statements.
SFAS 157 is effective for fiscal years beginning after November 15,
2007, with earlier application encouraged only in the initial quarter of an
entitys fiscal year. We are currently assessing the impact of
SFAS 157 on our financial position and results of operations.   3. Deferred Policy
Acquisition Costs  Deferred Policy Acquisition Costs:Three Months Ended($ in thousands)
March 31,2007
2006Policy acquisition costs deferred$61,418
$83,664Costs amortized to expenses:Recurring costs
(24,699)

(15,335)Realized investment gains
(564)

2,278Offsets to net unrealized investment gains or losses included in 
  other comprehensive income
(4,350)

10,558Change in deferred policy acquisition costs
31,805

81,165Deferred policy acquisition costs, beginning of period
703,794

529,315Deferred policy acquisition costs, end of period$735,599
$610,480   4. Investing
Activities  Debt securities  Fair Value and Cost of Debt Securities:
March 31, 2007
December 31, 2006($ in thousands)
Fair Value
Cost
Fair Value
CostU.S. government and agency$79,407
$79,625
$92,579
$93,425State and political subdivision
15,939

16,221

15,900

16,281Foreign government
37,420

34,710

49,884

46,505Corporate
1,085,243

1,095,479

1,157,781

1,172,275Mortgage-backed
425,409

427,356

452,641

455,739Other asset-backed
283,032

280,593

282,204

280,086Available-for-sale debt securities$1,926,450
$1,933,984
$2,050,989
$2,064,311   Unrealized Gains and Losses from Debt Securities:
March 31, 2007
December 31, 2006($ in thousands)
Gains
Losses
Gains
LossesU.S. government and agency$452
$(670)
$295
$(1,141)State and political subdivision
15

(297)

17

(398)Foreign government
2,869

(159)

3,590

(211)Corporate
7,086

(17,322)

6,523

(21,017)Mortgage-backed
2,967

(4,914)

2,862

(5,960)Other asset-backed
3,914

(1,475)

3,857

(1,739)Debt securities gains (losses)$17,303
$(24,837)
$17,144
$(30,466)Debt securities net losses

$(7,534)


$(13,322)  8     Aging of Temporarily Impaired
March 31, 2007Debt Securities:
Less than 12 months
Greater than 12 months
Total($ in thousands)Fair
Unrealized
Fair
Unrealized
Fair
UnrealizedValue
Losses
Value
Losses
Value
LossesDebt securitiesU.S. government and agency$
$
$41,962
$(670)
$41,962
$(670)State and political subdivision




15,422

(297)

15,422

(297)Foreign government
2,020

(1)

11,353

(158)

13,373

(159)Corporate
109,059

(706)

645,471

(16,616)

754,530

(17,322)Mortgage-backed
40,198

(785)

229,127

(4,129)

269,325

(4,914)Other asset-backed
40,619

(230)

91,355

(1,245)

131,974

(1,475)Total temporarily impaired securities$
191,896
$
(1,722)
$
1,034,690
$
(23,115)
$
1,226,586
$
(24,837)Below investment grade$
22,770
$
(120)
$
67,670
$
(3,181)
$
90,440
$
(3,301)Below investment grade after offsets
  for deferred policy acquisition cost
  adjustment and taxes

$
(18)


$
(541)


$
(559)Number of securities



101




540




641   There were no
unrealized losses of below investment grade debt securities with a fair value
less than 80% of the securities amortized cost at March 31, 2007.  The securities are considered to be
temporarily impaired at March 31, 2007 as each of these securities has
performed, and is expected to continue to perform, in accordance with their
original contractual terms, and we have the ability and intent to hold these
securities until they recover their value.  Aging of Temporarily Impaired
As of December 31, 2006Debt Securities:
Less than 12 months
Greater than 12 months
Total($ in thousands)Fair
Unrealized
Fair
Unrealized
Fair
UnrealizedValue
Losses
Value
Losses
Value
LossesDebt SecuritiesU.S. government and agency$5,643
$(19)
$50,878
$(1,122)
$56,521
$(1,141)State and political subdivision
1,014

(3)

14,367

(395)

15,381

(398)Foreign government
4,024

(10)

9,323

(201)

13,347

(211)Corporate
152,344

(1,595)

689,660

(19,422)

842,004

(21,017)Mortgage-backed
78,465

(693)

257,905

(5,267)

336,370

(5,960)Other asset-backed
53,844

(171)

102,302

(1,568)

156,146

(1,739)Total temporarily impaired securities$
295,334
$
(2,491)
$
1,124,435
$
(27,975)
$
1,419,769
$
(30,466)Below investment grade$
20,190
$
(377)
$
90,763
$
(3,859)
$
110,953
$
(4,236)Below investment grade after offsets
  for deferred acquisition cost
  adjustment and taxes

$
(45)


$
(550)


$
(595)Number of securities



165




565




730  There were no unrealized losses of
below investment grade debt securities with a fair value less than 80% of the
securities amortized cost at December 31, 2006.  The securities are considered to be
temporarily impaired at December 31, 2006 as each of these securities has
performed, and is expected to continue to perform, in accordance with their
original contractual terms, and we have the ability and intent to hold these
securities until they recover their value.  9    Net
investment income  Sources of Net Investment Income:Three Months Ended($ in thousands)
March 31,2007
2006Debt securities$27,011
$34,874Policy loans
254

87Other investments
11

66Other income
214

Cash
and cash equivalents
921

579Total investment income
28,411

35,606Investment expenses
(517)

(546)Net investment income$27,894
$35,060  Net realized investment gains
(losses)  Sources and Types of Net Realized Investment Gains
(Losses):Three Months Ended($ in thousands)
March 31,2007
2006Debt security impairments$(500)
$(411)Debt security transaction gains
869

1,210Debt security transaction losses
(1,431)

(5,067)Other investments transaction gains
892

185Net transaction gains (losses)
330

(3,672)Net realized investment losses$(170)
$(4,083)  Unrealized investment gains (losses)  Sources of Changes in Net Unrealized Investment Gains (Losses):Three Months Ended($ in thousands)
March 31,2007
2006Debt securities$5,788
$(17,323)Net unrealized investment gains (losses)$5,788
$(17,323)Net unrealized investment gains (losses)$5,788
$(17,323)Applicable deferred policy acquisition costs
(4,350)

10,558Applicable deferred income tax (expense) benefit
(503)

2,366Offsets to net unrealized investment gains (losses)
(4,853)

12,924Net unrealized investment gains (losses) included in other comprehensive
income$935
$(4,399)   5. Separate
Accounts, Death Benefits and Other Insurance Benefit Features  Separate account products are those for
which a separate investment and liability account is maintained on behalf of the
policyholder. Investment objectives for these separate accounts vary by fund
account type, as outlined in the applicable fund prospectus or separate account
plan of operations. Our separate account products include variable annuities and
variable life insurance contracts. The assets supporting these contracts are
carried at fair value and reported as Separate account assets with an equivalent
amount reported as Separate account liabilities. Amounts assessed against the
policyholder for mortality, administration, and other services are included
within revenue in Insurance and investment product fees. During the three-month
periods ended March 31, 2007 and 2006, there were no gains or losses on
transfers of assets from the general account to a separate account.  Many of our variable contracts offer
various guaranteed minimum death, accumulation, withdrawal and income benefits.
These benefits are offered in various forms as described in the footnotes to the
table below. We currently reinsure a significant portion of the death benefit
guarantees associated with our in-force block of business. We establish policy
benefit liabilities for minimum death and income benefit guarantees relating to
certain annuity policies as follows:   10     ·
Liabilities associated with the guaranteed minimum death
benefit, or GMDB, are determined by estimating the expected value of death
benefits in excess of the projected account balance and recognizing the excess
ratably over the accumulation period based on total expected assessments. The
assumptions used in estimating the liabilities are generally consistent with
those used for amortizing deferred policy acquisition costs.·
Liabilities associated with the guaranteed minimum income
benefit, or GMIB, are determined by estimating the expected value of the income
benefits in excess of the projected account balance at the date of annuitization
and recognizing the excess ratably over the accumulation period based on total
expected assessments. The assumptions used for calculating such guaranteed
income benefit liabilities are generally consistent with those used for
calculating the guaranteed death benefit liabilities.  For annuities with GMDB, 500
stochastically generated scenarios were used. For annuities with GMIB, we used
1,000 stochastically generated scenarios.  Separate Account Investments of Account Balances of Contracts with
Guarantees:Mar 31,
Dec 31,($ in thousands)
2007
2006Debt securities$466,242
$456,148Equity funds
1,946,611

1,861,762Other
73,030

68,810Total
$
2,485,883
$
2,386,720   Changes in Guaranteed Liability Balances:As of($ in thousands)
March 31, 2007Annuity
AnnuityGMDB(1)
GMIBLiability balance as of January 1, 2007$26,979
$3,568Incurred
646

(1,401)Paid
(366)

Liability balance as of March 31, 2007
$
27,259
$
2,167   Changes in Guaranteed Liability Balances:Year Ended($ in thousands)
December 31, 2006Annuity
AnnuityGMDB(1)
GMIBLiability balance as of January 1, 2006$27,749
$2,474Incurred
601

1,094Paid
(1,371)

Liability balance as of December 31, 2006
$
26,979
$
3,568 _______ (1)The reinsurance recoverable asset related to the GMDB was $17,219 thousand and
$17,139 thousand as of March 31, 2007 and December 31, 2006,
respectively.  The GMDB and GMIB guarantees are
recorded in policy liabilities and accruals on our balance sheet. Changes in the
liability are recorded in policy benefits, excluding policyholder dividends, on
our statement of operations. In a manner consistent with our policy for deferred
policy acquisition costs, we regularly evaluate estimates used and adjust the
additional liability balances, with a related charge or credit to benefit
expense if actual experience or other evidence suggests that earlier assumptions
should be revised.  We also offer certain variable products
with a guaranteed minimum withdrawal benefit, or GMWB, and a guaranteed minimum
accumulation benefit, or GMAB.  The GMWB guarantees the policyholder a
minimum amount of withdrawals and benefit payments over time, regardless of the
investment performance of the contract, subject to an annual limit. Optional
resets are available. In addition, we introduced a feature for these contracts
beginning in the fourth quarter of 2005 that allows the policyholder to receive
the guaranteed annual withdrawal amount for as long as they are alive.  11    The GMAB rider provides the contract
holder with a minimum accumulation of their purchase payments deposited within a
specific time period, adjusted for withdrawals, after a specified amount of time
determined at the time of issuance of the variable annuity contract.  The GMWB and GMAB represent embedded
derivatives in the variable annuity contracts that are required to be reported
separately from the host variable annuity contract. They are carried at fair
value and reported in policyholder deposit funds. The fair value of the GMWB and
GMAB obligation is calculated based on actuarial and capital market assumptions
related to the projected cash flows, including benefits and related contract
charges, over the lives of the contracts, incorporating expectations concerning
policyholder behavior. As markets change, mature and evolve and actual
policyholder behavior emerges, management continually evaluates the
appropriateness of its assumptions.  In order to minimize the volatility
associated with the GMWB and GMAB liabilities, we have entered into a contract
with Phoenix Life whereby we cede 100% of any claims for these guarantees.
Because this contract does not transfer sufficient risk to be accounted for as
reinsurance, we use deposit accounting for the contract. The assets on deposit
with Phoenix Life were $781 thousand and $220 thousand at March 31, 2007
and December 31, 2006, respectively. These amounts are included in our
balance sheet in other assets. As of March 31, 2007 and December 31,
2006, the embedded derivative for GMWB and GMAB was immaterial. There were no
benefit payments made for the GMWB or GMAB during 2007 or 2006.  For those guarantees of benefits that
are payable in the event of death, the net amount at risk is generally defined
as the current guaranteed minimum death benefit in excess of the current account
balance at the balance sheet date. For guarantees of benefits that are payable
upon annuitization, the net amount at risk is generally defined as the present
value of the minimum guaranteed annuity payments available to the policy holder
determined in accordance with the terms of the contract in excess of the current
account balance. For guarantees of accumulation balances, the net amount at risk
is generally defined as the guaranteed minimum accumulation balance minus the
current account balance.  Additional Insurance Benefits:
Net Amount
Average($ in thousands)Account
At Risk After
Attained AgeValue
Reinsurance
of AnnuitantGMDB return of premium(1)$1,336,529
$7,046

59GMDB step up(2)
1,650,974

32,919

61GMDB earnings enhancement benefit (EEB)(3)
79,601

6

59GMDB greater of annual step up and roll up(4)
38,568

3,951

62Total GMDB at March 31, 2007
$
3,105,672
$
43,922GMIB$636,666



59GMAB
241,488



54GMWB
43,358



65Total at March 31, 2007
$
921,512 __________ (1)Return of premium: The death benefit is the greater of current account
value or premiums paid (less any adjusted partial withdrawals).(2)Step Up: The death benefit is the greater of current account value,
premiums paid (less any adjusted partial withdrawals) or the annual step up
amount prior to the eldest original owner attaining a certain age. On and after
the eldest original owner attains that age, the death benefit is the greater of
current account value or the death benefit at the end of the contract year prior
to the eldest original owners attaining that age plus premium payments
(less any adjusted partial withdrawals) made since that date.(3)EEB: The death benefit is the greater of the premiums paid (less any
adjusted partial withdrawals) or the current account value plus the EEB.(4)Greater of Annual Step Up and Annual Roll Up: The death benefit is the
greater of premium payments (less any adjusted partial withdrawals), the annual
step up amount, the annual roll up amount or the currant account value prior to
the eldest original owner attaining age 81. On and after the eldest original
owner attained age 81, the death benefit is the greater of current account value
or the death benefit at the end of the contract year prior to the eldest
original owners attained age of 81 plus premium payments (less any
adjusted partial withdrawals) made since that date.  12     Liabilities
for universal life are generally determined by estimating the expected value of
losses when death benefits exceed revenues and recognizing those benefits
ratably over the accumulation period based on total expected assessments. The
assumptions used in estimating these liabilities are consistent with those used
for amortizing deferred policy acquisition costs. A single set of best estimate
assumptions is used since these insurance benefits do not vary significantly
with capital markets volatility. At March 31, 2007, we held additional
universal life benefit reserves of $12,338 thousand.   6. Income Taxes  For the three months ended
March 31, 2007 and 2006, the effective income tax rates applicable to
income from continuing operations differ from the 35.0% U.S. federal statutory
tax rate. Items giving rise to the differences and the effects are as follows:  Analysis of Effective Income Tax Rates:Three Months EndedMarch 31,2007
2006Income taxes at statutory rate$35.0%
$35.0%Investment income not subject to tax
(2.4%)

(11.5%)Effective income tax rates applicable to continuing operations$32.6%
$23.5%  Our federal income tax returns are
routinely audited by the IRS and estimated provisions are routinely provided in
the financial statements in anticipation of the results of these audits. The
current periods being audited by the IRS are the 2003 and 2002 tax years. While
it is often difficult to predict the outcome of these audits, including the
timing of any resolution of any particular tax matter, we believe that our
reserves, as recorded on the balance sheet, are adequate for all open years.
Unfavorable resolution of any particular issue could result in additional use of
cash to pay liabilities that would be deemed owed to the IRS. Additionally, any
unfavorable or favorable resolution of any particular issue could result in an
increase or decrease, respectively, to our effective income tax rate to the
extent that our estimates differ from the ultimate resolution.  See Note 2 to these financial
statements for information regarding the implementation of FIN 48.   7. Contingent
Liabilities  Litigation and Arbitration  We are regularly involved in litigation
and arbitration, both as a defendant and as a plaintiff. The litigation and
arbitration naming us as a defendant ordinarily involves our activities as an
insurer, investor, or taxpayer. It is not feasible to predict or determine the
ultimate outcome of all legal or arbitration proceedings or to provide
reasonable ranges of potential losses. We believe that the outcomes of our
litigation and arbitration matters are not likely, either individually or in the
aggregate, to have a material adverse effect on our consolidated financial
condition. However, given the large or indeterminate amounts sought in certain
of these matters and the inherent unpredictability of litigation and
arbitration, it is possible that an adverse outcome in certain matters could,
from time to time, have a material adverse effect on our results of operations
or cash flows in particular quarterly or annual periods.  Regulatory Matters  State regulatory bodies, the Securities
and Exchange Commission, or SEC, the National Association of Securities Dealers,
Inc., or NASD, and other regulatory bodies regularly make inquiries of us and,
from time to time, conduct examinations or investigations concerning our
compliance with, among other things, insurance laws and securities laws. We
endeavor to respond to such inquiries in an appropriate way and to take
corrective action if warranted.  13    For example,
during 2003 and 2004, the SEC conducted examinations of certain Phoenix Life
variable products and certain Phoenix Life affiliated investment advisers and
mutual funds. In 2004, the NASD also commenced examinations of two affiliated
broker-dealers; the examinations were closed in April 2005 and November 2004,
respectively.  In February 2005, the NASD notified PNX
that it was asserting violations of trade reporting rules by a subsidiary. PNX
responded to the NASD allegations in May 2005. Thereafter, in January 2007, the
NASD notified PNX that the matter is being referred for potential violations and
possible action. On May 3, 2007, the NASD accepted a letter of acceptance,
waiver and consent submitted by the PXP subsidiary to resolve this matter.
Without admitting or denying the NASDs findings, in accordance with the
terms of the letter the PXP subsidiary agreed to a censure, to pay a fine of
$8 thousand and to revise its supervisory procedures.  In addition, Federal and state
regulatory authorities from time to time make inquiries and conduct examinations
regarding compliance by Phoenix Life and its subsidiaries with securities and
other laws and regulations affecting their registered products. We endeavor to
respond to such inquiries in an appropriate way and to take corrective action if
warranted. There has been a significant increase in federal and state regulatory
activity relating to financial services companies, with a number of recent
regulatory inquiries focusing on late-trading, market timing and valuation
issues. Our products entitle us to impose restrictions on transfers between
separate account sub-accounts associated with our variable products.  In 2004 and 2005, the Boston District
Office of the SEC conducted a compliance examination of certain of PNXs
affiliates that are registered under the Investment Company Act of 1940 or the
Investment Advisers Act of 1940. Following the examination, the staff of the
Boston District Office issued a deficiency letter primarily focused on perceived
weaknesses in procedures for monitoring trading to prevent market timing
activity. The staff requested PNX to conduct an analysis as to whether
shareholders, policyholders and contract holders who invested in the funds that
may have been affected by undetected market timing activity had suffered harm
and to advise the staff whether PNX believes reimbursement is necessary or
appropriate under the circumstances. A third party was retained to assist PNX in
preparing the analysis. Based on this analysis, PNX advised the SEC that it does
not believe that reimbursement is appropriate.  Over the past several years, a number
of companies have announced settlements of enforcement actions with various
regulatory agencies, primarily the SEC and the New York Attorney Generals
Office. While no such action has been initiated against us, it is possible that
one or more regulatory agencies may pursue this type of action against us in the
future.  Financial services companies have also
been the subject of broad industry inquiries by state regulators and attorneys
general which do not appear to be company-specific. In this regard, in 2004, PNX
received a subpoena from the Connecticut Attorney Generals office
requesting information regarding certain distribution practices since 1998. Over
40 companies received such a subpoena. PNX cooperated fully and has had no
further inquiry since filing its response.  These types of regulatory actions may
be difficult to assess or quantify, may seek recovery of indeterminate amounts,
including punitive and treble damages, and the nature and magnitude of their
outcomes may remain unknown for substantial periods of time. While it is not
feasible to predict or determine the ultimate outcome of all pending inquiries,
investigations, legal proceedings and other regulatory actions, or to provide
reasonable ranges of potential losses, we believe that their outcomes are not
likely, either individually or in the aggregate, to have a material adverse
effect on our consolidated financial condition. However, given the large or
indeterminate amounts sought in certain of these actions and the inherent
unpredictability of regulatory matters, it is possible that an adverse outcome
in certain matters could, from time to time, have a material adverse effect on
our results of operation or cash flows in particular quarterly or annual
periods.   14    ITEM 2. MANAGEMENTS
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS  FORWARD-LOOKING
STATEMENTS  The discussion in this
Form 10-Q may contain forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. We intend for these
forward-looking statements to be covered by the safe harbor provisions of the
federal securities laws relating to forward-looking statements. These include
statements relating to trends in, or representing managements beliefs
about our future strategies, operations and financial results, as well as other
statements including, but not limited to, words such as anticipate,
believe, plan, estimate, expect,
intend, may, should and other similar
expressions. Forward-looking statements are made based upon managements
current expectations and beliefs concerning trends and future developments and
their potential effects on us. They are not guarantees of future performance.
Actual results may differ materially from those suggested by forward-looking statements as a result of
risks and uncertainties which include, among others: (i) movements in the
equity markets and interest rates that affect our investment results, the fees
we earn from our assets under management and the demand for our variable
products; (ii) the possibility that mortality rates or persistency may
differ significantly from our pricing expectations; (iii) the availability,
pricing and adequacy of reinsurance coverage generally and the inability or
unwillingness of our reinsurers to meet their obligations to us specifically;
(iv) our dependence on non-affiliated distributors for our product sales;
(v) downgrades in our financial strength ratings; (vi) our dependence
on third parties to maintain critical business and administrative functions;
(vii) our ability to attract and retain key personnel in a competitive
environment; (viii) heightened competition, including with respect to
pricing, entry
of new competitors and the development of new products and services by new and
existing competitors; (ix) legislative, regulatory, accounting or tax
developments that may affect us directly, or indirectly through the cost of, or
demand for, our products or services; (x) legal or regulatory actions; and
(xi) other risks and uncertainties described herein or in any of our
filings with the SEC. We undertake no obligation to update or revise publicly
any forward-looking statement, whether as a result of new information, future
events or otherwise.   MANAGEMENTS
NARRATIVE ANALYSIS OF THE RESULTS OF OPERATIONS  This section reviews our results of
operations for the three months ended March 31, 2007 and 2006. This
discussion should be read in conjunction with the unaudited interim condensed
financial statements and notes contained in this filing as well as in
conjunction with our financial statements for the year ended December 31,
2006 in our 2006 Annual Report on Form 10-K.  Overview  For an overview of our current business
and an explanation of the key drivers of our revenues, expenses and overall
profitability, please see the Overview discussion in Item 7,
Managements Discussion and Analysis of Financial Condition and Results of
Operations, in our 2006 Annual Report on Form 10-K.  Impact of New Accounting Standards  For a discussion of accounting
standards, see Note 2 to our financial statements in
this Form 10-Q.  Critical Accounting Estimates  The analysis of our results of
operations is based upon our financial statements, which have been prepared in
accordance with GAAP. GAAP requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates. Critical
accounting estimates are reflective of significant judgments, often as a result
of the need to make estimates about the effect of matters that are inherently
uncertain.  See our 2006 Annual Report on Form 10-K
for a description of our critical accounting estimates.  15    Results of
Operations  Summary Financial Data:Three Months Ended($ in thousands)
March 31,2007
2006
ChangeREVENUES:Premiums$3,179
$2,475
$704Insurance and investment product fees
54,301

41,995

12,306Investment income, net of expenses
27,894

35,060

(7,166)Net realized investment losses
(170)

(4,083)

3,913Total revenues
85,204

75,447

9,757BENEFITS AND EXPENSES:Policy benefits
35,676

43,848

(8,172)Policy acquisition cost amortization
25,263

13,057

12,206Other operating expenses
17,086

19,512

(2,426)Total benefits and expenses
78,025

76,417

1,608Income (loss) before income taxes
7,179

(970)

8,149Applicable income tax (expense) benefit
(2,340)

228

(2,568)Net income (loss)$4,839
$(742)
$5,581  Three months ended March 31,
2007 vs. March 31, 2006  Net income increased $5,581 thousand in
the first quarter of 2007 over to the prior year period primarily as a result of
higher revenues resulting from an increase in insurance and investment product
fees.  Premiums increased 28% in the first
quarter of 2007 over the prior year period due to the growing block of term
insurance business.  Insurance and investment product fees
increased 29% over the prior year period due principally to higher cost of
insurance charges for universal life, reflecting a growth of in force business
due to higher sales over the last several years.  Investment income, net of expenses,
decreased 20% over the prior year period due to lower invested asset balances,
which resulted from the scheduled maturity of an annuity contract.  Net realized investment losses improved
96% in the first quarter of 2007 over the prior period. During 2006, for asset
liability matching purposes, we were selling off securities in the portfolio
backing certain discontinued annuity products. In 2007 that effort has been
substantially completed, resulting in fewer realized losses.  Policy benefits decreased 19% in the
first quarter from the prior year period due principally to lower interest
credited, resulting from lower guaranteed interest funds on deposit for certain
discontinued annuity products.  Policy acquisition cost amortization
increased 93% over the prior year period due to higher insurance margins used
for the amortization of deferred policy acquisition costs, resulting from higher
sales over the last several years.  Other operating expenses decreased 12%
for the first quarter of 2007 from the prior year period. This decrease was due
to lower universal life premiums in the current quarter, which reduced premium
taxes, and non-deferred commissions. Annuity commissions also decreased due to
lower fund balances for certain products. These decreases were partially offset
by higher non-deferred expenses, resulting from the growing block of life
business which increased maintenance and other expenses.  General Account  The invested assets in our general
account are generally of high quality and broadly diversified across fixed
income sectors, public and private income securities and individual credits and
issuers. Our investment professionals manage these general account assets in
investment segments that support specific product liabilities. These investment
segments have distinct investment policies that are structured to support the
financial characteristics of the related liabilities within them. Segmentation
of assets allows us to manage the risks and measure returns on capital for our
various products.  16     Separate Accounts  Separate account assets are managed in
accordance with the specific investment contracts and guidelines relating to our
variable products. We generally do not bear any investment risk on assets held
in separate accounts. Rather, we receive investment management fees based on
assets under management. Assets held in separate accounts are not available to
satisfy general account obligations.  Debt and Equity Securities Held in
Our General Account  Our general account debt securities
portfolios consist primarily of investment-grade publicly traded and privately
placed corporate bonds, residential mortgage-backed securities, commercial
mortgage-backed securities and asset-backed securities. As of March 31,
2007, our general account held debt securities with a carrying value of $1,926.4
million, representing 99.0% of total general account investments. Public debt
securities represented 80.2% of total debt securities, with the remaining 19.8%
represented by private debt securities.  Debt Securities by Type and Credit Quality:
As of March 31, 2007($ in thousands)
Investment Grade
Below Investment GradeFair Value
Cost
Fair Value
CostUnited States government and agency$79,407
$79,625
$
$State and political subdivision
15,939

16,221



Foreign government
16,260

15,939

21,160

18,771Corporate
956,461

964,237

128,782

131,242Mortgage-backed
425,409

427,356



Other asset-backed
273,841

271,453

9,191

9,140Total debt securities$1,767,317
$1,774,831
$159,133
$159,153Percentage of total debt securities
91.74%

91.77%

8.26%

8.23%  We manage credit risk through industry
and issuer diversification. Maximum exposure to an issuer is defined by quality
ratings, with higher quality issuers having larger exposure limits. Our
investment approach emphasizes a high level of industry diversification. The top
five industry holdings as of March 31, 2007 in our debt securities
portfolio are diversified financial services (6.8%), banking (5.9%), insurance
(3.1%), real estate investment trusts (2.6%) and electric utilities (2.5%).  Total net unrealized losses on debt
securities were $7,534 thousand (unrealized losses of $24,837 thousand less
unrealized gains of $17,303 thousand).   17    The following
table presents certain information with respect to our gross unrealized losses
related to our investments in general account debt securities. Applicable
deferred acquisition costs and deferred income taxes reduce the effect of these
losses on our comprehensive income.  Duration of Gross Unrealized Losses
As of March 31, 2007on General Account Securities:
0 - 6
6  12
Over 12($ in thousands)
Total
Months
Months
MonthsDebt securitiesTotal fair value$1,226,586
$145,276
$46,620
$1,034,690Total amortized cost
1,251,423

146,495

47,123

1,057,805Unrealized losses$(24,837)
$(1,219)
$(503)
$(23,115)Unrealized losses after offsets$(4,045)
$(180)
$(76)
$(3,789)Unrealized losses over 20% of cost$
$
$
$Unrealized losses over 20% of cost after offsets$
$
$
$Investment grade:Unrealized losses$(21,536)
$(1,181)
$(421)
$(19,934)Unrealized losses after offsets$(3,486)
$(174)
$(64)
$(3,248)Unrealized losses over 20% of cost$
$
$
$Unrealized losses over 20% of cost after offsets$
$
$
$Below investment grade:Unrealized losses$(3,301)
$(38)
$(82)
$(3,181)Unrealized losses after offsets$(559)
$(6)
$(12)
$(541)Unrealized losses over 20% of cost$
$
$
$Unrealized losses over 20% of cost after offsets$
$
$
$  For debt securities with gross
unrealized losses, 86.2% of the unrealized losses after offsets pertain to
investment grade securities and 13.8% of the unrealized losses after offsets
pertain to below investment grade securities at March 31, 2007.  In determining that the securities
giving rise to unrealized losses were not other-than-temporarily impaired, we
considered many factors, including those cited previously. In making these
evaluations, we must exercise considerable judgment. Accordingly, there can be
no assurance that actual results will not differ from our judgments and that
such differences may require the future recognition of other-than-temporary
impairment charges that could have a material effect on our financial position
and results of operations. In addition, the value of, and the realization of any
loss on, a debt security or equity security is subject to numerous risks,
including interest rate risk, market risk, credit risk and liquidity risk. The
magnitude of any loss incurred by us may be affected by the relative
concentration of our investments in any one issuer or industry. We have
established specific policies limiting the concentration of our investments in
any single issuer and industry and believe our investment portfolio is prudently diversified.  Liquidity and Capital Resources  In the normal course of business, we
enter into transactions involving various types of financial instruments such as
debt and equity securities. These instruments have credit risk and also may be
subject to risk of loss due to interest rate and market fluctuations.  Our liquidity requirements principally
relate to the liabilities associated with various life insurance and annuity
products and operating expenses. Liabilities arising from life insurance and
annuity products include the payment of benefits, as well as cash payments in
connection with policy surrenders, withdrawals and loans.  18    Historically,
we have used cash flow from operations and investment activities to fund
liquidity requirements. Our principal cash inflows from life insurance and
annuities activities come from premiums, annuity deposits and charges on
insurance policies and annuity contracts. Principal cash inflows from investment
activities result from repayments of principal, proceeds from maturities, sales
of invested assets and investment income.  Ratings  Rating agencies assign financial
strength ratings to Phoenix Life and its subsidiaries based on their opinions of
the Companies ability to meet their financial obligations. Ratings changes
may result in increased or decreased interest costs in connection with future
borrowings. Such an increase or decrease would affect our earnings and could
affect our ability to finance our future growth. Downgrades may also trigger
defaults or repurchase obligations. The financial strength ratings as of
March 31, 2007 were as follows:  Financial Strength Ratings ofRating Agency
Phoenix Life and PHL Variable LifeA.M. Best Company, Inc.
A
(Excellent)Fitch
A+ (Strong)Standard & Poors
A- (Strong)Moodys
A3 (Good)  On March 15, 2007, Standard &
Poors lowered its financial strength ratings on The Phoenix Companies,
Inc.s life insurance subsidiaries, including Phoenix Life and the Company,
to A- from A, while assigning a stable outlook to all of these companies.  These ratings are not a recommendation
to buy or hold any of our securities.  See our 2006 Annual Report on Form 10-K
for additional information as to liquidity and capital resources.  Contractual Obligations and
Commercial Commitments  As of March 31, 2007, there were
no significant changes to our outstanding contractual obligations and commercial
commitments as disclosed in our 2006 Annual Report on Form 10-K.  Off-Balance Sheet Arrangements  As of March 31, 2007 and December
31, 2006, we did not have any significant off-balance sheet arrangements as
defined by Item 303(a)(4)(ii) of SEC Regulation S-K.  Reinsurance  We maintain life reinsurance programs
designed to protect against large or unusual losses in our life insurance
business. Based on our review of their financial statements, reputations in the
reinsurance marketplace and other relevant information, we believe that we have
no material exposure to uncollectible life reinsurance.  Risk Based Capital  At March 31, 2007, our estimated
Total Adjusted Capital level was in excess of 400% of Company Action Level.  Statutory Capital and Surplus  Our statutory basis capital and surplus
(including AVR) was $213.5 million at March 31, 2007.  19    ITEM 3.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK  We have omitted this information from
this report as we meet the conditions set forth in General Instruction
H(1)(a) and (b) of Form 10-Q and are therefore filing this Form with the reduced
disclosure format permitted by that General Instruction.   ITEM 4. CONTROLS AND PROCEDURES  Evaluation of Disclosure Controls
and Procedures  We have carried out an evaluation under
the supervision and with the participation of our management, including our
Principal Executive Officer and our Principal Financial Officer, of the
effectiveness of the design and operation of our disclosure controls and
procedures. There are inherent limitations to the effectiveness of any system of
disclosure controls and procedures, including the possibility of human error and
the circumvention or overriding of the controls and procedures. Accordingly,
even effective disclosure controls and procedures can only provide reasonable
assurance of achieving their control objectives. Based upon our evaluation,
these officers have concluded that, as of March 31, 2007, the disclosure
controls and procedures were effective to provide reasonable assurance that
information required to be disclosed in the reports we file and submit under the
Securities and Exchange Act of 1934 is recorded, processed, summarized and
reported, within the time periods specified in the SECs rules and forms.  Changes in Internal Control over
Financial Reporting  During the three months ended on
March 31, 2007, there were no changes in our internal control over
financial reporting that have materially affected, or are reasonably likely to
materially affect, our internal control over financial reporting.  20    PART II. OTHER INFORMATION   ITEM 1. LEGAL PROCEEDINGS  We are regularly involved in litigation
and arbitration, both as a defendant and as a plaintiff. In addition, various
regulatory bodies regularly make inquiries of us and, from time to time, conduct
examinations or investigations concerning our compliance with, among other
things, insurance laws, securities laws, laws governing the activities of
broker-dealers and other laws and regulations affecting our registered products.
It is not feasible to predict or determine the ultimate outcome of all legal or
regulatory proceedings or to provide reasonable ranges of potential losses. We
believe that the outcomes of our litigation and regulatory matters are not
likely, either individually or in the aggregate, to have a material adverse
effect on our consolidated financial condition. However, given the large or
indeterminate amounts sought in certain of these matters and the inherent
unpredictability of litigation and regulatory matters, it is possible that an
adverse outcome
 in certain matters could, from time to time, have a material adverse effect on
our results of operations or cash flows in particular quarterly or annual
periods. See Item 1A, Risk Factors and Note 7 to our financial
statements in this Form 10-K for additional information.   ITEM 1A. RISK FACTORS  During the three months ended
March 31, 2007, there were no material changes to our Risk Factors as
described in our 2006 Annual Report on Form 10-K.   ITEM 2. UNREGISTERED SALES OF EQUITY
SECURITIES AND USE OF PROCEEDS  We have omitted this information from
this report as we meet the conditions set forth in General Instruction
H(1)(a) and (b) of Form 10-Q and are therefore filing this Form with the reduced
disclosure format permitted by that General Instruction.   ITEM 3. DEFAULTS UPON SENIOR
SECURITIES  We have omitted this information from
this report as we meet the conditions set forth in General Instruction
H(1)(a) and (b) of Form 10-Q and are therefore filing this Form with the reduced
disclosure format permitted by that General Instruction.   ITEM 4. SUBMISSION OF MATTERS TO A
VOTE OF SECURITY HOLDERS  We have omitted this information from
this report as we meet the conditions set forth in General Instruction
H(1)(a) and (b) of Form 10-Q and are therefore filing this Form with the reduced
disclosure format permitted by that General Instruction.   ITEM 5. OTHER INFORMATION  (a)
None.(b)
No material
changes.  21    ITEM 6.
EXHIBITS  Exhibit3.1
Form of Amended and Restated Certificate of Incorporation (as amended and
restated effective
May 31, 1994) (incorporated herein by reference to Exhibit 3.1
to the PHL Variable Insurance Companys Annual Report on Form 10-K filed
March 31, 2006)3.2
Bylaws of PHL Variable Life Insurance Company (as amended and restated effective
May 16, 2002) (incorporated herein by reference to Exhibit 3.2 to the PHL
Variable Insurance Companys Annual Report on Form 10-K filed March 31,
2006)10.1
Services Agreement effective as of January 1, 1995 by and among PHL Variable
Insurance Company, Phoenix Life Insurance Company, American Life and Reassurance
Company, Phoenix American Life Insurance Company and Phoenix Home Life Mutual
Insurance Company (incorporated herein by reference to Exhibit 10.1 to the PHL
Variable Insurance Companys Annual Report on Form 10-K filed March 31,
2006)10.2
Investment Management Agreement effective as of January 1, 1995 by and between
PHL Variable Insurance Company and Phoenix Investment Counsel, Inc.
(incorporated herein by reference to Exhibit 10.2 to the PHL Variable Insurance
Companys Annual Report on Form 10-K filed March 31, 2006)10.3
Amendment #1 (effective as of January 1, 1998) to the Investment Management
Agreement dated as of January 1, 1995 by and between PHL Variable Insurance
Company and Phoenix Investment Counsel, Inc. (incorporated herein by reference
to Exhibit 10.3 to the PHL Variable Insurance Companys Annual Report on
Form 10-K filed March 31, 2006)10.4
Amended and Restated Tax Allocation Agreement dated as of January 1, 2001 by and
among The Phoenix Companies, Inc. and most of its subsidiaries (incorporated
herein by reference to Exhibit 10.4 to the PHL Variable Insurance Companys
Annual Report on Form 10-K filed March 31, 2006)10.5
Amendment #1 (effective as of January 1, 2006) to the Amended and Restated Tax
Allocation Agreement dated as of January 1, 2001 by and among The Phoenix
Companies, Inc. and most of its subsidiaries (incorporated herein by reference
to Exhibit 10.5 to the PHL Variable Insurance Companys Annual Report on
Form 10-K filed March 31, 2006)31.1
Certification of Philip K. Polkinghorn, Chief Executive Officer, pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002*31.2
Certification of Michael E. Haylon, Chief Financial Officer, pursuant to Section
302 of the Sarbanes-Oxley Act of 2002*32
Certification by Philip K. Polkinghorn, Chief Executive Officer and Michael E.
Haylon, Chief Financial Officer, pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002*  *
Filed
herewith  We will furnish any exhibit upon the
payment of a reasonable fee, which fee shall be limited to our reasonable
expenses in furnishing such exhibit. Requests for copies should be directed
to: Corporate Secretary, PHL Variable Insurance Company, One American Row, P.O.
Box 5056, Hartford, Connecticut 06102-5056.  22    Signature  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.   PHL VARIABLE INSURANCE COMPANYDate:May 15, 2007By:/s/ Michael E. HaylonMichael E. Haylon,
Executive Vice Presidentand Chief
Financial Officer    23